Oregon grocers want to extend their winning streak.
They spent more than $7 million in 2016 to beat back Measure 97, which sought to raise $3 billion a year with a new tax on companies’ Oregon sales.
Measure 97 was trounced at the ballot box, and now the supermarkets are going on the offensive with their own initiative: Measure 103, as it will soon be known, is a constitutional amendment that would ban any new tax on groceries.
“There’s no doubt this is somewhat the result of Measure 97,” said Dan Floyd, formerly Safeway’s government relations representative, now the grocer’s spokesman for Measure 103. “These are expensive campaigns for the grocery industry, and we want to make this permanent.”
Measure 103’s backers have raised more than $2 million to put it on the ballot and campaign for it. With a little more than three months ’til Election Day, opponents have yet to raise a dime or assemble a coalition to fight the industry.
Measure 103 would have a relatively muted effect: in the wake of Measure 97’s landslide defeat, in which a prospective tax on grocers was a major campaign issue, even advocates for more government revenue concede any tax on food would be a non-starter in Oregon.
And it could be that prospective opponents have more pressing fights; November’s ballot will also include measures on immigration, abortion and legislative taxation, along with a highly competitive gubernatorial race.
Still, critics of Measure 103 say it’s a bad idea to inscribe broad prohibitions against taxation in the Oregon constitution. They warn that the initiative has consequences voters might not anticipate and promise an organized opposition will emerge by summer’s end.
“I expect this coalition to be robust and unique, including labor, the American Heart Association, Oregon businesses, and policy and family advocacy organizations,” said Daniel Hauser of the Oregon Center for Public Policy, which promotes education and health-care spending and fights economic inequality.
“This coalition is growing by the day and still taking shape,” Hauser said. “So stay tuned.”
Supporters trumpet Measure 103 as a common-sense prohibition on taxing groceries. There is broad agreement among economists and politicians that taxing food makes no sense.
Opponents, though, point out that the initiative would do more than that. It would, for example, prohibit taxing soda.
Several jurisdictions around the country, among them Seattle and San Francisco, have adopted soda taxes in hopes of curbing the health impacts of the sugary drinks. Advocates considered a similar tax in Multnomah County but shelved their plans indefinitely last fall.
Measure 103 also would bar new taxes on restaurants, according to the Oregon Department of Justice analysis, and opponents say it may also apply to the transportation of food and food served in hotels and hospitals.
The initiative’s backers say they didn’t intend any of that, but opponents say it highlights the perils of making constitutional changes through a ballot measure written by industry.
“We shouldn’t do so at the behest of mostly out-of-state corporations in a way that’s uncertain and potentially very risky,” Hauser said. At the very least, he said, it’s sure to trigger litigation as businesses and the state sort out the initiative’s implications.
Measure 103 would also exempt grocers from any future increase in Oregon’s corporate minimum tax. It would put supermarkets in a separate category from other businesses in the state.
That change probably wouldn’t make a big difference in practice, though, because profitable grocers would rarely pay the corporate minimum. Instead, they would pay Oregon’s regular, corporate income tax, which is usually much higher.
“If you’re paying under the (income tax) rate, the minimum doesn’t matter unless you’re talking about a hypothetical world where the minimum is dramatically increased,” said Chris Allanach, chief economist in the Legislative Revenue Office.
With concurrent ballot fights over Oregon’s sanctuary state law, abortion rights, and an initiative that would require a three-fifths supermajority for the Legislature to raise fees or reduce tax breaks, Measure 103 won’t get the attention Measure 97 did two years ago. But supporters and opponents agree it will draw attention as the election approaches.
“I am a little surprised that we haven’t seen a well-funded opposition at this point, but I would be surprised if it remains this quiet,” said Floyd, the spokesman for the industry’s campaign. “We’re prepared for a strong opposition.”
Correction: The amount raised in support of Measure 103 has been corrected.
