Most Oregonians believe large businesses should pay more in state taxes, but they also believe that the state should close its $1.6 billion budget gap mainly with spending cuts.

These were among the results of a statewide poll released Monday from nonpartisan firm DHM Research. The poll, commissioned by the Oregon School Boards Association, summarizes results from a telephone survey of 600 registered Oregon voters conducted in late February. The poll's margin of error is 4 percent.

The study comes a month and a half into the Legislative session and more than three months after Gov. Kate Brown announced how she would balance the state's next budget.

Thus far, lawmakers have shied away from serious discussions on spending cuts or new taxes. Instead, they are waiting as union and business leaders - the two groups that waged war on one another during the failed Measure 97 corporate tax hike campaign - try to work out a solution in private.

Jim Green, executive director of the Oregon School Boards Association, speaks at the state capitol on Monday, Mar. 13, 2017.

"They need to begin these discussions now rather than later," said Jim Green, the school board group's executive director, at the Capitol on Monday. "We're in the middle of March. School districts are building their budgets. If we don't have an adequate number to fund the state school fund, then we'll be sending out pink slips, we'll be cutting programs, we'll be increasing our class sizes."

Ryan Deckert, president of the Oregon Business Association, said the survey shows that Oregonians, like his group, support "a balanced approach" to solving the state's budget shortfall.

"We're really looking toward the elected officials to lead the strategy," he said. "First you get your hands around the spending, and that opens the door for revenue talks."

Deckert said he's confident lawmakers are "leaning into the conversation."

Sen. Mark Hass, D-Beaverton, chairs the Senate Revenue Committee. He said he's working with fellow legislators from both sides of the aisle and both chambers to craft a business tax reform proposal, which he expects will be ready to introduce in about three weeks.

But revenue is only part of the equation, he said. Other work groups are crafting proposals to address spending on public pensions and health care, he said.

The DHM survey shows that 62 percent of respondents agree that Oregon has a spending problem. Overall, 54 percent said the state should close its budget either entirely with spending cuts or mostly by cuts with some tax hikes.

More respondents, 64 percent, said the budget should include some tax increases, even if those hikes aren't the primary means to balance the budget. Democrats were more likely to favor tax increases, while Republicans preferred cuts.

The study found that on average, Oregonians think businesses should contribute 40 percent of the taxes collected by the state.

When asked what they thought businesses contribute now, on average, respondents said they contribute 36 percent. In fact, taxes on businesses make up about 30 percent of the state's tax income, according to an estimate from a study of state taxes from the Council on State Taxation (COST), the State Tax Research Institute and Ernst & Young.

But when property taxes and other local taxes are also taken into account, Oregon businesses shoulder about 37 percent of the tax burden. That compares to 44 percent nationally.

The DHM poll found Republicans, on average, believe businesses pay 40 percent of state taxes and believe they should be responsible for 34 percent. Democrats, on average, think businesses pay 30 percent of state taxes - which is correct - and think they should pay 41 percent.

While 43 percent of respondents believe small businesses pay too much in taxes, 56 percent believe large businesses pay too little.

When presented with a list of state services, the largest chunk of those surveyed, 39 percent, said funding K-12 education was a top priority, followed by public safety at 16 percent, health care at 14 percent, affordable housing at 9 percent and social services at 8 percent.

About two-thirds of poll respondents initially said they would support a requirement that the state fully fund schools. But upon learning that the Oregon School Boards Association says this would cost the state $2 billion per biennium, the support dropped to 56 percent.

While only 51 percent of respondents said they would support a personal income tax increase to prevent teacher layoffs and larger class sizes, 73 percent said they would support higher corporate taxes to prevent these cuts. In addition, 61 percent support eliminating the "kicker" income tax rebate if those funds were routed to a rainy day fund for K-12 education.

A solid majority of those surveyed, 63 percent, support a progressive tax structure over one that taxes all incomes at the same rate. And two-thirds of voters said they prefer a state income tax to a sales tax, though Republicans were more likely to favor a sales tax.

Nearly two-thirds of voters, 65 percent, said they would support a tax increase similar to the one called for in Measure 97, if the revenue were guaranteed to fund K-12 schools. But nearly the same number said they preferred a corporate income tax to a gross receipts tax, which was the form of corporate taxation proposed under Measure 97.

The takeaway from the study, Green said, is that voters are more likely to pass a corporate tax measure that targets large corporations, as long as the revenue is earmarked for K-12 education.

"Six billion dollars with unfettered control to the Legislature was a bridge too far for voters to go," he said. "But if you could get into the two- to three-billion dollar range dedicated to education, that moves us along significantly."

amarum@oregonian.com

503-294-5911

@annamarum

Save

Save

Save