Even the most hardened of Oregonians could find themselves falling for the tantalizing story put forth by the proponents of Measure 97. This new corporate tax proposal, they say, will boost the state's fortunes, protect the vulnerable, lift schools out of mediocrity and even deliver a blow for economic justice. All Oregonians need to do, the campaign advises, is vote yes.

Could there really be such a simple solution to the staggering bills coming the state's way? Public employers face an $885 million hike in pension contributions next year, while the state must find another $1.2 billion for health care in the next biennium. Meanwhile, the never-ending quest for more education funding persists.

That's the problem with desperation. It makes you want to believe in something you know can't possibly be true. As magical as Measure 97 may seem, Oregon voters should recognize its real-world flaws and harmful impacts. Not only does the campaign overpromise on what it can deliver; Oregonians would also bear much of the tax burden through hidden price increases -- with low-income families disproportionately hit, as the nonpartisan Legislative Revenue Office concluded. Worse, the measure doesn't address the mismatch between Oregon's inadequate revenue and undisciplined spending at the root of the state's financial woes.

Oregonians should vote no on Measure 97 and make clear to elected leaders that they can no longer ignore their responsibility to craft a solution that considers both sides of the problem.

Measure 97 was developed by Our Oregon, the political arm for public employee unions. It seeks to levy a 2.5 percent gross-receipts tax on C corporations that ring up more than $25 million in Oregon sales. (The parent company of The Oregonian/OregonLive would be affected by Measure 97.) The measure wouldn't include comparable S corporations, partnerships or so-called "benefit companies" identified as having a positive impact on the community and environment.

The measure calls for all proceeds to be added to current spending on K-12 education, health care and senior services. But that's not likely to happen. As even the measure's proponents admit, the Legislature may spend the revenue -- an estimated $3 billion annually -- anywhere it likes.

Sen. Richard Devlin, D-Tualatin, the senate's budget writer told The Portland Tribune that rising pension and Affordable Care Act costs will quickly claim any new revenue.

"The money is gone from that measure, so you should quit thinking about all these other programs you would like to expand," Devlin said.

But the problems go far beyond the misleading portrait of a funding utopia.

The tax would be assessed on sales, not profits, for one thing. That means high-sale, low-margin businesses like Umpqua Dairy could find itself paying big tax bills even as it bleeds red ink.

Measure supporters also boast it makes corporations "pay their fair share." In reality, it only targets certain corporations, leaving others of similar size and industry out of the equation. So mass grocer Fred Meyer would face a much larger tax bill, while its upscale competitor New Seasons Market would not.

Then there are the less obvious economic factors to consider.

The state estimates that the tax will lead to higher prices for Oregonians, dampen private sector employment growth and increase the tax burden by $600 per person, based on 2012-2013 figures. While competition may help keep some price increases down, utilities, for example, are permitted to seek rate increases to cover higher costs.

At 2.5 percent, the tax is also much larger than the general rates levied in the five other states with a gross-receipts tax. Rates in Delaware, Nevada, Ohio and Texas fall well below 1 percent. Washington state's rates fall between 0.14 percent to 1.5 percent.

Ben Unger, executive director of Our Oregon, argues that the tax's "elegant" design -- narrowly targeting the largest grossing companies with such a high percentage -- wipes out any negative effects to consumers. He argues there's no need for legislators to adjust the tax, even though the governor has already said revisions will be necessary.

Unger is not an economist. An economist hired by the campaign to assess the tax, however, concluded it's a "sales tax on steroids" because of its potential to be charged multiple times along the supply chain. And it stretches the bounds of credulity to believe that companies facing a massive new tax are simply going to accept the increased bill without changing Oregon operations, employment or prices.

Even if you can get past the Legislative Revenue Office's projections of higher prices for consumers and lowered outlook for private-sector jobs; even if you can forget the mess that initiative-driven tax policy has wrought to Oregon; even if you don't care about the inequity of a company that loses money having to pay taxes based on sales, consider this: This tax won't solve the fundamental problem driving Oregon to such desperate measures.

Oregonian editorials

reflect the collective opinion of The Oregonian/OregonLive editorial board, which operates independently of the newsroom.

are Laura Gunderson, John Maher, Helen Jung, Mark Katches and Len Reed.

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Yes, Oregon has a revenue problem. But it also has a spending problem it refuses to confront. Leaders have avoided even talking about curbing public-employee pension benefits to control the surging unfunded liability, now at $22 billion. The state is heading closer to a train wreck that leaders saw coming for miles.

Gov. Kate Brown could have convened business groups, public employee unions and legislators to hash out a compromise. She could have supported Democratic Sen. Mark Hass' efforts in February to legislate a solution. But she did nothing. Instead, she endorsed Measure 97 and parroted unions' calls that "it's time for corporations to pay their fair share."

For Brown to take up the campaign battle cry as if she were hoisting a sign at a protest misunderstands that her lack of leadership is what needs protesting. As the governor, Brown not only has the power but the obligation to address such problems.

It's called "public service" for a reason. It's not easy, and the challenges are daunting, but this is what governing is all about. And that is why Oregonians should vote no on Measure 97. Send this back to the governor and our legislators and demand that our elected leaders lead.

- The Oregonian/OregonLive Editorial Board

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