SALEM -- A coalition of Oregon's largest public employee unions and other advocacy groups unveiled a proposal on Tuesday to raise an additional $5 billion over two years from new and expanded taxes on corporations, health care providers and insurers.

A majority of the new revenue -- $4 billion -- would come from a 2 percent tax on all corporations' gross annual sales in Oregon above $100 million. The proposal is similar to Measure 97, a 2.5 percent tax on Oregon sales above $25 million that was pitched by many of the same groups. Voters roundly defeated the tax initiative in November.

Oregon faces a projected $1.7 billion shortfall in the next two-year budget, if lawmakers and the governor want to continue providing the same level of government services. The gap is largely due to the rising bill for the state's Medicaid expansion and higher personnel costs, including from public employee pensions.

"What we heard loud and clear is that voters do want a solution to our budget crisis, that we do believe that corporations in Oregon should be paying more," said Andrea Paluso, co-founder and executive director of Family Forward Oregon, at a press conference at the Capitol. Paluso added that tax increases "need to be game-changing and significant" and the proposal is just the start of a conversation.

In a report, the coalition said Oregon needs to pour an additional $6 billion every two years into education, health care, senior services, public safety, and programs for children and families. That's roughly the amount Measure 97 would have raised, according to estimates from Oregon's Legislative Revenue Office. It would have amounted to a 33 percent increase in the state budget.

Katherine Driessen, a spokeswoman for the union-backed group Our Oregon that campaigned for Measure 97, said many state lawmakers supported the initiative and are working on the new tax proposal.

But none has introduced a bill. Driessen, who also represents A Better Oregon, declined to identify the lawmakers. Missing from the press conference in Salem Tuesday was Ben Unger, executive director of Our Oregon and a chief sponsor of Measure 97.

Supporters of the new proposal said it accounts for criticisms of Measure 97, including concern that Measure 97 would have applied to utilities. The latest gross receipts tax proposal would exempt utilities, although it would still apply to grocery stores.

At least two of the coalition's key proposals were featured in Gov. Kate Brown's proposed budget, which was released on Dec. 1.

Approximately $1 billion of new revenue would come from the tax increases on health care providers and insurers that Brown sought. The coalition also wants to expand the state's Medicaid program so that every child in Oregon has insurance, another Brown proposal.

Chris Pair, a spokesman for the governor, said "there was no collaboration" between Brown's office and the coalition on either proposal.

Paluso rejected the idea that lawmakers should consider cost-saving reforms to the state's public pension system as part of a deal to raise tax revenue, an idea suggested by business leaders at a conference in Portland last week.

"The state has entered into a contract with public employees that they need to uphold," she said, "and we shouldn't be balancing the budget on the backs of those folks while we continue to allow corporations to not pay their fair share."

But it will be difficult for the coalition and Democrats to muscle tax increases through the Legislature without buy-in from businesses -- and impossible without help from Republicans. Though Democrats hold large majorities in Salem, they remain a few votes shy of the three-fifths supermajorities needed to raise taxes.

On Tuesday, House Republican spokesman Preston Mann poured cold water on the coalition's proposal.

"It says a lot about Democratic politicians and government employee unions that even in the face of an overwhelming defeat," Mann said in a statement, "they still have the audacity to stand before Oregonians and demand massive new tax increases with only vague details about how the money will be spent and a hardline stance against budget reform."

-- Hillary Borrud

503-294-4034; @hborrud