Oregon Public Broadcasting

It’s shaping up to be a week when taxes take center state in Salem.  Votes are scheduled later this week on whether to increase taxes on corporations and upper-income households. 

Monday, the House approved a new tax on hospitals and health insurance premiums.  Joining us to discuss these votes is our Salem correspondent, Chris Lehman.

Q:  What are these health care taxes and what would they do?

A:  It’s a two-part tax.  The first part puts a one percent tax on health insurance premiums.  That’s expected to raise enough money to provide health care for 80,000 Oregon children.  The second part is a tax on hospitals, or specifically, the state’s 26 largest hospitals. Supporters say the tax will allow the state to leverage more federal Medicaid dollars which would in turn allow the state to put an additional 35,000 low-income adults on the Oregon Health Plan.

Democrats like House Majority leader Mary Nolan would make Oregon a leader in health care.

Mary Nolan:  “Access to affordable health care through this bill will mean that children go to school ready to learn, and not crippled by earaches or more significant health problems.  And it means that adults will be more productive on their jobs and as members of society.”

Q:  So the Democrats were trying to put a very positive spin onto a tax increase.  What did Republicans have to say?

A:  GOP lawmakers called it a predatory tax increase.  They said the bill would have the opposite effect than intended. 

Republicans said that small to mid-size businesses that often pay health insurance premiums will either no longer offer that benefit or be forced to lay off employees.  The GOP also objected to a companion bill that Democrats say would reign in health care costs by consolidating state oversight of health care. 

Republican Representative Scott Bruun said it puts too much power in the hands of government.

Scott Bruun:  “Once the genie is out of the bottle, we will never get it back in.  Any hope of market-based health care reform will be gone.”

In the end, the health care tax passed the House on a party-line vote, and now heads over to the Senate where Democrats also hold a wide majority.

Q:  This isn’t the only tax increase to be considered by lawmakers in Salem this week, right?

A:  That’s right, Beth. The House is scheduled to vote tomorrow on a pair of tax increases.  One would hike taxes on corporations, and the other would raise the personal income tax on households making more than $250,000 a year.

Unlike the health care tax, the money raised from these proposals would go into the state’s general fund, as part of a plan to plug a roughly $4 billion budget gap.

Q:  So do Democrats have the votes to pass these two tax increases?

A:  Well generally speaking, legislative leadership won’t schedule a floor vote unless they think it will pass.  But during the last legislative session Democrats brought a cigarette tax to the floor multiple times only to see it fail each time.

Democrats hold a wider majority this year so it’s more likely they’ll be able to move these tax measures forward.