Document text
Esquivel suggests sales tax Sal Esquivel Monday Jan 30, 2017 at 4:48 PM Jan 30, 2017 at 5:06 PM Damian Mann Mail Tribune @reporterdm Oregonians typically recoil at any mention of a state sales tax, but Republican Rep. Sal Esquivel is floating the idea in exchange for getting rid of property taxes for most residents. "I was originally trying to figure out a way people wouldn't pay property taxes when they retire," Esquivel said. Esquivel, who generally opposes new taxes, said his original idea grew into a proposal to ask voters to support a 4.5 percent sales tax in lieu of paying property taxes on primary residences assessed at $500,000 or less. The Medford resident knows a sales tax historically has been anathema to most Oregonians, but he thinks many voters might find the idea more appealing if they don't have a $3,000 or so property tax bill every year. "I think most people will like it," he said. The property tax proposal, which will be discussed by the Legislature, wouldn't apply to local option property taxes or bond levies that are approved by voters that pay for new schools and expenses. Based on estimates he provided, a family of four with an annual income of $50,000 and a house valued at $200,000 would spend $1,258 less a year in taxes overall under his proposal. The sales tax would not apply to food, clothing, medicines, medical equipment or utilities. In the first biennium of the sales tax, Esquivel estimates, the state would receive more than $1 billion in extra revenue and additional revenue in subsequent budget cycles. He said he wants to set aside a certain amount of the sales tax to beef up the Oregon State Police. Esquivel's proposed legislation would require voter approval to change the state Constitution, something voters have rejected in the past. The proposal would be on the Nov. 6 ballot if the Legislature agrees. Esquivel wants to lock the sales tax into the Constitution so the Legislature couldn't attempt to increase the tax in future years. Local jurisdictions wouldn't be allowed to enact their own sales taxes on top of the 4.5 percent. With the sales tax part of the Constitution, Esquivel said, "The Legislature cannot override the people." Rep. Pam Marsh, D-Ashland, said she applauded Esquivel for suggesting an alternative tax system at a time when the state is looking for other sources of revenue to prevent cuts in education, health care and other services. "There are going to be a lot of revenue proposals out there," said Marsh, who is on the House Revenue Committee. Marsh said she hasn't had a chance to review Esquivel's proposal, but she noted sales tax proposals have been shot down nine times by Oregon voters. She said she'd need to better understand the implications of relying on sales taxes as a funding source. Property taxes, Marsh said, tend to be a stable, reliable source of revenue over the long term. Sales tax revenues could fluctuate depending on the economy. Property taxes generally go up 3 percent each year. "People hate property taxes," Marsh said. — Reach reporter Damian Mann at 541-776-4476 or [email protected]. Follow him on www.twitter.com/reporterdm.