Last year, the Service Employees International Union (SEIU) spent over $5 million trying to get a ballot measure passed that would have imposed a huge tax hike on businesses in Oregon. Measure 97 would have increased taxes on businesses' gross sales - not their profits - by $3 billion each year.
According to the state's nonpartisan Legislative Revenue Office, the tax hike would have cost jobs and would have been regressive impacting less-affluent residents more heavily than the affluent. Because the corporate tax hike would have likely been passed on to customers in the form of higher costs for food, clothing, medicine, and utilities, among other things, the measure would have created a hidden sales tax. If approved, the measure would have increased state revenues by approximately 25 percent; this massive tax hike would have been the largest in the state's history.
Unsurprisingly, the measure was opposed by many businesses, both large and small, trade associations, chambers of commerce, and the Wall Street Journal. Some of the largest newspapers in the state also opposed it. One of these papers, the Corvallis Gazette-Times wrote, "We recommend a ‘no' vote on this poorly conceived measure, which will end up costing Oregon consumers."
Fortunately, Measure 97 was soundly defeated at the polls last November 59 percent to 41 percent; with 34 of the state's 36 counties opposing it.
Rather than accept that Oregonians just aren't interested in enacting a hidden sales tax, SEIU continued its efforts to hike corporate taxes. This time, SEIU tried to pressure the state Legislature to impose the tax hike.
After failing to reach a consensus on new transportation funding in 2015, Oregon legislators tried again this past legislative session. (Eventually, they passed legislation hiking taxes and fees; these tax and fee increases are expected to raise over $5 billion dollars over the next decade to fund transportation improvements, which will provide jobs for unionized construction workers.) SEIU claimed to support this legislation; but, late in the legislative session, SEIU threatened to submit the legislation to voters and try to get voters to overturn it - if legislators wouldn't cave and also impose SEIU's corporate tax.
Even Gov. Kate Brown, a Democrat who supported SEIU's tax-hiking ballot measure last year, disagreed with SEIU's ploy, saying she did not "support those tactics." She "opposed to this type of strategy" in this instance and described it as "cutting off your nose to spite your face." Brown's opposition to SEIU's tactics is all the more surprising given the fact that one SEIU local was her second largest contributor in last year's election.
Why was SEIU so bent on hiking corporate taxes, in spite of the costs to consumers, workers, and business owners? Because their union bosses want more money for the government, more government workers, more SEIU members, and more money from dues. And in its quest for money and power, SEIU clearly doesn't care how many people oppose its tax on businesses and consumers.
In the end, SEIU's threats failed to sway legislators, and SEIU backed down, agreeing not to try to get voters to scuttle the transportation funding plan. Maybe SEIU should leave the legislating to the legislators, stop wasting its members' dues money on political games, and focus instead on representing its members. After all, Oregon legislators have demonstrated that they are perfectly capable of hiking taxes; they don't need any more ideas from SEIU on how to soak taxpayers.
Richard McCarty is Director of Research for the Americans for Limited Government Foundation.