Oregon’s Measure 118: Cash Rebates or a Cash Grab?

With the upcoming vote on Measure 118, Oregon is setting the stage for a groundbreaking experiment in economic reform. This proposal, if passed, would introduce a substantial corporate tax to fund direct cash rebates to all Oregonians. While supporters hail it as a revolutionary step to fight poverty, critics argue it could strain the state’s economy and budget. In this deep dive, we’ll cover what Measure 118 is, its potential impact, why it’s so divisive, and what it means for the future of Oregon.

What Is Measure 118?

At its core, Measure 118 aims to introduce a new corporate tax that would redistribute revenue directly to Oregon residents. Modeled on universal basic income (UBI) principles, this measure would ensure that every Oregonian, regardless of income, receives a no-strings-attached payment from the state. The initiative reflects a growing interest in guaranteed income policies that have gained momentum across the U.S. in recent years.

1. How It Works: If Measure 118 passes, corporations with substantial sales in Oregon would be taxed, creating a pool of funds allocated for quarterly rebate checks sent directly to residents.
2. Eligibility: All state residents qualify, meaning everyone from the youngest child to the oldest retiree would receive these payments.
3. Projected Payments: Estimates indicate that the first annual payments could range from $1,035 to $1,286 per person, potentially increasing in subsequent years.

The Origins of Measure 118

Measure 118 was spearheaded by Antonio Gisbert, a former labor organizer from Portland. Gisbert began advocating for the measure after seeing the economic impact of the COVID-19 pandemic and the high demand for economic security measures. He and a small group of supporters gathered signatures, and with substantial financial backing from supporters in California, they succeeded in placing it on the ballot.

1. Previous Attempts: This isn’t Oregon’s first flirtation with corporate tax initiatives. Voters shot down a similar proposal in 2016, but proponents argue that the direct cash benefit of Measure 118 could sway public opinion this time around.
2. Support from Outside Oregon: California-based backers, including tech entrepreneurs and venture capitalists, have injected significant funds into the campaign, seeing it as a possible model for other states.

The Case for Measure 118: Fighting Poverty in Oregon

Supporters of Measure 118 believe it could significantly reduce poverty, as cash payments could help families struggling with rising costs of living. Here’s a look at the primary arguments for the measure:

1. Direct Financial Support: In the face of inflation and rising housing costs, these payments could provide immediate relief to households, stabilizing finances and supporting local economies.
2. Corporate Accountability: The tax would largely target large corporations with significant sales in Oregon, aligning with public sentiment that companies should contribute more to the communities they profit from.
3. A Model for Economic Resilience: Proponents argue that UBI models like Measure 118 encourage broader economic participation, helping to mitigate the effects of economic downturns.

Major Arguments Against Measure 118

While supporters see Measure 118 as a much-needed economic boost, opponents argue it could hurt the state’s economy and residents in the long run. Here’s why:

1. Increased Consumer Prices: Corporations affected by the new tax could pass the cost onto consumers, raising prices for essential goods and services. Critics argue this could nullify the benefits of the cash rebates for many Oregonians.
2. Budget Strain: Opponents fear the rebates could eventually drain state resources, especially if the tax revenue does not meet projections. Legislative Revenue Office analysis suggests that the measure may actually pay out more in rebates than it collects in revenue, creating a potential budget shortfall.
3. Impact on Local Businesses: Small and mid-sized businesses may face indirect cost increases due to supply chain adjustments, ultimately impacting the overall economic landscape of Oregon.

Who Supports Measure 118?

The measure has drawn endorsements from a range of progressive groups and political leaders who view it as a bold solution to growing economic inequality. Key supporters include:

1. Advocacy Organizations: Some social justice and economic equity organizations believe that Measure 118 represents a tangible way to reduce poverty.
2. Local Leaders and Activists: Many of the initiative’s supporters are community organizers and activists who have long advocated for economic reform in the state.
3. Young Voters and the Economically Disenfranchised: Oregon’s younger voters, who often feel marginalized by current economic structures, have shown enthusiasm for the measure, hoping it may create a fairer economic system.

Key Opponents and Their Concerns

Despite progressive support, Measure 118 has sparked significant opposition from both sides of the political spectrum. Here’s a look at who’s leading the charge against it and their reasons:

1. Business and Industry Groups: The Oregon Business & Industry group, alongside high-profile brands such as Nike and Tillamook, have poured millions into opposing the measure. They argue it would create a hostile business environment, deterring future investment in the state.
2. Labor Unions: Interestingly, labor groups that generally support higher taxes on corporations oppose Measure 118. They worry about its potential negative impact on public funding for essential services like education and health.
3. Political Figures: Oregon Governor Tina Kotek and other state leaders have voiced concerns over Measure 118, pointing out its flaws and questioning its long-term feasibility.

Economic Projections: What Will Measure 118 Cost?

According to the Legislative Revenue Office, Measure 118 could potentially increase prices by 1.3% by 2030. Additionally, the policy might slow down employment and wage growth by a small percentage, which critics argue would be particularly detrimental in an already tight labor market.

1. Direct Economic Impact: If Measure 118 increases consumer prices, Oregon families might see limited net benefits from the rebates.
2. Long-Term Budget Implications: With an estimated $1 billion potential shortfall in the state budget, opponents argue that public services could suffer, affecting everything from schools to healthcare.

Potential Social Benefits of Measure 118

Supporters claim that Measure 118 could have positive social implications beyond economics. Here’s a look at some of the anticipated social benefits:

1. Reduced Poverty Rates: Regular cash payments could lower Oregon’s poverty rate, offering relief to households in need.
2. Improved Health Outcomes: Increased financial security is often linked with better mental and physical health, as families face less stress related to daily expenses.
3. Enhanced Educational Opportunities: With additional income, families might be able to afford better resources for their children, contributing to a more educated and skilled future workforce.

Potential Risks: Unintended Consequences of Measure 118

As with any large-scale policy, Measure 118 comes with potential risks that could affect Oregon residents and businesses alike.

1. Risk of Corporations Leaving Oregon: Higher taxes may discourage corporations from operating in Oregon, resulting in potential job losses and decreased economic growth.
2. Equity Concerns: Some groups argue that the universal structure of the rebate ignores the specific needs of low-income families, as wealthier residents would receive the same amount as those in need.
3. Impact on Public Programs: If the measure drains state revenue, public programs essential to Oregon’s wellbeing, including education, healthcare, and infrastructure, could face cuts.

What Happens if Measure 118 Passes?

If voters approve Measure 118, it will become one of the first statewide UBI-like programs funded through corporate taxation in the country. This could serve as a blueprint for other states, sparking national interest and potential adoption.

1. Rollout Process: The state will begin collecting the new tax and start distributing payments, likely by 2026.
2. Adjustment Period: Legislators may need to refine the measure post-implementation, especially if it results in unexpected budget strains or economic impacts.
3. Increased National Attention: Oregon could become a model for other states exploring similar policies, potentially sparking a shift in how Americans think about basic income.

What if Measure 118 Fails?

If voters reject Measure 118, advocates may still pursue similar initiatives, adjusting their approach based on public feedback. Failure could prompt supporters to focus on more targeted poverty reduction methods rather than universal cash payments.

1. Alternative Proposals: Future proposals may focus more narrowly on low-income residents to address specific needs without impacting the entire budget.
2. Public Sentiment and Advocacy: The results could reflect Oregon’s stance on corporate taxation and economic reform, influencing future political and legislative priorities.

Conclusion

Measure 118 is not just another policy proposal; it’s a test of Oregon’s appetite for transformative economic reform. With passionate arguments on both sides, the outcome of this measure will resonate beyond Oregon, contributing to the broader discussion on income equality, corporate responsibility, and poverty alleviation in America. As the vote approaches, Oregonians must weigh the immediate financial relief it promises against the potential economic risks it entails.