Tel. (503) November 21, NW 13 th Ave., #205 Portland, OR
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1 Contact: Anne Buzzini FOR IMMEDIATE RELEASE Tel. (503) November 21, NW 13 th Ave., #205 Portland, OR Oregonians Could Witness Most Expensive Ballot Measure Fight in State s History Findings from a recent DHM Research telephone survey show that Oregonians may be in for an intense campaign in deciding whether to raise corporate tax rates to fund state programs. DHM Research (DHM), in partnership with an anonymous third-party, conducted a telephone survey between November 12-16, 2015 of 500 likely Oregon voters to determine support for a measure that may appear on the November 2016 ballot. The margin of error is +/- 4.4%. The measure, Initiative Petition 28, would increase [ the] corporate minimum tax when sales exceed $25 million and would dedicate the additional revenue to education, healthcare, [and] senior services. In accordance with industry best-practices, DHM tested the certified ballot title and Yes and No vote result statements before providing voters with additional information about the measure, including a layman s explanation of what the measure does, reasons to support and oppose the measure, and possible alternatives to IP 28. The results of the initial ballot test showed strong support among Oregonians. Nearly six of 10 likely voters (59%) indicated that they would support the measure based on a reading of the ballot title and Yes and No result statements, and four of 10 (40%) of those voters said they strongly supported the measure. But support for the measure dropped 5 percentage points when voters were provided with a layman s explanation of what the measure would actually do. Voters were then provided with arguments both in favor of and in opposition to the measure and asked a third time whether they would vote for the measure if the election were held today Interestingly, support for the measure remained virtually unchanged, indicating that both sides of this issue present strong arguments that resonate deeply with Oregon voters. In corporation board rooms and labor union offices across the state, key decision-makers are reviewing survey results just like these. These institutions are preparing for a major fight, what could shape up to be the biggest and most expensive ballot measure showdown in Oregon s history. The stakes are high. The programs this measure seeks to fund, like Oregon s chronically underfunded public education system, are vital to residents quality of life and the state s overall economic success. But in order to raise the revenues to fund these programs, voters must usher in the largest tax hike in Oregon s modern history; the Legislative Revenue Office estimates the measure could have an annual impact of $2.6 billion, amounting to a 25% increase in the state s budget. (503) NW 13 th Ave., #205, Portland, OR
2 These results can be interpreted as good news for the campaigns on either side of the issue. The positive results of the initial test will drive support, while negative messaging and possible alternatives both of which tested well will be used to sow doubt in voters minds. The virulent support and opposition could lead to a tough fight, resulting in tens of millions of dollars spent on each side. This ballot measure campaign is a dark cloud on Oregon s horizon, says Adam Davis, founding partner of DHM Research. Having studied Oregonians values and beliefs for almost four decades, I m concerned that the amount of money spent on advertising, and the nature of that advertising, will just feed the negativity people have about government and politics. I m afraid that it will result in less broad-based participation in the system and further political polarization in our state at a time when we need everyone on deck and working together. The survey shows voters are open to alternatives to IP 28, as currently structured. A plurality of voters would support a more modest version of the measure that either exempts necessities like food, medicine, and gasoline from the tax or provides additional tax relief for Oregon households. These findings present lawmakers with an opportunity to craft an alternative to IP 28 which could appeal to a wider audience of voters. Adds Adam Davis, Overhauling the corporate tax structure will have a major impact on Oregonians. It is of critical importance that they have access to the same data on which proponents and opponents are acting. Response Category Table 1 Support for IP 28 Initial Test N=500 After Explanation N = 500 After Messaging N = 500 Total Yes 59% 54% 53% Yes strongly 40% 34% 35% Yes somewhat 19% 19% 18% Total No 30% 40% 40% No somewhat 9% 11% 12% No strongly 21% 29% 28% (DON T READ) Don t know 11% 6% 6% Note to Editors: DHM Research is a highly respected leader in opinion research, providing consultation for private, public, and non-profit clients. Located in Portland, Seattle, and Washington, D.C., we are a non-partisan and independent firm. ### 2
3 IP28 Survey Oregon Statewide; 2016 General Election Likely Voters N=500; 15 Minutes GENERAL MOOD 1. All things considered, would you say that things in Oregon are headed in the right direction or would you say that things are off on the wrong track? Right direction 47% Wrong track 41% (DON T READ) Don t know 13% BALLOT TESTS I would like to ask you about a measure that Oregonians may be asked to vote on in the November 2016 election. Listen closely. I am going to read them to you actually as they will appear on the ballot. Then tell me if you are more likely to vote yes to support the measure or no to oppose it. 2. Increases corporate minimum tax when sales exceed $25 million; funds education, healthcare, senior services. A YES vote increases corporate minimum tax when sales exceed $25 million; removes tax limit; exempts "benefit companies"; increased revenue funds education, healthcare, senior services. A NO vote retains existing corporate minimum tax rates based on Oregon sales; tax limited to $100,000; revenue not dedicated to education, healthcare, senior services. If the election were today, would you vote yes or no on this measure? (Wait and ask strongly/somewhat) Total Yes 59% Yes strongly 40% Yes somewhat 19% Total No 30% No somewhat 9% No strongly 21% (DON T READ) Don t know 11% 3
4 3. Let me now add some details about this measure and share some statements that supporters and opponents of this measure are saying about it. First, the details: This is a tax of two and one-half percent to be paid by corporations on products they sell in Oregon when their total sales exceed $25 million. It applies at each step of the production, distribution and retail process. So a chair made with Oregon lumber could be taxed at several points from the harvesting of timber to the making of the chair to its warehousing, transportation and final sale at a furniture store. The tax is an alternative minimum tax, so corporations would not pay this tax if they pay a greater amount in taxes on their profits. The tax would raise more than $2.5 billion per year, which would boost state revenues by 25%. The money would go to schools, health care and senior services. Supporters say that this tax is needed to ensure that corporations pay their fair share of taxes and that the bulk of the new taxes would come from large, out-of-state corporations like Wal-Mart. They also say that the new revenue is needed to improve our schools, meet the rising costs of health care, and expand services for seniors. Opponents argue that this is a stealth sales tax, which will be passed on to Oregon consumers in the form of higher prices for groceries, medicines, gasoline and other necessities. They also say that this will be the largest tax increase in Oregon history and will hurt our economy. Now that you have this information, let me ask again, if the election were today, would you vote yes or no on this measure? (Wait and ask strongly/somewhat) Total Yes 54% Yes strongly 34% Yes somewhat 19% Total No 40% No somewhat 11% No strongly 29% (DON T READ) Don t know 6% 4
5 REASONS TO SUPPORT Next, I am going to read to you reasons that some people give in support of the measure. For each, please tell me if you think it is a very good, good, poor, or very poor reason to support the measure. (Randomize Q4-9) Response Category 4. Oregon has the lowest corporate taxes in the country. Corporations simply are not paying their fair share at a time when children are attending schools that are overcrowded, and seniors are not able to afford lifesaving medications. It s time for business to step up, and this measure would ensure that they do. 5. Everything has to be paid for somehow. With low corporate tax rates, that means that everyday Oregonians are being forced to foot more of the bill for schools and state services. This measure will restore a fair balance so that working families get more services in return for what they are already paying in taxes. 6. Corporate profits are at an all-time high, while middle-class wages are stagnant. By funding schools, health programs, and senior services, this measure will make it easier for Oregonians to provide for their families and make sure everyone has an opportunity to get ahead. 7. This measure will encourage corporations to be better community members. It exempts benefit corporations, which have committed to making a positive difference to society and the environment, in addition to making profits. More businesses will be motivated to consider the well-being of the whole community. 8. Most of the increased tax revenue under this measure will come from large, outof-state corporations like Wal-Mart. Those corporations can afford to pay more for doing business in Oregon. good Good Poor Poor 31% 36% 14% 15% 4% 26% 40% 17% 14% 3% 28% 37% 18% 13% 4% 22% 37% 22% 15% 4% 29% 34% 19% 14% 4% 5
6 Response Category 9. Oregon s schools are underfunded. We have one of the shortest school years and largest class sizes in the country. The new revenue from this measure will enable us to hire more teachers, add back school days and programs and better prepare our kids for the 21 st Century economy. good Good Poor Poor 36% 33% 14% 14% 4% REASONS TO OPPOSE Next, I am going to read to you reasons that some people oppose this measure. For each, please tell me if you think it is a very good, good, poor, or very poor reason to oppose the measure. (Randomize Q10-15) Response Category 10. This measure would be by far the largest tax increase ever seen in Oregon. It is estimated to increase taxes by $2.5 billion a year, which amounts to a 25% increase in the state budget. 11. There is no plan for how to spend the billions of dollars in new revenue from this tax. We shouldn t hand over taxpayer money to the government without a detailed plan for how it will be spent with accountability for results. This measure is a recipe for wasteful spending and political favoritism. 12. This measure taxes revenue not profits. That means that many businesses will face new, higher taxes even when they are making very little money, or even during years when they lose money. This will mean that more companies will go out of business, and those that do survive will hire fewer employees or pay them less. 13. The measure is a stealth sales tax that will be passed on to Oregon consumers. And there are no exemptions for food, medicines and gasoline. Higher costs for these products will hit seniors on fixed incomes and low and middle-income working families especially hard. good Good Poor Poor 24% 29% 30% 10% 7% 31% 29% 26% 11% 3% 32% 28% 24% 12% 5% 31% 33% 23% 11% 3% 6
7 Response Category 14. This new tax will apply to all transactions in the production, transportation and final sale of a product. So this 2-1/2% tax could easily boost the final price of a product made and sold in Oregon by more than 5%. This is a prescription for steep markups in prices that will be passed on to Oregon households. 15. This tax will hit certain Oregon businesses especially hard. Those in engineering, computer software, architecture and other services will have to pay the tax on everything they sell around the world, just because they are headquartered in Oregon. Many of these companies will move outside of Oregon if they have to pay this tax on their global sales. good Good Poor Poor 27% 32% 26% 10% 5% 31% 31% 24% 10% 5% RE-TEST People sometimes change their mind when they learn more about an issue. Now that you ve heard more about it, I am going to read the measure to you again. Please listen closely, then tell me if you are more likely to vote yes to support the measure or no to oppose it. 16. Increases corporate minimum tax when sales exceed $25 million; funds education, healthcare, senior services. A YES vote increases corporate minimum tax when sales exceed $25 million; removes tax limit; exempts "benefit companies"; increased revenue funds education, healthcare, senior services. A NO vote retains existing corporate minimum tax rates based on Oregon sales; tax limited to $100,000; revenue not dedicated to education, healthcare, senior services. If the election were today, would you vote yes or no on this measure? (Wait and ask strongly/somewhat) Total Yes 53% Yes strongly 35% Yes somewhat 18% Total No 40% No somewhat 12% No strongly 28% (DON T READ) Don t know 6% 7
8 ALTERNATIVES Some people are considering an alternative to the measure we have been discussing. I d like to read you some of the changes being considered. For each, please tell me if that change would make you much more supportive, somewhat more supportive, somewhat more opposed, or much more opposed. If it makes no difference, you can let me know that too. (Randomize Q17-20) Response Category 17. Reduce the proposed new tax rate. This would keep the basic structure of the measure in place but reduce the total amount of new revenue it raises and reduce the impacts on consumers as well 18. Provide exemptions for business revenue from sales of gasoline, food, health care and medicine. This would lower the total amount of new revenue raised but provide protections against increasing the costs of basic necessities 19. Keep the basic structure of the measure, but dedicate at least half of the new revenue it raises to reduce property taxes for homeowners and provide tax credits for lowand middle-income renters. This would increase taxes on businesses by a lesser amount and lower taxes for individuals at the same time 20. Keep the basic structure of the measure but add a provision that if tax revenues increase faster than average household incomes, the additional money must be returned to taxpayers by lowering individual tax rates Much more support Smwt more support Smwt more oppose Much more oppose No diff. 18% 21% 12% 11% 33% 5% 23% 27% 8% 10% 28% 4% 24% 27% 11% 12% 23% 2% 25% 25% 9% 13% 26% 2% 8
9 Now that you have heard these other proposals for modifying the ballot measure that we have been discussing, which of the following options would you support? Remember that this ballot measure increases corporate minimum tax when sales exceed $25 million; funds education, healthcare, senior services. 21. (DO NOT READ) I am going to read you five options. Please listen all the way through, then choose the options that reflect your view. You may choose more than one. a. I would vote for the measure as is 36% b. I would vote for the measure if it were modified to reduce the tax impact on businesses and consumers, even though that would reduce the amount of new money for schools, healthcare and senior services c. I would vote for the measure if it provided tax relief for Oregon households, even though that would reduce the amount of new money for schools, healthcare and senior services 20% 21% d. I would not vote for the measure in any form 28% (DON T READ) Don t know 5% DEMOGRAPHICS 22. Gender (By Observation) Male 49% Female 51% 23. Age (From Sample) % % % % 24. Area of state (From Sample) Tri-County 44% Willamette Valley 27% Rest of State 29% 9
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