Oregon Senate endorses business, tuition tax breaks

SALEM --By unanimous vote, the Oregon Senate gave final approval to Senate Bill 301 Tuesday.

The bill, which sparked threats from business lobbyists and partisan debate in the House, was intended to reconnect Oregon to portions of the federal code for 2010.

One key provision would allow Oregonians a state tax deduction of up to $4,000 for college tuition, books and other related expenses. It also would allow parents to keep their children on their health plans until they reach age 26 without being taxed on the benefit.

The bill did not include a host of business tax breaks, including accelerated depreciation on equipment. But lawmakers -- as well as the business community -- thought that portion of state law would be fully reconnected with the federal code for 2011.

But just before the final House vote last week, lawmakers not only discovered mistakes in the tuition tax bill, they also learned that Oregon law did not reconnect for the 2011 business breaks.

Business and industry lobbyists flooded House members with letters asking for a fix to be included in the bill. They warned that failure to do that could bring back the bitter political divisiveness seen in 2009, when legislators voted to increase taxes on corporations and high-income earners.

The tax breaks will mean that businesses will save about $93 million and state government will have that much less to spend on schools, prisons and social services in the next two years. But supporters argued the breaks are necessary to get Oregon's economy back on track.

Republicans pushed Monday to amend the bill to include the business tax breaks. In the end, 11 House Democrats went along.

Citing the overwhelming vote in the House, Senate Democrats said they wouldn't  object. The Senate concurred with the House amendments Tuesday without debate.

--Michelle Cole
 

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