Oregon voters will decide in November whether to approve the creation of a constitutional amendment prohibiting new levies on the price of groceries in the state.
Measure 103, the Ban Tax on Groceries Initiative, would prohibit the state and its local governments from enacting additional taxes on “raw or processed food or beverages intended for human consumption,” including sugar-sweetened beverages (SSBs).
If a simple majority of voters approves the question, any new “tax, fee, or other assessment” on groceries would be prohibited, including any new excise, gross receipts, or sales taxes. The measure would also repeal any existing local grocery taxes enacted after October 1, 2017.
Oregon does not levy a statewide sales tax, and local sales tax rates vary by municipality.
Cites Benefits to Grocers, Shoppers
Lindsey Stroud, a state government relations manager at The Heartland Institute, which publishes Budget & Tax News, says taxes on groceries have a disparate impact on lower-income households and small grocery stores.
“Grocery taxes are most likely to affect impoverished people and rural grocers the most,” Stroud said. “With higher taxes and lower sales, rural grocers can’t invest as much in stocking a diverse array of options for consumers, and impoverished people often lack the resources to travel in order to find cheaper food options. Hopefully, the amendment will level the playing field across the state.”
Says Consistency, Fairness Important
Steve Buckstein, a senior policy analyst at the Cascade Policy Institute, says taxing necessities is inherently unfair.
“Consistent tax standards are important for everything, but especially groceries that everyone buys,” Buckstein said. “Low-income people generally spend a higher percentage of their income on food. This amendment specifically stops local and state governments from taxing something everyone needs to purchase.”
Stroud says lawmakers should not use tax policy to influence what people choose to buy, which is what many of these taxes are intended to do.
“You should not be putting taxes on products to manipulate people’s consumption, especially when smaller grocery stores and consumers will have to bear the burden,” Stroud said.
In November 2017, the Coalition for Healthy Kids and Education, a Multnomah County, Oregon organization advocating a new tax on sugar-sweetened beverages, announced plans to delay a proposed May 2018 ballot question that would have created a new excise tax collected from wholesalers on sales of any drinks containing added sugar.
The organization’s reversal voided signatures previously submitted to the county government’s Elections Division and squandered a $915,000 contribution from former New York City mayor Michael Bloomberg.
In February 2018, the organization backtracked further, announcing it would not try to place the question before voters on this year’s November ballot.
Buckstein says Measure 103 is intended to stop ideas like the stalled Coalition for Healthy Kids and Education SSB tax.
“Part of the impetus for this amendment is the movement to tax unhealthy food and drinks,” Buckstein said. “This is sort of a preemptive strike to stop that sort of thing.