Senate passes SB 1507A to disconnect selected federal tax provisions and expand earned-income credit

The Oregon Senate passed Senate Bill 1507A on third reading after extended floor debate, voting to adopt the measure by constitutional majority. Supporters said the bill protects state services and provides targeted relief to working families; opponents argued the measure shifts costs onto Oregon businesses and effectively raises revenue.

Senator Anthony Broadman, speaking for the majority, described SB 1507A as “practical, balanced, and focused,” saying it expands Oregon’s earned-income tax credit, creates an Oregon jobs tax credit for firms that create good-paying jobs, and disconnects certain costly federal tax provisions (notably a form of bonus depreciation) by spreading those deductions over the useful life of assets. “This bill lowers taxes on businesses through a jobs tax credit. It lowers taxes on over 200,000 Oregon households through expansion of the earned income tax credit,” Broadman said on the floor.

Opponents, led in floor remarks by Senator Starr and others, said the revenue estimates attached to the bill indicate it will raise revenue rather than cut taxes for some Oregonians; Starr argued the bill’s revenue statement shows an increase on the order of several hundred million dollars in the biennium. Proponents countered with data and testimony that the bill would recoup roughly $311.6 million by disconnecting select HR 1 provisions and that the earned-income tax credit expansion would provide immediate relief to lower- and moderate-income households.

Specific provisions cited during debate included an expansion of Oregon’s earned-income tax credit (described on the floor as increasing the state portion to about 14% of a taxpayer’s federal credit, with larger percentages referenced for households with very young children), an Oregon jobs tax credit aimed at rewarding in-state job creation, and several disconnections from federal tax changes in HR 1. Senators on both sides cited industry testimony, regional economic rankings, and local business anecdotes in support of their positions.

The Senate’s roll-call on final passage recorded 17 ayes and 13 nays; a number of senators later filed vote explanations on the record. Following the vote the chamber continued with other calendar and procedural business and adjourned until the scheduled next session. The bill’s passage now moves it forward in the legislative process per regular enactment procedures.