by Jay Bozievich, originally posted on the Register Guard website on May 6th.
With House bills 2379 and 2598, Rep. Paul Holvey is proposing to make housing more expensive by adding taxes to the wood products industry that already pays 50% more in state and local tax burden than other businesses.
It is important to first state that taxes on business are paid for in the price of the products and services they sell. A recent front-page article from The Register-Guard focused on the difficulty of rebuilding from the devastating wildfires as lumber prices are reaching new highs.
A study by Big Four accounting firm Ernst and Young for Oregon Business and Industry released in October shows Oregon is moving from a low-tax state for business to a high-tax state. The study shows the taxes added on business in the 2019 legislative session moved Oregon from No. 40 in business tax burden to No. 19, ahead of most western states.
Keep Oregon’s growing taxes on all businesses in mind as a new study by Ernst and Young done for the Oregon Forest Industry Council shows that the forest products industry pays a higher tax burden than other business in Oregon by a significant amount. The forest product industry currently pays a 4.8% state and local tax burden while the average for all Oregon business is only 3.5%. If you add in the fire protection assessments woodland property owners pay, the tax burden increases to 6% and the all business average remains the same at 3.5%.
In 2022, after the Corporate Activity Tax and the Paid Family Leave Tax are fully implemented, the forest product industry will be paying a 6.8% tax burden while the all-business average will be at 4.4%, a 50% increase in tax burden!
At a more local level, the No. 1 and No. 2 largest property taxpayers in Lane County are forest products entities. International Paper paid just less than $4.1 million in property taxes for the current tax year. Weyerhaeuser paid slightly more than $2.9 million. The forest products industry also makes up many of our top taxpayers. Seneca comes in at No. 16 with $1 million a year, Roseboro at No. 21 with $674,000 and Kingsford at No. 28 with $542,000.
Local property taxes support services like law enforcement, teacher salaries, road maintenance and parks. Local government in Lane County depends on the forest products industry to pay for these services.
Unfortunately, there is now an effort to add even more taxes to the forest products industry despite this clear evidence that the industry already pays more taxes than other business in Oregon. Even worse is that some of the same legislators who impose these taxes also complain about the housing crisis and homelessness. They fail to realize that the additional tax burden on an industry supplying the materials for housing will make the housing crisis worse.
The forest products industry in Oregon also pays high wages with benefits that can support a family. The industry is a critical piece of our local economy and is estimated to account for 8.9% of the Lane County economy, according to a study done by Philip Watson, Ph.D., from the University of Idaho.
The forest products industry pays 50% more taxes than other Oregon business in a state becoming a high-business-tax state. This industry pays its fair share and the Legislature should stop its efforts to place additional taxes on the industry. The Legislature should be looking for ways to make housing less costly and more available, not adding to the cost through punitive taxation.
Jay Bozievich is a Lane County commissioner representing west Lane County. He is also a civil engineer responsible for the development of thousands of housing units during the course of his career.