Oregon’s groundbreaking Universal Basic Income (UBI) proposal, set for a vote in November, has ignited intense debate, not only for its ambitious scope but also due to the significant out-of-state funding backing the measure. Measure 118, if passed, would make Oregon the first state to implement a statewide UBI, but the initiative faces strong bipartisan opposition and economic concerns.
Measure 118: Bold Experiment
Measure 118 proposes a $1,600 annual payment to every Oregon resident who has lived in the state for at least 200 days. The payments, which would be non-taxable and would not affect other benefits, would be funded by a 3% tax on the gross receipts of corporations generating over $25 million in annual sales. A family of four could receive $6,400 annually, with no strings attached.
Proponents of the measure argue that the UBI could significantly reduce poverty, stimulate economic activity, and improve the quality of life for residents. “More money in the pocket of Oregonians will boost our economy and mean more jobs, opportunities, and taxable revenue,” writes Oregon Rebate, the group backing the measure.
However, critics warn that the measure could have dire consequences for the state’s economy. The Tax Foundation, a Washington, D.C.-based think tank, has raised concerns about Oregon’s already high business tax burden and the potential for increased costs, job losses, and reduced funding for public services if the measure passes. “The [payment] might sound good,” the Tax Foundation noted, “but if it raises the cost of goods, drives jobs and economic activity out of state, and puts Oregon-based businesses at a massive disadvantage with their out-of-state competitors, it’s likely to be an awful deal for Oregonians.”
Oregon is no stranger to this kind of bill. For example, in 2017, the Fair Pay for All bill aimed to create new protections for workers whose pay is considered unequal. It included those who work with disabilities, who have a different race, color, sex, religion, origin, age, or sexual orientation.
Historical Context and Similar Initiatives
Oregon’s UBI proposal is unprecedented at the state level, but the idea is not entirely new. The Alaska Permanent Fund Dividend (PFD) offers a similar, though more limited, model by providing annual payouts to residents funded by oil revenues. However, the PFD is not a full UBI, as it is tied to specific state revenues and offers smaller payments.
Other U.S. cities and states have experimented with UBI pilot programs. Stockton, California, for example, launched a successful pilot that provided $500 monthly stipends to select residents. Internationally, countries like Finland and Namibia have conducted UBI trials with mixed results, highlighting both the potential benefits and challenges of such programs.
Bipartisan Opposition and Economic Concerns
In Oregon, Measure 118 has united both Democratic and Republican leaders in opposition. Democratic legislators, including House Speaker Julie Fahey and Senate President Rob Wagner, have expressed concerns that the measure could severely impact the state’s budget, reducing funds available for essential services such as K-12 education, healthcare, and human services.
“The increase in this tax [on corporations] will reduce the availability of general fund resources due to its interactions with existing tax and transfer programs,” the Oregon legislative analysis concluded. Republican opposition has been equally vocal, with the Oregon Republican Caucus labeling the measure the “largest tax increase in Oregon history” and warning that it is an “untested, dangerous experiment” that could destabilize the state’s economy.
Out of State Funding Raises Concerns
Adding to the controversy is the significant out-of-state funding backing Measure 118. California-based individuals and organizations have played a major role in financing the campaign to get the measure on the ballot. Venture capitalist Josh Jones, a prominent proponent of UBI, contributed $425,000, while other California entities, including Jones Parking Inc. and the Gerald Huff Foundation, have collectively contributed hundreds of thousands more.
This influx of external funding has raised alarms among opponents, who argue that out-of-state interests are attempting to influence Oregon policy in ways that may not align with the state’s needs. The Oregon Republican Caucus pointed to the 2020 Measure 110, which decriminalized hard drugs and was also heavily funded by out-of-state donors, as an example of the dangers of external influence in state policy.
Business Community Response
Oregon’s business community has responded strongly against the measure. Oregon Business and Industry (OBI), the state’s leading business lobby, is putting over $500,000 into a political action committee to fight Measure 118. The group argues that the measure’s tax on gross receipts, regardless of profitability, could devastate businesses already struggling with Oregon’s high tax burden.
One notable example is Oregon Health Sciences University (OHSU), which reported a $26 million operating loss for the six months ending December 31, 2023. The measure’s proposed tax would further strain OHSU’s finances, potentially threatening the state’s healthcare infrastructure.
Legal and Constitutional Challenges
Legal experts suggest that Measure 118 could face significant legal challenges if passed. Businesses may argue that the tax is unconstitutional or that it unfairly targets certain industries. Additionally, the measure’s impact on existing contracts, particularly those with fixed pricing, could lead to disputes and further complicate its implementation.
Pros and Cons of UBI
Supporters of UBI argue that it could reduce poverty, stimulate job growth, and promote gender equality. UBI trials in countries like Namibia and India have shown promising results, with significant reductions in poverty and improvements in health and education outcomes.
However, critics argue that UBI could actually increase poverty by diverting funds away from targeted welfare programs that directly assist those in need. They also warn that UBI is prohibitively expensive, with some estimates suggesting that a national UBI in the U.S. could cost trillions of dollars annually. Additionally, there are concerns that UBI could remove the incentive to work, leading to a less productive economy.
Public Opinion and Polling Data
Polling data leading up to the vote will be crucial in gauging public sentiment on Measure 118. Early indications suggest that younger voters and those in urban areas may be more supportive, while rural and older voters are likely to oppose the measure. The broader national discourse on income inequality, automation, and the future of work is also likely to influence voter opinions.
Impact on Migration Patterns
If passed, Measure 118 could have significant implications for Oregon’s population dynamics. The promise of a guaranteed income might attract new residents, particularly those seeking financial stability. However, this could strain the state’s infrastructure, housing market, and public services. Conversely, the increased tax burden could drive businesses out of the state, leading to job losses and economic decline.
Federal Policy Implications
Oregon’s UBI measure could set a precedent for other states or even influence federal policy discussions on UBI. Lawmakers in Washington may look to Oregon as a test case, with potential ripple effects in national debates on income inequality, job displacement, and economic security.
Conclusion
Measure 118 represents a bold social experiment with potentially far-reaching consequences for Oregon. While proponents argue that it could reduce poverty and stimulate the economy, opponents warn of significant risks, including economic instability, legal challenges, and the unintended consequences of out-of-state influence.
As Oregonians prepare to vote in November, the outcome could set a precedent that extends far beyond the state’s borders, shaping the future of UBI and the role of external funding in state politics.
