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Oregon Governor Calls For May 21 Special Session On Business Tax

<p>Oregon Gov. Kate Brown enters the House chamber for the 2018 State of the State address, Feb. 5, 2018.</p>

Oregon Gov. Kate Brown enters the House chamber for the 2018 State of the State address, Feb. 5, 2018.

Oregonians won't have to wait long after the May 15 primary to see what could be the first legislative showdown of general election season.

Gov. Kate Brown Tuesday announced she intends to call a special session of the Legislature on May 21 for an attempt to pass a roughly $15 million annual tax break to a sliver of Oregon businesses.

"I’m calling for a special session on May 21 to make this change to keep our small businesses growing," Brown said in a statement.

It's the first special session Brown has called for during her three years in office, and it could be an uneasy one. The governor announced on April 6 that she was signing a bill that effectively blocked a tax break worth hundreds of millions of dollars for Oregon "pass-through" businesses, a move that angered Republicans.

Brown's push for a far smaller tax break is an olive branch as she runs for reelection. In recent weeks, the governor's office has floated legislation that will give lower tax rates to a segment of so-called "sole proprietorships." The state gave the same tax rate to a larger segment of businesses in 2013.

But the scope of the proposal is limited. The state has more than 260,000 sole proprietorships, but only about 9,000 would be covered by the bill she's floating. Even so, Brown is making the case that her bill is urgent.

"I’m simply not willing to let these main street businesses ... go through another tax year with unfair tax treatment as compared to their larger competitors," Brown said.

Brown's statement Tuesday is a way to put pressure on Republicans to follow her lead. Conservative lawmakers aren't likely to oppose a tax cut for businesses, but they could make the passage painful.

That's because the governor has said she wants to get a special session completed in a single day. To do so, she'll need Republicans' assent to suspend normal legislative rules.

Tayleranne Gillespie, a spokeswoman for the Senate Republican Caucus, said before Brown's announcement of a date that Republican senators were tentatively willing to go along with a one-day session — so long as the scope remained limited.

"We still hold the cards in our hand in terms of suspending rules," Gillespie said. "Right now we’re more concerned about if it’s longer than a day. We don’t want people trying to push other things through."

Senate Minority Leader Jackie Winters, R-Salem, said in a statement that Republicans will work with the governor to help small businesses, though they think she's not going far enough. 

"This so-called 'emergency' was caused by the governor and the majority party," Winters said in a statement. "Their actions during the 2018 session to take away a small business tax cut is the reason we are now being called in to special session." 

House Minority Leader Mike McLane, R-Powell Butte, said he hopes the governor and Democrats will limit the scope of the special session: "In the end, the tone and tenor of the session will be defined by whether Democrats are able to stick to their word."

Brown's choice of date for a special session is built around efficiency. Legislators are already scheduled to be in Salem for regularly scheduled legislative days, a series of meetings that occur several times a year outside of the normal legislative schedule, so additional costs for holding a special session are minimal.

The session also could unveil an interesting dynamic. State Rep. Knute Buehler, R-Bend, is the presumptive Republican frontrunner to challenge Brown in November's gubernatorial election. If he wins the nomination in the May 15 primary, he may be torn between giving small businesses a tax cut and handing Brown a legislative victory.

Copyright 2018 Oregon Public Broadcasting

Dirk VanderHart is JPR's Salem correspondent reporting from the Oregon State Capitol. His reporting is funded through a collaboration among public radio stations in Oregon and Washington that includes JPR.