Corporate kickback controversy

Oregon State House Speaker and U.S Senate candidate Jeff Merkley (D-Portland) is pushing back against Sen. Gordon Smith's (R-Pendleton) claim that the Speaker of the House kept money from hardworking Oregonians by revoking a 2007 tax kickback.

At the center of this controversy is the Oregon corporate tax kickback, Merkley’s support of revoking this refund, and instead using it for an Oregon Rainy Day fund. On Thursday, while he was accepting an endorsement from the Oregon Farm Bureau, Smith accused Merkley of withholding that money from hard working Oregonians.

The corporate kickbacks controversy came to light during Smith’s speech on Thursday when he was accepting the endorsement from the Oregon Farm Bureau. According to the Smith campaign, Smith sought to create a comparison between his and Merkley’s record on taxes.

The kickback is supposed to be a tax break to businesses when state revenue exceeds expectations. But in 2007, Merkley and the Oregon legislature voted on House Bill 2027, which ended the Oregon corporate kickback and instead put the money into a rainy day fund. According to the Oregon Center for Public Policy, that number should have been around $206 million in 2007 alone.

“Merkley chose to raise taxes to create a rainy day fund when they state has record surpluses,” Smith campaign spokeswoman Lindsay Gilbride said in an e-mail.

But on Monday Merkley’s campaign had a different response toward Merkley’s action as Speaker of the House to end the corporate kickbacks, and cited a figure from the Oregon Center for Public Policy which stated in 2006 that 86 percent of the money Oregon was giving back as its corporate kicker went to out-of-state corporations.

“Smith has all these nice soft commercials trying to show himself as a Democrat, but this just speaks to the difference between Jeff Merkley and Gordon Smith,” Merkley spokesman Matt Canter said. “Smith fought hard for tax breaks for corporations at the expense of fiscal care.”