Sid DeBoer - Founder & Chairman of the Board of Lithia Motors

Thank you very much.

What an impact it'll have on them. It is not something that's going to be easily swallowed and paid for by big corporations. That is a misnomer that's been propagated by those who are for it. I agree that Oregon needs more revenue but taxing just large corporations like Lithia Motors when our competitors won't have to pay the 2.5 percent sales tax as it were, they can't be passed on to the customer because our competitors won't have to pay it. Lithia Motors is uniquely public and cannot become a regular corporation that won't have to pay this. Only large C Corporations will have to pay this tax so everything from healthcare, from banking, from utilities, from groceries, has got to go up. All of those businesses have very thin margins and can't afford to just swallow a tax on their sales. So everyone in Oregon will pay for this. It is the largest tax increase in the history of Oregon that's being proposed. It's being sold on the premise that it's really going to help schools and it's going to help with Medicaid and it's going to help with the PERS problem in Oregon. I agree totally that those things need solutions but there are better ways, not this way. This is so discriminatory against companies like ours. It takes all of our profits in Oregon in those years where we're just an average earnings season and it takes all of this money, even if we don't make a profit. So it's really difficult for Lithia Motors to deal with Measure 97. I'm asking people to please vote no and help us recreate a new way to tax Oregonians and tax corporations that would be fair to all corporations. Something like a half a percent gross receipts tax on all companies in Oregon, including smaller businesses, and everyone would pay it and it would be a credit against what they were obligated to pay in their income tax. So no one would get a tax cut out of it and it would give the state more revenue and it would be a consistent revenue that wouldn't go up and down with earnings. And that would provide help for the schools and PERS and Medicaid and all the problems Oregon faces. We have tried to propose that. There's two or three of the state senators, in fact Alan Bates was for this and so was Mark Hass, who's one of the leaders in the legislature in Oregon, and of course my brother Allen is running based on the premise that he's going to help change some of these things in Oregon and he's got an opposition to Measure 97 as well. People do not understand that this is the largest tax increase and they're going to mostly pay for it.

Well first of all, the corporations have not done a study, okay. And we took the study that was done by the independent legislative body that evaluates all measures and puts out a report, how it will impact Oregonians. And they consistently have said it will cost Oregonians every family, and they estimate it somewhere between 800 and 1200 dollars a year, which is around 100 dollars a month for every family in Oregon. And they also estimated that there would be an elimination or reduction in the growth of jobs in Oregon in the private sector by about 38,000 jobs, and that there would be an increase somewhere between 12 and 15,000 public service jobs. So this is an attempt to expand government in Oregon and pay for it on the backs of large corporations when in reality the people, the citizens of Oregon will pay for it, and most of the lower income people will pay more as a share of their revenue and their income than will the more wealthy people.

We hope to stay because we don't pay taxes as a corporation because we're in Oregon. Our stores that are in Oregon pay a tax and we're wrestling with how we deal with that. There are several options. It's not good for us.

Well, Washington has a gross receipts tax and it's staged based on the profit margins for the type of businesses. And businesses like ours that only make 2.5 percent can't pay a two and a half percent tax and function in Oregon. And particularly, we can't pass it on. It would be almost 1,000 dollars a car and our competitors aren't going to pay it. We can't charge our customers 1,000 dollars more than the competitors, so it's not an option for us to probably do business in Oregon selling cars. We're big enough, it doesn't hurt our company that badly, but it sure is hard because we started in Oregon, we're an Oregon corporation, we're a Fortune 500 company, and we believe in this state and we want to be part of it and we want to find a better solution than Measure 97. Please vote no on Measure 97.

We don't think, there may be a couple now, but we know that they don't have to stay a C corp. They can avoid the tax by becoming an S corp, which means the individuals that own it pay the tax, not the corporation.

We have no option. We have over 35 owners, we have thousands of owners, many owners of our stock right here in Medford, Oregon.