Kate Brown Calls M97 Only 'Viable Option' For Oregon

Gov. Kate Brown told a business group Wednesday the corporate tax initiative on the November ballot, Measure 97, wasn't her first choice for raising revenue.

Brown said she struggled with whether to support the tax proposed by a coalition of union, education and social service groups. But in the end, she said it was the only politically viable approach.

"This was a very difficult decision," Brown told a breakfast sponsored by the Portland Business Alliance. "I felt like I had no other option available to me, and that I believe very strongly that we need to sustain our investments in key programs that will enable Oregonians to thrive."

Brown said she has long supported a sales tax, but added it was clear Oregonians won't accept it. She also said she preferred not to use the initiative system to revamp the tax code. "It is a blunt instrument," she said.

The measure would impose a 2.5 percent tax on corporations doing more than $25 million a year in sales in Oregon. The measure would raise $3 billion a year.

The Democratic governor was peppered with tough questions about Measure 97 at the event. A show of hands before the questions demonstrated widespread opposition.

Ciritics asked the governor how she justified the measure given one non-partisan legislative study predicting that half of the costs would be passed on to consumers. Another fretted about the affect on home-grown corporations.

Related: Gov. Kate Brown: Consumers Would Pay Part Of Corporate Tax Increase Cost

"This will require corporations — businesses in Oregon — to pay their fair share," said Brown, adding she talked broadly with Oregon business people when she was trying to figure out if there was an alternative that could gain political traction.

Brown acknowledged in an interview with OPB last month that Oregon consumers would bear some of the costs of the tax — and her campaign later released a statement saying that corporations would bear a "vast majority" of the tax. On Wednesday, she said that "economists disagree about the impact" on consumers and that "Oregonians are smart enough to figure this out."

Sandra McDonough, the business alliance's president, said afterward Brown should be focused on finding other ways to solve the state's budget problems.