Oregon lawmakers look to tax insurance policies to fight wildfires

11 May 2021

Published by https://www.thecentersquare.com/

USA – (The Center Square) – Wildfires are costing Oregon more than ever. State lawmakers are looking to tax insurance holders more than $1,000 each to foot the bill.

Oregon has spent $1.5 billion fighting wildfires since 2000, the second-highest costs in the country behind California. The 2020 wildfire season cost the state $130 million and razed more than 1.2 million acres. That’s almost double the 10-year average. Those costs were offset by $70 million in federal aid that paid for temporary federal housing and clean-up projects, among other relief.

House Bill 3160 would create a state account to cover the costs of wildfires. If enacted, the Oregon Wildfire Preparedness and Community Protection Fund would be financed by $10 yearly surcharges on property and casualty insurance policies plus a one-time $1,000 fee due upfront by July 15.

The bill would split the revenue three ways. Half of it would go to the State Fire Marshall, while the remaining money would be divided evenly between the State Forestry Department and the Oregon Watershed Enhancement Board.

Sponsored by Rep. Pam Marsh, D-Ashland, and Sen. Lew Frederick, D-Portland, HB 3160 is on a long list of wildfire legislation this session backed by both parties. However, Republicans have voiced opposition against new taxes this session. Democrats argue they are needed to recoup property tax revenue lost to last year’s wildfires which demolished more than 4,000 homes. 

The bill has drawn support from several environmentalist and progressive groups who say the costs are a lesser evil than leaving wildfire fighting teams unfunded.

“Ten dollars is not a heavy load for Oregonians to bear,” Kelley Beamer, executive director of the Coalition of Oregon Land Trusts, told the House Revenue Committee on Monday. “Especially when it buys assurance against a triage-response to wildfire recovery and invests in the future our communities.”

Taxing insurance policies to fund state wildfire responses is one most Oregonians support, polling shows. Opponents of HB 3160 say it taxes the wrong people.

Critics of the bill take issue with an amendment adding a $25 annual surcharge on policies with premiums of $10,000 or less covering multiple hazards for commercial businesses and farms. Those surcharges go up to $50 per year on properties with annual premiums of more than $10,000.

“The changing fire landscape has proven that these threats are an ‘all Oregon’ problem and deserve an equitable ‘all Oregon’ funding solution,” said Samantha Bayer, a lobbyist with the Oregon Farm Bureau.

Speaking to her colleagues on the House Revenue Committee on Monday, Marsh said the bill aims to tax properties with the “closest relationship” to fire claims by singling out the highest valued insurance policies.

“We know that meeting our fire protection and recovery needs will never be one and done,” Marsh said. “It is time for us to acknowledge our wildfire reality and develop an ongoing, stable source of revenue.”

Some people testifying also expressed confusion over whether the amended bill’s surcharges for policies apply to individual policies per year or whether it is a single fee per insured individual or entity.

Insurance companies and trade groups argued on Monday that those fees on top of the $1,000 minimum fee are unfair in principle to the businesses that pay the lion’s share of property taxes.

Scott Bruun, a lobbyist with Oregon Business and Industry, testified to state lawmakers on Monday the state could afford to raise money elsewhere.

“Wildfires, like COVID and other disasters, affect all of us,” Bruun said. “As such, we believe the cost should be borne by all of us, not relegated to just the group that is required to purchase property and casualty insurance.”

The threat of wildfires in Oregon this year is growing. The U.S. Drought Monitor shows more than half the state is in “Severe” or “Exceptional” drought as of last week. Oregon and Washington saw states of emergencies declared for wildfires last July.

HB 3160 awaits further action from the House Committee on Revenue.

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