[5]
By Oregon Business & Industry [6],
July 14, 2026 – Today, Oregon Business & Industry (OBI), the National Federation of Independent Business, Inc. [7] (NFIB) and the Portland Metro Chamber [8] (PMC) filed a suit in Oregon Tax Court challenging the constitutionality of a revenue-raising bill passed by the state Legislature in 2026 and signed by the governor (go here [9] to read the complaint). The underlying substance of HB 4027 [10] is not at issue. At issue is the Legislature’s passage of the bill in violation of the Oregon Constitution, which not only renders this bill improper, but also carries significant implications for future revenue-raising measures.
HB 4027 authorizes the director of the Department of Consumer and Business Services (DCBS) to raise new revenue from both employers and employees. That revenue is designated for a new fund, the BOLI Expenses Fund, to support agency operations and new positions. The new tax will be added to the existing Worker Benefit Fund (WBF) withholding, though money does not go to the WBF — it goes to general BOLI operations. In other words, DCBS sets a new tax (and can raise it in the future) and the Department of Revenue (DOR) collects a new tax all for general operations at another agency (BOLI). That the new tax is hitched to an existing withholding does not negate the fact that this is a new revenue-raising scheme.
At issue is not the fund, its purpose or even the source. Rather, it is that the Legislature failed to meet the constitutionally required threshold to pass revenue-raising bills, something brought to their attention during the 2026 session.
In the 1990s, the Legislature, via referral, asked voters to vote on a measure that established a three-fifths threshold – in both chambers – for legislative passage of revenue-raising measures. Voters approved that referral and amended the Constitution with this now decades-old requirement.
Despite that requirement, HB 4027 advanced through the Legislature without reaching the three-fifths threshold in the House of Representatives (it received only 33 of the required 36 votes).
Process matters. Simply delegating rate-setting to a director or hitching new revenue-raising plans to existing taxes does not negate the obligation before the Legislature.
Employees and employers cannot stand by while process is violated. If we are to have a state Constitution, then it and its provisions must mean something.