Eight years ago, corporations and public sector unions clashed when a tax increase for large corporations was proposed in the state of Oregon.

The tax increase proposed in House Bill 97 in 2016 led to the most expensive ballot fight in state history. Both sides had to raise more than $42 million combined. In the end, corporate interests won: the bill was defeated.

This year, Oregon voters will consider a similar tax idea in the form of Measure 118, which also promises to put money back into their own pockets. But business and labor are no longer separate.

Instead, many of the state’s most active political groups – and a growing number of politicians from both parties – have spoken out against Measure 118.

This week, the board of the United Food and Commercial Workers Local 555, which represents tens of thousands of grocery workers across the state, voted against the idea, joining the Service Employees International Union Local 503 and the Oregon Education Association, whose boards both voiced their opposition earlier this month over concerns the measure could blow a hole in the state budget.

Meanwhile, business interests from across the country have pumped nearly $6 million into a campaign committee fighting the measure.

In most elections, such opposition would go a long way toward defeating a ballot proposal. But with Measure 118, known as the “Oregon rebate,” it might not be so simple.

The measure would impose a 3% tax on all Oregon business sales over $25 million and then divide the money raised among Oregon’s more than 4 million residents, regardless of age. A recent analysis by state revenue officials suggests the policy would raise more than $6.5 billion a year in additional corporate taxes and give every state resident about $1,600 a year starting in 2026 – either through tax credits or direct payments.

That number is far from certain, but it should be a strong selling point for supporters of Measure 118. The proposal is a scaled-down version of “universal basic income,” the idea of ​​alleviating poverty by making unconditional payments to citizens. It would put Oregon on par with Alaska, which pays its residents an annual “dividend” based on revenue from the state’s oil production.

Supporters of Measure 118 may have a lot of money to spread their message of easing the financial worries of Oregonians.

Josh Jones, a Southern California billionaire who, according to his LinkedIn profile, “likes universal basic income,” has so far donated $480,000 to the measure. Two other donors with California addresses, financier Alexander Tamas and Gisele Huff, president of the Gerald Huff Fund for Humanity, have given a combined $123,000.

Almost all of the money was spent collecting signatures to put House Bill 118 on the ballot, but the message is clear: donors with deep pockets and a desire to explore the prospect of unconditional payments to improve people’s lives are interested in Oregon.

“We’re playing to win,” said Antonio Gisbert, a Portland resident and lead signatory of the ballot proposal. “Ultimately, we believe Oregon voters will see the value of Measure 118. It’s one thing to have big corporations tell you this rebate is going to be bad for you. I’m not sure people will believe that.”

In fact, the origins of the rebate proposal lie partly in the controversy over Measure 97. This is clear from the tax mechanism itself: Measure 97 would have imposed a 2.5% tax on corporate sales in Oregon over $25 million, while this year’s proposal increases that to 3%.

In 2016, Gisbert was an organizer with Oregon AFSCME, a union that represents government workers. He liked the core idea of ​​Measure 97 — taxing big corporations, which Gisbert said too often pay ridiculously little in taxes, to pour about $3 billion annually into strengthening services like education and health care.

When the measure failed by nearly 20 percentage points, Gisbert and some friends began to think of new ways to sell a corporate tax increase on voters, arguing that Oregonians were put off by the idea of ​​handing billions to a state government they didn’t trust to spend them wisely.

“We looked around and said, ‘Well, what can we build on? Let’s not reinvent the wheel and create a whole new tax,'” Gisbert said. “Then, of course, we had the big idea: OK, let’s use this money to get every Oregonian a refund.”

The Measure 118 campaign hopes to sell Oregonians on its vision of fairly taxing big business to increase prosperity, including dramatically reducing child poverty and virtually eliminating state taxes on low-income Oregonians.

According to the state’s Legislative Revenue Office, the measure would “significantly reduce or eliminate” income tax liability for Oregonians earning less than $40,000 a year. In total, these people would no longer pay $458 million a year to the state as part of the tax refund, but would receive $550 million back, the office said.

All of these results seem to align with the goals of the state’s major unions, which tirelessly preach policies that can help low-income people. But Gisbert’s most powerful allies in the fight over Measure 97 are preparing to oppose him.

Three of the state’s four largest unions have already spoken out against Measure 118. The remaining holdout – Oregon AFSCME, where Gisbert used to work – has simply not held a vote yet.

“There are so many questions about how it’s written and how it’s interpreted,” Joe Baessler, executive director of Oregon AFSCME, said in a recent interview with OPB. “It just makes us super nervous.”

It’s not that unions are suddenly opposed to higher corporate taxes. They are mostly concerned about recent evidence that Measure 118 could end up inadvertently draining the state budget – money their members depend on.

The reason lies in the way Oregon taxes businesses. Under the tax law, many large companies must pay taxes as a percentage of their taxable income or a “minimum corporate tax” based on their Oregon sales, whichever is greater.

Measure 118 would increase the amount large corporations owe under the minimum tax and would result in more corporations paying far more taxes this way, an estimated $13.6 billion in the 2025-2027 budget cycle.

But according to the lawmakers’ lawyers, the measure would also mean the state would receive less money through the other part of its corporate tax law, which is based on taxable income. And according to the lawmakers’ lawyers, there is nothing in the measure that gives the state a way to recoup that loss.

Under this interpretation of the law, the state would receive approximately $13.6 billion in 2025-2027 revenue, all of which would be collected through the new tax, but would lose over $1 billion in corporate taxes that would normally have gone into the general treasury.

The threat of a budget cut has become a major concern for workers and politicians, with the four most influential Democrats in the House releasing a joint statement last week outlining their objections.

“In these tough times, we all want working families to get all the relief they can get, but Measure 118 is not the answer,” the Democrats said. “We have grave concerns that it will slow job growth and lead to cuts to essential services like road maintenance, firefighting and addiction services.”

In total, almost 50 state legislators oppose the measure, according to the No on 118 campaign. Two congressmen, Governor Tina Kotek and Finance Minister Tobias Read, have also spoken out against it.

Gisbert said his campaign disagrees with the legal analysis that suggests his measure would have budgetary implications. But if that interpretation ultimately prevails, he is prepared to help lawmakers revise the measure’s language after it passes to ensure it is revenue-neutral. (That could reduce the amount Oregonians can expect in annual reimbursement to $1,400 or less.)

“We can all sit down together and implement this matter correctly and fairly, as it was intended,” said Gisbert. “Our goal is to keep the state intact.”

That won’t appease many opponents. Oregon Business & Industry, the state’s largest business group, has led the most vigorous campaign against Measure 118 so far.

A website set up by the group argues that higher business costs would lead to a rise in the prices of goods and services. This conclusion is shared by government analysts, who concluded that this could lead to a price increase of 1.3 percent by 2030.

“It’s a tax on sales – not profits,” the website says. “That means Oregon businesses would be forced to pay this new $6.8 billion tax whether they make a big profit, a small profit, or losses.”

Whether unions will jump in with their own opposition campaign remains to be seen, says Melissa Unger, executive director of SEIU Local 503. If they do, their arguments will likely differ from those of business.

“This is a group of people from outside who want to work with Oregon to see what’s possible on a national level,” Unger said. “We’re not just a playground for ballot measures.”

Gisbert, facing resistance from his old allies, says he does not take it personally.

“We can still be friends,” he said. “At the end of the day, I wouldn’t be doing this work if I didn’t believe that the Oregon Rebate benefits every person in Oregon. Whether you’re a union member or not, you’re going to get that $1,600.”