Oregon Estate Tax Initiative: A Step Towards Elimination

Overview

In a significant development for Oregon taxpayers, a ballot initiative aimed at abolishing the state’s estate tax, known as Initiative Petition 51, has gained momentum. Led by state Sen. Kevin Mannix, proponents of this initiative are preparing to gather the essential signatures for it to qualify for the November 2026 ballot. The estate tax, which generated $423 million in the last budget year, is now at the center of financial discussions as state lawmakers grapple with potential cuts in federal revenue for essential services like Medicaid and food assistance.

The Growing Budget Concern

Federal Revenue Reductions

Oregon’s financial landscape is complicated by looming reductions in federal funding, estimated to reach $15.1 billion for the budget biennium between 2025-27 and 2029-31. A significant portion of these cuts—about 95%—will impact low-income residents through programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP).

House Speaker Julie Fahey, a Democrat from Eugene, expressed deep concerns on October 3, stating, “Donald Trump’s funding cuts and health care policies are putting Oregon on the road to disaster.” This sentiment underscores the urgency for lawmakers to explore alternative revenue sources, particularly as the estate tax has become a focal point.

Details on the Estate Tax

Tax Structure and Implications

Oregon’s estate tax is notably stringent, applicable to estates valued at $1 million or more, making it the lowest threshold among U.S. states that impose such a tax. The rates begin at 10% for estates over this threshold and escalate to 16% for estates valued beyond $9.5 million. The tax generated a robust $423 million in the 2024-25 budget year, an increase from $339 million the previous year.

Legislative Landscape

Sen. Kevin Mannix, a co-chief petitioner for Initiative Petition 51, has long campaigned for the elimination of Oregon’s estate tax. His previous attempt in 2012, Measure 84, aimed to phase out the tax over four years but ultimately failed, garnering only 46% of the vote. Recently, Mannix achieved a partial victory with a 2023 bill that provides an exemption for natural resource properties worth up to $15 million.

While many Republicans and business groups advocate for raising the estate tax threshold or abolishing the tax altogether, progressive organizations like Tax Fairness Oregon consistently oppose such changes.

Ballot Initiative Steps

On September 30, Oregon Secretary of State Tobias Read certified the ballot title for Initiative Petition 51, which states, “Nullifies estate tax, which applies to estates of $1 million plus; prohibits similar local taxes.” Proponents, however, have raised concerns that this phrasing could mislead voters about the initiative’s scope. The deadline for any appeals regarding the certified ballot title is October 14.

To successfully bring this initiative to voters, the campaign must collect 117,173 valid signatures from Oregon residents by a specified deadline.

Conclusion

The push to eliminate Oregon’s estate tax is gaining traction amid rising concerns about federal funding cuts and their potential impact on essential services. As state lawmakers navigate a complex financial landscape, Initiative Petition 51 represents a contentious and pivotal moment in Oregon’s tax policy. With signatures required to appear on the November 2026 ballot, the outcome could significantly reshape the state’s revenue structure and financial future.

In summary, as Oregon faces critical budgetary challenges, the fate of the estate tax hinges on public sentiment, legislative complexities, and the actions of dedicated advocates like Sen. Mannix. This initiative reflects broader questions of fiscal responsibility and support for low-income Oregonians during a turbulent economic period.