Opinion ID: 1129212
Heading Depth: 1
Heading Rank: 5

Heading: the free exercise issue

Text: Rogue Valley and its amici contend that application of unemployment compensation taxes to all religious organizations could create a serious chilling effect on an organization's free exercise of religion. We do not believe this fear is well-founded. To determine whether a governmental action impinges upon the free exercise of religion it is first necessary to test the governmental action against the Oregon constitutional provisions protecting religious expression. In a line of cases beginning with City of Portland v. Thornton, 174 Or. 508, 512, 149 P.2d 972 (1944), this court has treated the First Amendment Free Exercise clause as identical in meaning with the Oregon constitutional provisions covering the same subject. A more recent case has held, however, that identity of `meaning'    does not imply    that verbal formulas developed by the United States Supreme Court in applying the federal text also govern application of the state's comparable clauses. Cooper v. Eugene School Dist. No. 4J, supra, 301 Or. at 369, 723 P.2d 298. Cooper went on to uphold a statute prohibiting public school teachers from wearing overtly religious clothing while performing their duties, finding a strong state constitutional policy of neutrality toward all religions. Our ruling today comports with this policy. Under our ruling all Oregon religious organizations will be treated similarly by subjecting them to the unemployment payroll tax. Of course equal treatment is not the only interest that is protected by the right of free exercise of religion. The State is also prohibited from interfering with any individual's or group's right to worship or exercise of religious opinion or rights of conscience under Article I, section 2 and 3. It is in this context that Rogue Valley and its amici contend that requiring them to submit to the unemployment payroll tax and all its attendant regulation would excessively burden  chill, to use their term  the free exercise of religion. This is a concern that we think is met in this case by the formula used in connection with the First Amendment. When governmental action is challenged as a violation of the Free Exercise Clause of the First Amendment it must first be shown that the governmental action imposes a burden on the party's religion. United States v. Lee, 455 U.S. 252, 256-57, 102 S.Ct. 1051, 1054-55, 71 L.Ed.2d 127, 132 (1982). Assuming that imposing unemployment payroll taxes on all religious organizations will burden at least some of those groups, (although not necessarily their freedom of belief or worship), that assumption is only the beginning, however, and not the end of the inquiry. Not all burdens on religious liberty are unconstitutional.    The state may justify a limitation on religion by showing that it is essential to accomplish an overriding governmental interest. 455 U.S. at 257, 102 S.Ct. at 1055, 71 L.Ed.2d at 132. In the present case the State of Oregon has two governmental interests [6] which, when taken together, are sufficiently important to support the burden on religion represented by unemployment payroll taxes. There are few governmental tasks as important as providing for the economic security of its citizens. A strong unemployment compensation system plays a significant role in providing this security. Given the existence of FUTA, any state's unemployment tax must, as a practical matter, comply with FUTA's requirements or the state's employers would face a double tax. Such a double tax would, in turn, create a very undesirable business climate in the state. This, combined with Oregon's constitutional interest in treating all religious organizations equally, creates an overriding state interest in applying the unemployment payroll taxes to all religious organizations. Our construction of the coverage of Oregon's unemployment compensation taxation scheme does not offend the First Amendment's Free Exercise Clause or Article I, section 3 of the Oregon Constitution.