PORTLAND — Oregon Congressman Greg Walden's office says a new version of the Republican tax overhaul before Congress will preserve some key tax deductions that Oregonians rely on, including a major provision that would allow the state's residents to continue deducting a portion of their state income tax.

Compared with the tax plans that originally passed the House and the Senate, that change alone could be worth hundreds of millions of dollars to Oregonians. Some Oregonians still may pay higher federal taxes under the new plan than they would under current tax rules.

The tax bills originally passed by the House and Senate would have eliminated deductions for state income taxes. Those deductions are especially important to Oregonians, because the state has an unusually high income tax to compensate for the lack of a state sales tax.

Oregonians deducted $8.5 billion in state and local taxes in 2015, the most recent year for which data is available. Eliminating the income tax deduction could have cost Oregonians hundreds of millions of dollars, which would have partially or completely offset tax cuts in other parts of the bill for the state's residents, according to tax experts.

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Justin Discigil, Walden's communications director, said the Republican congressman has been working with members of the conference committee, which is reconciling the House and Senate versions. He said Walden pushed them to retain local tax deductions and other provisions of the tax code that many Oregonians favor.

"While we have not seen the actual bill text yet, it is our understanding that some of the changes he has been pushing for have been worked into the final agreement," Discigil said in an email.

The House and Senate bills allowed taxpayers to deduct up to $10,000 in local property taxes from their federal taxes. Discigil said Walden's understanding is that a revised version of the bill emerging from conference committee would allow deductions of both property and income taxes, combined, up to that limit.

"While we do not want to rush to judgment - and analyze what is only a partial review of what we believe the final plan will include - Rep. Walden is encouraged that the bill will incorporate some of the improvements he has worked to include," Discigil said.

Additionally, Discigil said Walden believes the bill emerging from House and Senate negotiators makes other changes the congressman had sought. Those include:
Preserving tax-exempt private activity bonds, which had been eliminated in the first House bill. State and local governments use the bonds to finance affordable housing and other public projects, including roads. Housing advocates had warned that losing the bonds would exacerbate Oregon's housing crisis.

Eliminating an alternative minimum corporate tax that was included in prior versions of the tax legislation. Congress is planning to cut the corporate tax rate from 35 percent to 21 percent, but an alternative minimum tax could have reduced the tax savings Intel, Nike and other large companies anticipated.

Other reports indicate the new bill would eliminate a proposed tax on graduate students, which had greatly concerned Oregon's universities.

"Rep. Walden is focusing on the impact of this bill for the middle-class family in his district, where the median household income is $49,000," Discigil wrote. "Those families will see a significant tax break under our plan, and that has been Rep. Walden's goal from the beginning."

Walden represents the sprawling 2nd Congressional District, 20 counties in central, southern and eastern Oregon.

The tax overhaul bills passed the House and Senate without a single Democratic vote in either chamber, so the Republican majorities are steering the process themselves.

Walden is among the most influential Republicans in the House, chairing the powerful Committee on Energy and Commerce Committee. He's the only Republican from Oregon in Congress.

Democrats, including Gov. Kate Brown and the rest of the state's congressional delegation, remain firmly opposed to the tax overhaul. They argue that it would disproportionately benefit wealthy Americans, increase the federal deficit and reduce funds available for social programs.

Allowing deductions for state income taxes would be valuable for many Oregonians, but the $10,000 limit on income and property taxes could still hit some taxpayers. Reports indicate Republicans are planning to lower the top federal tax rate to preserve savings for the wealthiest taxpayers.

Some middle-income taxpayers would no longer itemize their taxes under the new legislation because the overhaul would nearly double the standard deduction taxpayers can take, to $24,000 for couples. Those savings would be partially offset by the loss of the personal exemption and other deductions.

The congressional tax overhaul appears on track for passage in the House. But in the Senate, where Republicans have just a two-vote majority, party leaders are still trying to lock down votes to ensure approval.