Oregon Voters Reject Tax Hike, Face Cuts

 

Oregon voters have rejected a ballot measure that would have raised their taxes for the next three years to head off planned cuts to education, law enforcement and other state programs. The measure failed by a margin of 55 percent to 45 percent, according to news media projections with more than 80 percent of the ballots counted Tuesday night.

The vote means that state agencies will begin cutting $310 million from programs already identified by the state legislature unless lawmakers and the governor agree to reopen the battle to look for alternatives, something some lawmakers said was unlikely.

"There is no magic bullet to save us,'' said House Democratic Leader Deborah Kafoury of Portland. ``We're looking at tough times.''

Governor Ted Kulongoski, a Democrat and Senate President Peter Courtney, also a Democrat, have said they don't intend to reopen the issue and instead will focus on the next two-year budget cycle that begins in July.

"Measure 28 was a short-term fix to a long-term problem. We need to face up to the fact that Oregon is in a recession and our tax structure is such that when the economy takes a downturn, state services take a hit," Kulongoski said in a statement. "... I will not ask the citizens of Oregon to raise taxes for the General Fund in this biennium. I have also said that government must live within its means. " I look forward to working with the legislature and the citizens of Oregon to pass a balanced budget very soon," the governor said.

Republicans who control the state House already are working on an ``emergency care package'' to soften the blow, said Majority Leader Tim Knopp of Bend.

``I don't think Oregonians voted tonight to cut seniors and throw them out on the streets,'' Knopp said.

Oregonians will see the results of the vote immediately in some areas. Multnomah County, which includes Portland, will release 114 inmates from county prisons today to cover a $1 million shortfall, said Sheriff Bernie Guisto. Nearly 130 state troopers also face layoffs, according to the Oregon State Police.

School districts across the state have said they will cut days from the current school year due to $95 million in planned cuts to K-12 education programs. Human services programs face cuts totaling $90 million and tuition hikes are likely at state universities to cover $27 million in cuts to higher education programs. Community colleges face $14 million in cuts.

Closer Than Expected

The state legislature decided last September to let voters decide whether to raise taxes or cut services after failing to resolve a budget impasse during five special legislative sessions.

The state's budget has taken a hit during the last two years as the economic slump has depressed income taxes receipts. Oregon does not have a sales tax so more than 80 percent of the state's discretionary spending is funded by individual and corporate income taxes.

If it had passed, the measure would have raised the top personal income tax rate to 9.5 percent from 9 percent for the next three years. The cost to the average taxpayer would have been $114 for the 2002 tax year, according to the Oregon Secretary of State's Office.

The measure would have raised taxes on corporations to 6.93 percent from 6.6 percent for the next three years before both the individual and corporate tax rates would have reverted to current levels in 2005.

Few observers gave the tax proposal much of a chance when it was first proposed in the fall. Early polls showed opponents with as much as a 25 percentage point advantage and the state had not enacted a general tax increase since 1982.

Supporters, led by public employees unions, launched a grassroots campaign to persuade likely voters that the proposed cuts would be devastating and newspapers across the state ran stories about planned closings of mental health wards, prisoner releases and other affects.

A statewide poll released on Jan. 20 by KATU television in Portland showed that the vote on the measure, known as Measure 28, was too close to call. 

 
X

Related Stories

    • Stateline Story
    July 23, 2013
    Tax Revenue Swings, Federal Uncertainty Roil State Budget Planning image description

    ANCHORAGE, Alaska — Budgeting at the state level was difficult during the Great Recession. It’s even harder in some ways now that the recovery is underway. Here’s what state budget officers heard at their annual meeting in Alaska Monday. more

    • Stateline Story
    May 28, 2010
    image description

    TODAY'S TAKE: Oregonians made headlines in January when they approved $727 million in tax hikes on corporations and the wealthy. Supporters said the move was necessary to avoid perilous budget cuts to schools. But this week, Oregon fiscal analysts dropped a new bombshell on lawmakers and voters alike: Due to weak income tax collections, a fresh, $563 million hole has opened in the budget, and deep education cuts are likely.
    more

    • Stateline Story
    May 19, 2010
    image description

    TODAY'S TAKE: Voters in Oregon and Pennsylvania chose their major-party candidates for governor on Tuesday (May 18), while Arizona's electorate handed Governor Jan Brewer a significant victory by approving a temporary hike in the state sales tax. Paradoxically, the outcome in Arizona marked the second time this year - a year in which the Tea Party has become a potent political force - that a state's voters have opted for higher taxes.
    more

    • Stateline Story
    April 2, 2010
    image description

    Term-limited Oregon Governor Ted Kulogonski used his final state of the state speech to look back on his eight years in office - a period, he noted, that covered not one but two recessions. But Kulongoski, a Democrat, also April 2 called on lawmakers to take a longer view of the state's finances and make decisions to avoid what he called a "budgetary cliff" caused by the end of federal stimulus dollars and the exhaustion of the state's rainy day fund. more

    • Stateline Story
    October 25, 1999
    image description

    Reporters from eight Western states identified tax policy, education funding, health care reforms and apportionment of the states' tobacco settlement funds as the most pressing issues likely to be addressed by their states in the next legislative year. Over 50 journalists from Arizona, Idaho, Montana, Nevada, Oregon, Utah, Washington and Wyoming repeatedly mentioned those topics during a recent statehouse reporters' conference in Boise, Idaho. more

PCS.PRODUCTION.1.20140221.1210 (PEWATLVMWAPP01)