Oregon Votes on Tax Hike as States Set Ballot Fights
By Kathleen Murphy, Staff Writer
Last year, Oregon was the butt of jokes for having to cut short its school year 17 days or run out of money. Tuesday, Oregon faces much the same situation: tax or face the consequences.
Tax-averse Oregon voterswho cast their ballots by mail--are being asked to accept or reject an $800 million income tax increase. The special election comes after voters already rejected a tax hike on the ballot a year ago and then second-guessed the legislature's wisdom by blocking its attempt to raise taxes and gathering signatures to force a statewide vote. [See Stateline.org, Jan. 29, 2003, Oregon voters reject tax hike, face cuts].
Opponents, backed by national anti-tax groups that helped sink Alabama's proposed tax increase last fall, say the plan will cost Oregon jobs and hurt its economy, while backers predict citizens want to do their part to soothe the sting of state budget cuts.
Oregon's referendum is among the first batch of statewide ballot measures this election year. More referenda follow next month -- on the same day that Georgians and Californians pick a Democratic nominee for president, they also will decide ballot questions with consequences for state flags and budgets.
Georgians will choose March 2 between a red-and-white striped state flag that began flying in 2003 and its predecessor, a blue-and-gold flag. Backers of a 1956 flag with the Confederate battle emblem that flew until 2001 were unable to find a legislative sponsor to put that flag on the ballot.
On the same day, California voters will consider two measures to raise bonds and require a balanced budget that are being pushed by Gov. Arnold Schwarzenegger to patch up the state's dire financial situation. [See Stateline.org, Jan. 14, California budget fix hinges on twin ballot issues.]
North Dakota voters will decide June 8 whether to let the Republican-controlled legislature decide how fiscal impact statements are created. Another North Dakota ballot measure would let companies sell more stock without shareholder approval.
In several states, signatures are still being gathered to get measures on the November general election ballot, but initiatives in a handful of states have qualified already. Click here for a list of 2004 statewide ballot measures.
In Oregon, tax increase supporters said the price of failure on Measure 30 is high: 55,000 low-income people would lose health insurance, class sizes would increase and the school year might be cut short again.
"Many school districts will have to cut teachers or cut days. We'll be back in Doonesbury," said Andi Jordan, Oregon PTA vice president, referring to cartoonist Garry Trudeau's caricature of last year's severe budget cuts that gave Oregon students an early start on their summer vacation. PTA is part of the Yes on 30 coalition.
Measure 30's tax hike would raise corporate minimum taxes, decrease seniors' medical deductions, and reduce the discount for early payment of property taxes. The state has no sales tax, so corporate and individual income taxes are the bulk of the state's revenue. If it passes, a middle-income Oregonian would pay about $81 more taxes a year, according to an analysis by the Oregon Center for Public Policy. Measure 30 also extends the 10-cent per pack cigarette tax through 2005.
National anti-tax groups such as Citizens for a Sound Economy led by U.S. House Majority Leader Dick Armey (R-Texas)-- that also fought against Alabama's unsuccessful tax referendum -- are working against Oregon's Measure 30.
Measure 30's failure would mean cuts of $299 million for schools, $58 million for public safety and $188 million from the Oregon health plan, according to state data.
But to the Libertarian Party and other Oregonians more leery of tax increases, Measure 30 excuses legislators and the governor from cutting waste and unnecessary programs. Anti-tax groups contend Oregon's economic downturn, which has lasted longer than the nation's, would only worsen.
The U.S. unemployment rate in December was 5.7 percent, well below Oregon's 7.2 percent posting.
"You don't fix unemployment by taxing the employer and the unemployed. Our big focus has been eliminating vacant state employee positions," said Jason Williams, executive director of the Taxpayer Association of Oregon, part of the Stop Oregon Tax coalition.
No recent polls on Measure 30 have been made public, but a December poll by Moore Information, a public opinion research firm in Portland, showed 49 percent of Oregon voters opposed the tax plan, 38 percent favored it, and the rest were undecided.
A dozen Oregon newspapers have endorsed the increase. "No matter what you hear, Oregon has no realistic Plan B' if this tax measure fails," The Oregonian editorialized in support of the tax increase.
Gov. Ted Kulongoski (D) supports Measure 30, and said in a statement, "Unfortunately, forces which spearheaded the effort to put this on the ballot would have working Oregonians pay more and big corporations pay less."
Kulongoski spokeswoman Marian Hammond said the governor has publicly promoted the tax increase at least a dozen times since November and visited a union-run phone bank on Jan. 27. But The Register-Guard (Eugene) dubbed him "Gov. Eeyore," like the quiet, gloomy donkey in Winnie the Pooh, for not being more vocal.
"Kulongoski so far has been downright wimpish in his support for Measure 30," the editorial said.