Oregon voters reject tax increase

Oregon voters Tuesday turned back a proposed $800 million tax increase that was passed last year by state legislators, which bodes well for opponents of tax increases in several other states, including New Hampshire, Ohio and Nevada.

Voters rejected the measure by a 3-2 margin, spurning lawmakers call for more funding for public schools and social services agencies. The tax package’s failure automatically triggers $544 million in spending cuts on May 1.

“It is now up to local school boards to figure out what to do,” said Gene Evans, a spokesman for the Oregon Department of Education.

When voters last year turned back a different tax increase, about half of the state’s 199 school districts opted to shorten the academic year rather than to lay off teachers, which was another option.

“We say that the state does three things: educate, medicate and incarcerate,” Mr. Evans said. “And this will fall on schools, health services and the jails.”

A household with the state’s median $41,000 annual income and filing a joint return would have paid about $36 a year more in taxes.

Foes of the tax increase — headed by the state chapter of Citizens for a Sound Economy — battled a coalition of its supporters, including the AARP, state and local Democratic groups, Planned Parenthood Advocates of Oregon, numerous other social service agencies and the AFL-CIO.

An equally vigorous constituency of senior citizens, Republicans and independent voters turned back the tax increase.

“We got our message out and people know that many of the horror stories they were hearing about the impact of refusing the tax plan were just stories,” said Russ Walker, Oregon director of Citizens for a Sound Economy. “But whatever party you belong to, there is a general sentiment that government doesn’t do a very good job at spending money.”

Citizens for a Sound Economy was also behind last year’s voter rejection in Alabama of a $1.2 billion tax increase, advocated by Republican Gov. Bob Riley.

In Nevada, antitax advocates have taken their case to the U.S. Supreme Court, challenging a lower state court decision that ruled a simple majority was enough to put in place a $833 million tax increase. Foes of the increase, who are now threatening to put the increase to a vote in November, contend that a voter-approved supermajority was needed to pass a tax increase in accordance with the state constitution.

“The argument has always been made that if these [tax increases] are not allowed, the police department and the firehouse are the first to go,” said John Eastman, director of the Claremont Institute Center for Constitutional Jurisprudence, who is representing disgruntled state legislators. “But the truth is that benefits, pensions and other things are out of control and taxpayers are saying ‘cut the fat.’ “

Groups such as Citizens for a Sound Economy are partisan and effective, said Neel Pender, executive director of the Democratic Party of Oregon, but “legislators in almost every state were faced with some kind of budget dilemma, and to undermine and restart this process seems like an enormous waste of taxpayers’ money.”

But these battles will continue, promised Nevada state Assemblyman Bob Beers, a Republican who opposed his state’s tax increase.

“There is a philosophy at the heart of all this, one that says the government is well-funded enough,” Mr. Beers said.