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Newspaper Article

    Spending limit, tax cut would reduce Oregon spending

    BY Brad Cain (AP)
    11/07/2006
    by Brad Cain (AP) on 11/7/06.

    Oregon voters weighed two measures Tuesday that would have a great impact on the state's finances.

    Measure 48 would place a tough new limit on spending by the state government. And Measure 41 would reduce state income taxes by giving Oregonians the same personal income tax deductions as on their federal returns.

    Backers of the measures said they would impose fiscal restraint on government and reduce the tax burden on Oregonians. But a coalition representing unions, education boosters and business groups said the measures would force deep cuts in schools, public safety and health care services.

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    The campaign in favor of the Measure 48 spending limit was financed by more than $1 million from out-of-state groups associated with libertarian Howard Rich, a New York real estate mogul, who said the limit would force state lawmakers to be more frugal with taxpayers' dollars.

    They also said Measure 48 would allow for reasonable budget increases tied to inflation and population growth.

    But critics cited estimates by state budget analysts who said that if the spending limit was adopted by voters, the state will be unable to use about $2.2 billion, or 6 percent, of state revenue resources that are expected to be available in the next two years.

    The Measure 41 tax cut was drafted by anti-tax activist Bill Sizemore but promoted by the Washington, D.C., group FreedomWorks. It would reduce state income taxes for most households by about $140 a person by giving Oregonians the option to take the same personal income tax deductions as on their federal returns.

    Opponents, however, say Measure 41 would hurt the people it was supposed to help by removing $400 million a year from the state budget, making it tougher to pay for Oregon's schools and health and public safety programs that Oregonians count on.