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Voters Reject Measure 28, Legislators Hope To Delay Cuts
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Voters Reject Measure 28, Legislators Hope To Delay Cuts

The Salem Statesman Journal (1/29, Law) reports, "Oregon voters soundly defeated a three-year income and corporate tax increase Tuesday, triggering state trooper layoffs and immediate cuts to public schools, colleges and senior and disabled services." The Statesman Journal continues, "'Measure 28 was a short-term fix to a long-term problem,' said Gov. Ted Kulongoski, a Democrat. '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.'" The Statesman Journal adds, "The immediate cuts take place Saturday, under a law passed by the Legislature when it placed Measure 28 on the ballot. ... However, House leaders hope to persuade the Senate and Kulongoski to delay the cuts awhile. They hope to forge a quick agreement to prevent what they call 'lethal cuts.'" The Statesman Journal notes, "Russ Walker, Northwest director of Citizens for a Sound Economy, who opposed Measure 28, said it's time for the Legislature to reprioritize spending. His group wants the state to slash economic development, eliminate the Oregon Cultural Trust and privatize the Oregon Liquor Control Commission, among other ideas."

01/29/2003
Voters Reject Tax Increase
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Voters Reject Tax Increase

BY Jeff Mapes and James Mayer

Summary: Measure 28's demise means cuts in services and keeps intact Oregonians' record of defeating tax proposals Oregon voters on Tuesday rejected a three-year income tax increase, turning aside fears that schools, state police and the needy would be hurt by new budget cuts. The defeat of Measure 28 underscored Oregonians' historic reluctance to approve new taxes of almost any kind. Although voters did agree to raise the cigarette tax last fall, they've never approved a general tax increase of any kind since they adopted the current income-tax system in 1930. In the wake of the defeat, Republican legislators said they'd push to ease the impact of some of the harshest budget cuts, particularly to the mentally ill and the elderly. But Gov. Ted Kulongoski opposes trying to rework the cuts, his spokeswoman Mary Ellen Glynn said Tuesday night. Opponents, who were caught off guard by a rise in support for Measure 28 in recent weeks, were jubilant at its demise. "This is more of a mandate than I thought we'd receive," said Russ Walker of Citizens for a Sound Economy, a pro-business group that opposed the measure. "It really says something about where people's priorities are. . . . They don't buy the line the state is hurting that bad." Supporters said they took comfort that there was a relatively strong vote for the proposed tax increase -- at least compared with many previous tax measures that failed to capture even a third of the voters. "We had great success getting this issue in the forefront," said Kris Kain, president of the Oregon Education Association, the teachers union. "I think it shows people really care about these issues. They disagree, but they really care." Even before the vote, Kulongoski and legislators from both parties had met privately to talk about whether to move away from some of the scheduled cuts if Measure 28 failed. House Speaker Karen Minnis, R-Wood Village, said she particularly wants to look at cuts to mental health care and senior citizen programs that "could absolutely put people out on the street." And Rep. Dan Doyle, R-Salem, is working on a plan that would reduce cuts to the Oregon State Police. Yet Glynn said Kulongoski thinks that "what's done is done" and that the Democratic governor did not want the Legislature bogged down in further debate about what to cut to make up for the failure of Measure 28. "We need to face up to the fact that Oregon is in a recession," Kulongoski said in a statement, "and our tax structure is such that when the economy takes a downturn, state services take a hit." The measure was winning in just four of the 36 counties. It was passing in heavily Democratic Multnomah County, but losing in suburban Clackamas and Washington counties. And the yes margin in Multnomah County was not strong enough to offset the big no vote in the rest of the state. Although the defeat of the proposed tax increase followed a common pattern, the election itself was one of the most unusual in Oregon history. In September, the Legislature referred the proposed three-year tax increase to voters after the recession caused a $2 billion dive in expected revenues for the state's 2001-03 budget. In addition to the Measure 28 income tax increase, lawmakers raised cigarette taxes and delayed an income tax cut. They tapped reserves and used other one-time revenues for $963 million and cut agency budgets by more than $720 million. The referral was a compromise between lawmakers who preferred to impose a temporary tax without sending it to voters and those who wanted to balance the budget with spending cuts. In fact, many legislators who voted to refer the measure to the ballot did so expecting it to fail. Outside the Legislature, the measure's chances were widely derided, but the state's public-employee unions decided they had a chance if they allied themselves with school and social service activists. While opponents largely slumbered, the unions assembled platoons of volunteers who helped wage a campaign that largely flew under the radar. They avoided television, instead using extensive phone banking and carefully targeted radio ads. State agencies, ordered to cut $310 million out of the last five months of the two-year budget cycle, came up with a series of reductions that further spurred the campaign. For example, the Department of Human Services last month sent 63,000 notices to care providers and social-service recipients warning that they faced benefit reductions and cutoffs. Critics complained that the cuts were more harmful than they needed to be, a charge denied by state officials who said they had already made millions of dollars in administrative cuts. By mid-January, a statewide poll showed the measure dead-even in the polls -- the first time in at least two decades that support for a tax hike increased over the course of a campaign. News that the race was close did spark some opposition advertising on radio. And opponents said the relatively heavy turnout for a special election -- it exceeded 60 percent -- showed that both sides were getting their voters to return their ballots. "It takes a lot of pushing from proponents to get the tax measure up," said Portland pollster Tim Hibbitts, "and it doesn't take much for the opponents to push it back down."

01/29/2003
The Rich Are Getting Richer, and So Are the Poor
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Press Release

The Rich Are Getting Richer, and So Are the Poor

© 2002 Copley News Service, 1/28/2003

01/28/2003
If families have to tighten belts, why not Texas?
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Press Release

If families have to tighten belts, why not Texas?

The state's budget shortfall is the proverbial political "hot potato." Republicans now control the governor's mansion, the state Senate and the House for the first time since the 19th century. And they assume this historic role as we are facing a potential $9.9 billion budget shortfall.

01/28/2003
Kyoto Style Cap-and-Trade for the United States?
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Press Release

Kyoto Style Cap-and-Trade for the United States?

January 27, 2003 The Honorable George W. Bush The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President: We are writing to reiterate our concerns about the Administration’s plan to award regulatory offsets ("transferable credits") to companies that reduce emissions of carbon dioxide (CO2) and other greenhouse gases.

01/27/2003
President Bush Names CSE President Paul Beckner to Trade Advisory Group
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Press Release

President Bush Names CSE President Paul Beckner to Trade Advisory Group

On January 15, President Bush named CSE President Paul Beckner to a two-year term on an administration advisory panel on trade. The Advisory Committee for Trade Policy and Negotiations was established in 1974 and consists of 45 representatives from key sectors of the economy. Its purpose is to advise U.S. negotiators as they formulate trade policies and agreements with other nations.

01/27/2003
CSE Joins the Alliance for Digital Progress
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Press Release

CSE Joins the Alliance for Digital Progress

Citizens for a Sound Economy (CSE) today joined with other consumer groups, industry innovators, and think tanks to help launch the Alliance for Digital Progress (ADP). ADP members believe that market based solutions – not government mandates – are the best way to protect digital content in today’s information age. CSE President and CEO Paul Beckner had these comments:

01/27/2003
Tax Vote's Impact Huge - Pass or Fail
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Tax Vote's Impact Huge - Pass or Fail

BY Steve Law

The unthinkable will happen in Oregon come Election Day, no matter how Tuesday's vote turns out for a three-year income tax increase. The measure's defeat, barring a change of heart from lawmakers, will force some seniors and disabled people out of their care homes. State police will be laid off. School children will be sent home for the year in May. But if Measure 28 wins, which seemed implausible a few weeks ago, the election will mark the first time Oregonians voted to raise general taxes since 1930, the early days of the Great Depression. And if recent polls are to be believed, the measure just might pass, sending political ripples across the nation. "If the voters do adopt this in Oregon, I think that will embolden lawmakers in other states to do what they are doing," said Dane Waters, a national authority on ballot measure campaigns. "I really think this will be a trend-setter." In the fall, nobody except true believers gave the measure much chance of passing. Republican legislative LEADERS agreed in September to put the tax increase before voters, but that was largely to end a bruising special legislative session and avoid passing controversial spending cuts right before fall elections. Some Republicans even boasted that they would vote against the measure as they agreed to refer it to voters. As if to seal its defeat, GOP leaders assured that bland explanatory language would accompany the measure on the ballot. "The wording of it is atrocious," said Chuck Bennett, an education lobbyist who has run several statewide campaigns. "I think it was put out there to fail." Early polls showed Measure 28 down by 25 percentage points. History shows that a tax increase must start with a healthy lead in polls to have a chance. Traditionally, support peels away as the campaign heats up. Political analysts said it was a horrible time to persuade voters to raise taxes, with Oregon having the nation's highest jobless rate. Democratic Gov. Ted Kulongoski, a gubernatorial candidate when the measure originated, endorsed it, but it nearly cost him the election. Business and labor groups that might otherwise support the campaign decided to hold onto their wallets. Grass-roots effort Despite the long odds, parents and social-services providers and other supporters wouldn't give up on Measure 28 without a fight. Mike Rosen, a state worker and father of two elementary school students, remembers that only 50 people showed up at a mid-October rally for Measure 28 in Portland's Pioneer Courthouse Square. They stood around and talked about the need to mobilize more people. Vicki Hersen of the group Elders in Action took down everyone's names and agreed to call a later meeting. "It just snowballed from there," said Rosen, who started an unofficial Measure 28 Web site and sent out e-mails to hundreds of education supporters. By mid-November, when public-employee unions committed money to hire campaign staffers, the grass-roots activists already were in motion. Organized groups were working in Portland, Eugene, Pendleton, Medford and Ashland. "There were 250 people at a Pendleton forum on this," said Chuck Sheketoff, human-services advocate and head of a Silverton think tank. "Other than the Round-Up, you tell me what gets 250 people in Pendleton together." Like the recent anti-war demonstration in Portland that attracted 25,000 people, the campaign was largely organized through e-mail. One message from then-Gov. John Kitzhaber went out to thousands of homes, and people forwarded it to their friends. People reported getting the same e-mail from three or four different sources, Rosen said. Unions downplayed their efforts, in part to avoid stirring up conservative and anti-tax opponents. "Early on, we knew that the Yes on 28 people were going to run an underground campaign," said Russ Walker, local leader of Citizens for a Sound Economy. "Politically, it was a wise move." But partly, it was because supporters couldn't mobilize the million-dollar campaign most thought would be needed to be competitive. Campaign spending reports showed that supporters raised closer to half that amount. "By being as low-budget as it is, it's by necessity sort of stealth, below the radar," Bennett said. Opposition napping Critics of Measure 28 initially figured it had no chance and were slow to raise money. "If you gave me 50,000 or 60,000 bucks, it'd get beaten cold," said Don McIntire, co-author of the 1990 property tax limitation that reignited Oregon's tax revolt. But none of Oregon's well-heeled conservative political donors stepped up this time, he said. The Taxpayers Association of Oregon, started by McIntire, relied on bumper stickers, lawn signs and a smattering of radio ads. The Oregon Republican Party mostly stayed on the sidelines until forking over $14,000 for a mass phone-calling campaign late in the effort. Bill Sizemore's Oregon Taxpayers United, battered by a series of legal and political defeats, has been a non-factor. Citizens for a Sound Economy stepped in to fill the void, but Walker's group couldn't match the grass-roots fervor of parents, teachers and social-services advocates. He marveled that campaign supporters did voter outreach to people in nursing homes, who could suffer from the measure's defeat. News stories pivotal Both sides in the campaign say news coverage has helped shift voter sentiment in favor of the measure. When newspaper, radio and television reporters sought to explain Measure 28 to readers, listeners and viewers, they featured students, seniors, disabled people and others affected by likely budget cuts if the measure is defeated. Measure 28 opponents complain that the taxpayers' side was neglected. But stories about senior citizens threatened with eviction were more compelling than stories about people facing a tax increase of $100 or less per year. Middle-income Oregonians will pay around $70 per year if Measure 28 passes, Sheketoff said, and the majority of seniors will pay nothing. "A lot of people wind up voting with their heart instead of their heads," McIntire said. "They see, 'Geez, old people are going to be cast out into the snow.'" Democratic pollster Lisa Grove said the campaign grew competitive because supporters were able to demonstrate the human impact of Measure 28's defeat, down to the local level. Supporters were able to turn it into a school levy-style campaign, where voters know their money will go to services they support, she said. Grove also credits Kulongoski, who, since his election, has stressed fiscally conservative themes. Some say voters have been educated about the reality of state finances after five special sessions last year and continuing news coverage of the state's fiscal crisis. "It's a historic change," Rosen said. "People know now, for the first time in a long time, where their taxes go." New precedent Nobody is calling the race until it's over. But supporters say that even if they come close, it will be historic. Since the 1930 income tax vote, Oregon voters have rejected sales taxes nine times and income tax increases six times. Oregon crawled out of its last major recession in 1982 by temporarily raising income taxes. But that increase was proposed by a Republican governor, Vic Atiyeh, and endorsed by a Democratic Legislature. It never made it to the ballot. Since that time, Oregonians have been much more likely to use the ballot box to cut taxes rather than raise them. The only successful statewide tax increases were for cigarette taxes. Across the nation, 27 states increased taxes in 2002 to deal with budget problems. But none was approved at the ballot box except for tobacco taxes. If Oregonians vote to raise the income tax Tuesday, "that would be the first general statewide tax increase in a long time" to come from voters anywhere in the country, said Mandy Rafool, a tax specialist for the National Conference of State Legislatures. If Measure 28 passes, it would represent a redemption of sorts for Kitzhaber. The once-popular governor expended much of his political capital holding out for a three-year income tax increase during last year's special legislative sessions. He aroused the ire of Republicans by vetoing their alternate plans, practically forcing the income tax measure onto the ballot. Even if Measure 28 is defeated, its comeback in the polls could shift the political terrain in Oregon after more than a decade of tax cuts. "If they get close," Bennett said, "I think anyone who says the public is opposed to tax measures has to make a much stronger case."

01/27/2003
Think Tanks Wrap-Up 2
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Think Tanks Wrap-Up 2

BY Stephen Seitz

The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the second of two wrap-ups for January 27.

01/27/2003
In Brief
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In Brief

BUSH TAPS HOFFA: President Bush, facing a lawsuit filed by the AFL-CIO, has announced he will appoint Teamsters Union president James Hoffa to serve on a key, high-level trade committee that gives advice on objectives and bargaining positions before entering into trade negotiations. Paul Norman Beckner, president and chief executive officer of Citizens for a Sound Economy, was also named to the Committee on Trade Policy & Negotiations. "There's a possibility the suit will be withdrawn since the announcement [that] Hoffa will be appointed," an AFL-CIO spokeswoman said. The Bush administration omitted labor, environmental and conservation representatives in an initial list of 32 appointees it released in late December. In response to the omissions, the AFL-CIO filed a lawsuit against Bush and U.S. Trade Representative Robert Zoellick in federal court last month, requesting a court order to direct the USTR and White House to include representatives. One textile and three apparel executives have also been named. THIRD TIME'S A CHARM: Cradle Holdings, a budding miniconglomerate which earlier acquired the Erno Lazlo and Penhaligon's beauty brands, has purchased l'Artisan Parfumeur, a Paris-based fragrance house founded by Jean Laporte and now led by directeur general Marie Dupont. L'Artisan markets about 30 fragrance brands and environmental scents with distribution centered in France and the U.K. with five freestanding stores. The products are merchandised in select locations in 20 countries, generating a global volume estimated by industry sources at roughly $ 20 million. Although the purchase price was not disclosed, sources speculate that the deal was worth $ 10 million to $ 15 million. CONE MILLS CREDITWATCH: Standard & Poor's Ratings Services on Friday placed Cone Mills Corp. on its CreditWatch list with negative implications. As a result, S&P now rates both the Greensboro, N.C.-based mill's long-term corporate credit and its senior secured debt at "CCC-plus" with a negative outlook. Previously, long-term credit was rated "CCC-plus/developing," and senior debt "CCC-plus." As of Sept. 29, Cone Mills had about $ 155.2 million in outstanding debt. S&P said the move reflects Cone Mills' plan to initiate an offer exchanging an equal principal amount of its new notes for any and all of its $ 100 million notes due March 15, 2005. The bondholders will be asked to extend maturities and make other modifications to their agreements. Although the proposed terms were not publicly disclosed, S&P expects that Cone Mills may not be able to meet all of its obligations, as originally promised under the note issue, and fund its Mexican expansion strategy at the same time.

01/27/2003

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