Measure 30 seen as test of nationwide antitax drive

WASHINGTON — On its face, ballot Measure 30 is a matter strictly about Oregon for Oregonians to decide. But as voters choose between higher taxes or millions in spending cuts, the outcome could reverberate across the nation.

Oregon has emerged as the latest proving ground for national antitax groups that have set their sights on state capitals after gaining clout in Washington under Republican control of the White House and Congress.

Antitax groups have shifted focus largely because their work is finished in Washington. In three years, President Bush has signed a series of tax reductions that have added hundreds of billions to the national debt. But most states forbid deficit spending, so pressure to raise taxes is greater when revenues fall short of obligations.

In that regard, the Feb. 3 vote in Oregon serves as a referendum on the antitax movement itself — the endurance of its antigovernment message and its ability to shape elections from the presidency down to state and local offices.

“We think we’re doing pretty well at the national level — tax increases are off the table,” said Paul Prososki, state government affairs manager for Americans for Tax Reform, a group with close ties to the Bush White House. “The battle has moved to the states.”

Antitax advocates predict Oregon voters will reject the $800 million tax increase in resounding fashion. In doing so, they would add an exclamation point to the message that politicians at every level — especially Republicans — risk their careers by raising taxes, advocates said.

Supporters of Measure 30, however, see an opportunity to call the movement’s bluff. After significant state budget cuts of the past two years, they said, Oregon voters at last should be able to see the trade-off between taxes and the quality of services such as schools and health care.

“The idea that we can tighten belts and do less without inflicting serious harm on vital public services is incorrect,” said Jeff Thompson, an economist with the Oregon Center for Public Policy, a progressive research group in Silverton. “There is a real choice, and belt-tightening just won’t cut it.”

Eyes on Oregon Since the recession of 2001, few states have escaped the pain of budget deficits. As in Oregon, legislatures have reduced services and benefits. Some also have tapped trust funds or, like California, proposed selling bonds to fill the gap. At least 18 states have raised sales or income taxes in the past year.

But Measure 30 stands out among state fiscal remedies because it presents a clear choice between higher taxes and prescribed cuts of government services. More importantly for politicians and interest groups, it puts the choice directly in voters’ hands.

Despite signs of economic recovery, many states continue wrestling with persistent deficits, and a big win in Oregon could give antitax advocates added leverage in other state capitals, as well as in U.S. House and Senate races this fall.

“To the extent that lawmakers in other states are nervous about raising taxes, definitely a lot of people are going to have their eyes on what happens in Oregon,” said Matthew Gardner, an analyst with the Institute on Taxation and Economic Policy.

Immediately before Oregon, Alabama was the focus of the antitax movement. And the outcome of that state’s referendum in September was resounding.

Alabama’s Republican governor, Bob Riley, last year proposed $1.2 billion in new taxes. As a congressman, Riley had opposed tax increases on principle. But he tried to build support in the deeply religious state by casting the plan as a moral duty to help the poor.

Leading up to the vote, Americans for Tax Reform issued a series of “fact of the day” media statements to counter Riley. In one, the group seized on a quote from a frustrated Riley aide who said the proposal was foundering in opinion polls because Alabamians were “too stupid to know better.”

The exact extent of antitax groups’ influence on the Alabama vote is unclear because religious groups such as the Christian Coalition of Alabama also weighed in, arguing that higher taxes would be bad for families.

The proposal lost by an overwhelming 2-1 ratio. The loss crippled Riley politically, and his failure became an example that Americans for Tax Reform will use to intimidate Republican politicians in other states, including Oregon.

Shortly after the vote, the group’s leader, Grover Norquist, told The Washington Post: “Every Republican governor who thinks of raising taxes next year will walk past Traitor’s Gate and see Bob Riley’s head on a pike.”

Already, Measure 30 has become an issue in two closely watched U.S. House races in Oregon. Republican challengers to Democratic Reps. David Wu and Darlene Hooley have advocated defeating the measure.

But Rep. Earl Blumenauer, D-Ore., a supporter of Measure 30, downplayed the significance of rejection, saying national groups and their allies in Congress hope to manipulate the Oregon vote for political gain.

“This is a chance for them on the cheap to score a victory,” Blumenauer said. “They want to do more tax cuts in Congress this year. They want people to think deficits don’t matter and that there are no consequences for tax cuts.”

A new frontier In Oregon, Citizens for a Sound Economy has emerged as the most prominent national antitax group opposing Measure 30. The group became involved at the request of members in Oregon, said Brenna Hapes, a spokeswoman at the group’s Washington headquarters.

The group’s main goal in Oregon is to draw attention to its view that taxes threaten economic growth, she said. And on a purely political level, its ability to help gather 118,000 signatures to put Measure 30 on the ballot should serve as a lesson to leaders in other states.

“There were a lot of governors that were turning to taxes when that’s not the problem,” Hapes said. “People don’t want you to raise their taxes. They want you to start spending their money more efficiently.”

Americans for Tax Reform has a more ambitious agenda in Oregon, where it has also begun releasing its “fact of the day” about Measure 30, officials said. While holding the line on taxes, it also hopes to complete a transformation of the Republican Party at the state level by squeezing out any debate about increasing taxes.

“The Oregon referendum is going to show the solidification within the Republican Party of being the antitax increase party,” said Jonathan Collegio, a spokesman at the group’s Washington headquarters. “And over time, the legislators in Oregon who voted for that tax increase are either going to retire or they are going to be thrown out of office.”

That transformation is taking place, he added. He points out that several Republicans in the Oregon Legislature who supported the proposed tax increase have announced plans to retire or accept appointments from Gov. Ted Kulongoski, a Democrat.

Frustration mounts The success of the antitax movement in Oregon and across the country has been particularly frustrating for progressive groups that see government cutbacks as a threat to the welfare of society’s poorest and least-educated citizens.

Several said they fear that voters will be swayed by the simplicity and self-interest of the antitax message but will discount the consequences of budget reductions — bigger classes in schools, limited health care and poorly maintained roads.

“We’ve seen several solid signals that people want more government services,” said Thompson, the Oregon Center economist. “But they tend not to want to pay for them. So there is a disconnect.”

Anticipating a debate last year, Thompson’s group prepared a study concluding that state spending has remained constant relative to income in recent years and that Oregonians’ tax burden has dropped since its peak in the early 1990s.

Progressive groups at the national level agreed that Measure 30 should serve a test of their ability to show that government is providing essential services and doing so in an efficient manner.

But they acknowledged that their task is complicated by the state’s experience following passage of previous limits on taxes, particularly Measure 5 in 1990: Opponents predicted doom, but the reality was less severe.

“You can’t blame voters for saying, ‘Are you just crying wolf again?’ ” said Nick Johnson, director of the state fiscal project for the Center on Budget and Policy Priorities in Washington. “I think elected officials and people who care about services have to do a better job of explaining the link between the revenues and the services.”

In Hillsboro, school officials tried exactly that. Last month, they posted a statement on the district’s Web site that attempted to describe Measure 30 and its impact. But antitax advocates accused school officials of “electioneering” because the statement left out details of the proposed tax increase, said Betsy Biller, the assistant superintendent.

The district was forced to take down the statement, leaving school officials defenseless against further budget reductions, Biller said.

“I don’t believe that it’s a fair fight,” she said. “But it’s the fight that’s drawn.”

Dave Hogan of The Oregonian staff contributed to this report. Jim Barnett: 503-294-7604;