Oregon soundly defeats tax increase, triggering cuts to services

PORTLAND, Ore. – Oregon voters resoundingly rejected a proposed $800 million tax hike, turning aside warnings about looming state budget cuts for schools and other key services.

With 95 percent of precincts reporting early Wednesday, the measure was failing 59 percent to 41 percent. Rejection of the tax package automatically triggers $544 million in spending cuts on May 1.

Political analyst Jim Moore said the vote showed that Oregonians weren’t swayed by warnings that schools and other services would suffer big cuts without the tax increase.

“People are suspicious of government, and they simply weren’t buying the doom and gloom thing,” Moore said.

The Legislature narrowly passed the latest tax package last August in a bid to balance the state budget without inflicting even more pain on schools, welfare programs and law enforcement.

Anti-tax groups, led by Citizens for a Sound Economy, had no difficulty collecting enough petition signatures to refer the $800 million tax measure to the voters.

The leader of the tax opponents, Russ Walker, said voters made it clear they didn’t want to pay higher taxes at a time when the state’s economy is struggling. As of December, unemployment in Oregon stood at 7.2 percent, the nation’s second-highest rate, behind Alaska’s.

The proposed tax measure would have shielded schools from $285 million in cutbacks, while the Oregon Health Plan, which extends health insurance to poor people and once was touted as an example for the nation, now loses $182 million, meaning nearly 50,000 of the working poor would lose their coverage.

Gov. Ted Kulongoski, a Democrat, is under pressure from some Republicans to call a special session to recraft the budget in a way to soften the impact on schools and other key services.

Debbie Dorris, a backer of the tax increase, said she thinks some voters have simply tuned out the seemingly endless debate over the state’s budget crisis.

“People are pretty fatigued over the whole issue,” Dorris said.

The core of the tax measure was a temporary income tax surcharge. 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.

Oregonians haven’t voted to raise the state income tax since it was adopted in 1930. Efforts to pass a sales tax also have failed. Only cigarette taxes have found favor with voters in recent years.

On the Net:

Citizens for a Sound Economy: http://www.cse.org/oregon/index.php

Measure supporters: http://www.ouroregoncoalition.org/