Tax Vote’s Impact Huge – Pass or Fail

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.”