VOTERS WILL DECIDE ON TAX BOOST

Harry Esteve contributed to this story.

Summary: Opponents get more than double the number of signatures needed on the
$800 million increase Opponents of the Legislature’s $800 million tax increase
collected more than twice the number of valid signatures needed to put the
issue on a Feb. 3 ballot, state elections officials said Wednesday.

That clears the way for the latest in a long line of political battles over
Oregon’s government services and the taxes to pay for them.

In the next two months, supporters of Measure 30 will use what they call a
“neighbor-to-neighbor, around-the-water cooler” campaign to convince voters
that the increase is vital to schools and other public services.

Opponents, promising to “spend as much as necessary and as little as possible,”
will focus on the size of the increase and argue that it undermines the state’s
economic recovery.

The Legislature approved the tax increase as a compromise to balance the $11.5
billion 2003-05 budget at the end of a tumultuous session rocked by a $2
billion loss in revenue. The bill contains a temporary surcharge on income
taxes, a limit on the medical deduction for senior citizens and increases in
corporate taxes and property taxes.

Opponents needed 50,420 valid signatures to put a referendum on the ballot.
Last week, they submitted almost three times that many names, and state
elections officials estimated that 118,273 were valid, based on an examination
of a 1,000-signature sample.

The strong showing of the petition effort gives opponents a boost going into
the campaign’s next phase.

“The number of signatures tells the story,” said Russ Walker, spokesman for the
Taxpayer Defense Fund, the opposition campaign organization.

Opponents start with some other clear advantages. For one thing, they have
history on their side: Voters have not approved a statewide general tax
increase since they endorsed creation of an income tax in 1930. For another, a
recent poll showed support for the measure at 25 percent. And defeating a
ballot measure is always easier than passing one.

Opponents have won most of the relatively close tax elections of late — the
property tax limits of Measures 5, 47 and 50, and most recently, the
Legislature’s tax-increase request in January. But government supporters
defeated tax-cut measures in 2000 that would have cost the state billions.

What would it take to overcome history and find the last few percentage points
that might put a sizable tax increase over the top?

“I’d be making a lot more money if I knew the answer to that question,” said
Morgan Allen, director of the Our Oregon Coalition, the group of labor unions
and service advocates that supports the measure.

“We’re planning to run a grass-roots-oriented campaign,” Allen said. “Once
people hear about potential cuts to schools, about thousands losing health
care, seniors losing drugs, courts closed, troopers laid off, criminals let
loose, our message will be compelling.”

Allen said the group has not decided how much money to spend or whether to
mount a television advertising campaign. But the campaign has to walk a careful
line, between trying to convince voters that cuts that would result from the
measure’s defeat are real and sounding an overheated alarm that voters would
distrust.

Democratic Gov. Ted Kulongoski took the cautious approach Wednesday in a speech
at the annual Oregon Crime Commission luncheon.

“I don’t want to frighten anyone,” he said. “If this measure doesn’t pass, the
state’s going to survive. Does it change the way we do things? Oh, yes.”

He singled out how rejection would affect the Oregon Health Plan, saying it
would force people into expensive emergency room care and increase health care
costs.

If the supporters’ message is subtle, the opponents’ is as simple as it gets in
politics: Vote no to stop the tax increase.

“It really boils down to increasing taxes in a recession is a bad idea,” Walker
said. “People intuitively know the Legislature has not balanced the budget by
finding efficiencies. Until they do, we’re not giving them a raise.”

Walker, Oregon director of Citizens for a Sound Economy, a group based in
Washington, D.C., that supports smaller government and lower taxes, said the
opposition could raise the money it needed to defeat the measure.

“We don’t want to waste money on a campaign if we don’t need to spend it,”
Walker said.

Rep. Lane Shetterly, R-Dallas, the House revenue chairman and one of the
architects of the Legislature’s tax plan, will be defending it.

“There’s a natural tendency to believe we have more money than we have, and if
we don’t, there’s easy money to come by,” Shetterly said. “That message needs
to be debunked.”

If voters turn down the tax request, Shetterly said he doubts the Legislature
would come back for a special session.

Lawmakers already outlined in statute where $545 million in cuts would be made,
and the governor can use his authority to make across- the-board cuts to make
up the difference.

“If Measure 30 fails, I don’t think there’s any realistic prospect for a new or
different package,” Shetterly said. “We just have to say we will absorb the
cuts and start building from there.”

Harry Esteve contributed to this story.

James Mayer: 503-294-4109; jimmayer@news.oregonian.com.

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