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Oregon Tax Hike On Wealthy, Businesses Passed By Voters

TIM FOUGHT   01/27/10 06:34 AM ET   AP

Oregon Tax Wealthy Business

PORTLAND, Ore. — Oregon has set aside its history of shooting down tax increases on statewide ballots, with voters endorsing higher taxes on businesses and the rich amid a brutal economic slump.

Democrats in the Oregon Legislature made it as easy as they could for the voters to raise taxes on somebody else, and the electorate responded Tuesday by approving Measures 66 and 67.

The increases approved Tuesday will hit people with taxable income upward of $125,000 – estimated at fewer than 3 percent of filers. Many businesses who had been paying an annual $10 minimum will see that rise to at least $150.

With 91 percent of the vote counted, the vote was 54-46 on Measure 66 and 53-47 on Measure 67.

Oregon voters have consistently rebuffed legislative attempts to take more in tax revenue – such as a cigarette tax to pay for health insurance for children three years ago, two previous income tax measures that would have hit most Oregonians and nine sales tax measures over the decades.

A Democratic legislative leader, Senate President Peter Courtney, said he was, just in case, preparing a statement acknowledging defeat just before the results were reported Tuesday.

"This is a tax vote?" he exclaimed later when the victory was evident. "This is indescribable ... It's Oregon being Oregon."

The vote affirms the two-year budget the Legislature controlled by Democrats adopted last year, and spares it $727 million worth of budget cutting during a four-week session that begins Monday.

Courtney's counterpart in the House, Speaker Dave Hunt, says the session will focus on legislation to spur job creation and to help people hurt by the slump that has boosted the unemployment rate to 11 percent and driven record numbers of people to seek aid such as food stamps.

Oregon's Sherwood Forest, take-from-the-rich strategy might appeal to legislators in other states struggling to bandage their budgets, said Portland pollster Tim Hibbitts.

"If you're going to take this to a red state, it's going to be a lot more difficult," he said. "Other blue states that are feeling the pressure may say, 'Maybe we could craft a similar measure and win with that.'"

Business leaders and Republicans were glum. Hibbitts' polls suggested a closer vote, and for much of the voting period, liberal Multnomah County was slow to mail in and drop off ballots, raising the hopes of the tax opponents.

It was a victory for public employee unions who were the spearhead of the campaign for the taxes and raised enough money to outspend the opponents.

A Common Cause analysis put their fundraising advantage to date at $6.85 million to $4.55 million in one of the state's most expensive campaigns.

"The bottom line is the unions bought the election," said State Republican Chairman Bob Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."

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Filed by Adam J. Rose  |