Oregon Legislators OK $800-Million Tax Hike

Wrapping up seven months of debate, Oregon legislators have approved a balanced budget that includes an $800-million tax increase, and the governor says he will sign it into law.

“I will sign this budget because it is the only way to provide for a full school year for the children of Oregon,” Gov. Ted Kulongoski, a Democrat, said in a statement Wednesday. “The legislators who supported this budget agree with me, and I commend their courage.”

Kulongoski had previously said he did not support a general tax increase.

Nearly half of the state’s school districts were forced to trim days from the academic calendar this year as funds ran low.

The $11.6-billion budget includes a graduated income-tax hike, increases in corporate taxes and new taxes on health-care providers.

The budget package was put together by a coalition of moderate Republicans and Democrats. The bill was passed by the Oregon Senate on Tuesday, 19 to 11, and by the House, 36 to 22, on Wednesday.

Eleven House Republicans joined all 25 Democrats in approving the bill.

Rep. Brad Avakian, a Democrat, cast the deciding vote.

“I knew what I was going to do all along, but I just didn’t like this bill,” he said. “I didn’t want to raise taxes, I didn’t want to cut services, but it was the best of the bad options we had.... It all came down to protecting kids and schools, and that was the reason I voted the way I did.”

Troy Nichols, chief of staff to Republican House Majority Leader Tim Knopp, who opposed the tax increases, described the package as disappointing.

“It’s the wrong thing for Oregon,” he said. “We have the highest unemployment in the country, and we are adding to the tax burden.”

As of July, Oregon’s unemployment rate was 8.1%, the highest in the nation.