Oregonians Reject Tax Hike

Oregonians rejected a proposed tax increase Tuesday, setting the stage for another round of spending cuts for schools, courts and other programs already reeling from earlier slashes.

The $800-million measure, with more than half the votes counted, trailed 58% to 42%.

“The margin of defeat is larger than expected,” said Kevin Mannix, state GOP chairman and an opponent of the tax package. “It’s not just a defeat, it’s a swift kick in the pants to business-as-usual politicians who have ignored the need for reform.”

Gov. Ted Kulongoski has said he was “not inclined” to convene a special session of the Legislature to consider retooling spending cuts already designated for implementation if the measure failed.

But he is under pressure from Republicans to do just that.

“I will insist a special session be required should it go down,” Mannix said earlier Tuesday night.

State Senate President Peter Courtney, a Democrat, said calling a special session to redo the budget “isn’t in the cards.” But he suggested the governor or the state Emergency Board could “make small adjustments here and there and then implement the will of the people.”

A leading backer of the tax plan, Oregon AFL-CIO President Tim Nesbitt, said the Legislature and the governor should not rush into a special session.

“Everybody needs to let the dust settle, see what’s real, and then take a clear-headed look at how to solve this problem,” Nesbitt said.

The voting was conducted by mail over the last couple of weeks, with Tuesday the deadline for ballots to be turned in.

A year ago, Oregon voters rejected a $310-million income tax increase. As a result, the school year was shortened, some state troopers were laid off and thousands of poor people lost state health insurance.

Then, in August, the Legislature narrowly passed an $800-million tax package in a bid to balance the budget and protect schools, welfare and law enforcement from further cuts. But opponents quickly gathered enough signatures to hold Tuesday’s repeal vote.

The tax package contained a temporary surcharge that would have amounted to about $36 a year for a household with the state’s median annual income of $41,000.

Opponents said that Oregonians could not afford more taxes and that raising taxes would hinder economic recovery in a state that has had the nation’s highest jobless rate for much of the last two years.

As of December, unemployment in Oregon stood at 7.2%, second-highest behind Alaska.