Facing a budget crunch that threatened to close schools early, lay off teachers and slash healthcare benefits, Oregon voters ended two decades of tax scrimping Tuesday by approving higher taxes on corporations and wealthy families.
The two ballot measures passed handily in a referendum watched closely around the country as a signal of whether voters are ready to approve targeted tax hikes to bail out cash-starved state treasuries.
Oregon voters since 1990 have limited property taxes, rejected sales taxes and vetoed across-the-board income taxes. But with 87% of the ballots counted, the measure to raise income taxes on households earning more than $250,000 a year, and individuals earning more than $125,000, was winning with 54.1%. A second measure to raise the state’s corporate income tax was ahead with 53.6%.
Business leaders had fought the measures, arguing that they would drive away entrepreneurs and force struggling businesses to slash jobs.
The two measures would raise more than $700 million to help close a gap in the state budget that at one point reached $4 billion.
Kevin Looper, who ran the campaign to pass the measures, said the vote was a signal that predictions of a general conservative retrenchment following the Republican victory in this month’s Senate race in Massachusetts were premature.
“I think this is firmly a progressive, populist moment. It just takes leaders to stand up and say what we’re about, and make sure things are clear to voters,” he said. “Because when the choice gets made clear like that, voters will almost always make the right decision.”
Looper said the credit goes to Democratic leaders in the Legislature, who passed the tax increases against nearly unanimous Republican opposition.
“It was an amazingly courageous thing for the Legislature to say, ‘We’re going to both protect schools and make a case for tax fairness by keeping the burden off middle-class families,’ ” he said.
Opponents gathered signatures to force the referendum.
Supporters, backed by public employee unions, raised $6.8 million, compared with $4.6 million by opponents who relied on the banking industry and business groups. Final financial reports have yet to be filed.
“The biggest issue is we were substantially outspent by the public employee unions. They were able to double, and more than that, the money we were spending on the broadcast media, and were able to get that much more of their message out,” said Pat McCormick, spokesman for Oregonians Against Job-Killing Taxes.