Calif. tax rejection: Bad news for Oregon?

SALEM — Tax increases are notoriously tough propositions in Oregon.

Five years ago, for example, Oregonians overwhelmingly rejected new taxes to stave off deep budget cuts — twice.

Democratic lawmakers are hoping this year will be different should Republicans succeed in referring $800 million in new spending to the November ballot.

And yet, if California is any indication, lawmakers may be back in the cutting room by year's end. This week, voters there soundly rejected five of their own tax measures that would have helped the state balance a deficit of more than $20 billion.

"We will overwhelmingly defeat any income tax increase," said Bob Tiernan, chairman of the state's Republican Party. "The best poll we have just came out of California."

Oregon is facing a difference of about $3.8 billion between the revenues the state is expected to bring in over the next two years and the money Democrats say it needs to continue current programs.

To help close that gap, they're proposing a combination of $2 billion in cuts, $1 billion in reserve and stimulus cash and $800 million in new taxes. When Sen. Margaret Carter, one of two chief budget writers, presented the plan earlier this week, she said she was "hopeful but nervous" that voters would swallow more taxes.

That was before the California vote.

Certainly, Carter said, that news doesn't make her feel any better about an Oregon tax referendum. "If California is a leader, it sends a message to the people of the United States, 'I'm keeping my pocketbook tight,'" she said.

If Republicans refer the tax proposal — Tiernan has promised they will — and voters, in turn, reject it, lawmakers will have no choice but to make further cuts.

"That makes my tummy really, really hot," Carter said. "We don't have any more cleaning the fat."

Courts would go to a four-day work week, school years would become even shorter and already-reduced social programs would be dismissed altogether.

"Even with this $800 million we are looking at positively devastating cuts to basic critical services. This $800 million is not saving us from that," said Cathy Kaufmann, a member of the advocacy group Human Services Coalition. "The $800 million is saving us from absolutely falling over the edge when it comes to the services we provide."

Despite the California vote, Kaufmann said the states are different enough that Tuesday's result isn't necessarily a prelude.

"Oregon is not California," Kaufmann said. "In California there were five different measures. It sounds like there was a huge mishmash and that support was divided, even among advocates."

To be sure, the measures defeated in California are considerably different from what would likely be before Oregon voters. There, lawmakers asked voters to shuffle money from fund to fund and to borrow in order to invest in a revamped lottery system. Oregon lawmakers, on the other hand, are looking at increasing the corporate minimum tax and the income tax on families making more than $250,000.

"If anything, California shows us how not to move forward. Their approach of robbing from one area to pay for another just did not meet the fairness test," said House Speaker Dave Hunt in a statement. "We're asking all Oregonians to share a little bit in the pain of getting us through this crisis and we think they will understand that."

Pollster Tim Hibbitts says the Democrats are half right: "I don't think there's a parallel because I don't think what was put on the ballot in California is what would be put on the ballot here."

That said, "I don't think that it's a done deal for them at all."

Some taxes might have a better shot than others, he said. Sin taxes, like those on beer and tobacco, could win approval. So might the income tax on high-wage earners. But, ultimately, there's no way around the bad economy.

"If you're in a household and you're trying to keep a roof over your family's head or you're unemployed or you don't have health care or you're trying to put food on the table. What do you think is going to be your priority? Your family or the state budget?" Hibbitts asked. "That's not going to be a hard decision for most voters."

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