Senate forwards cigarette tax hike.

Byline: David Steves The Register-Guard

SALEM - The overwhelmingly Democratic Senate accomplished in a couple of hours Friday what the House has struggled for all session: It passed its version of the cigarette-tax increase to pay for a so-called "healthy kids" insurance plan for uninsured children and other health spending.

But the Senate legislation - a ballot referral to be voted on in a November election and a companion bill detailing the plan - raised a new set of criticisms.

Lacking the authority to initiate revenue-raising legislation, the Senate resorted to a ballot referral in the form of a constitutional amendment. That drew complaints from opponents and concessions from backers that it's not the best way to pursue Gov. Ted Kulongoski's plan to boost the cigarette tax by 84.5 cents per pack.

"This is a terrible idea to put a tobacco tax in the Oregon Constitution," said Senate Minority Leader Ted Ferrioli, R-John Day. "It is just not the appropriate place."

Sen. Margaret Carter, a Portland Democrat who carried the amendment during the floor debate, said the state's charter of governing principles and citizen rights seemed to her a fine destination for a policy that would ensure that most of Oregon's 117,000 lower-income children receive health care through the state.

"This is a critical issue," Carter said. "Children are getting sick every day. Children are going without care every day. And children are dying every day."

The amendment, Senate Joint Resolution 5, won the Senate's 20-9 approval. The companion measure, Senate Bill 3, passed 22-7.

Friday's step put the question back before the Oregon House. But this time, it is a question that chamber's slim 31-vote Democratic majority may finally be able to answer.

Unlike the tax increase bill and the twice-considered ballot referral of the so-called "healthy kids plan" - which led to three defeats when voted on - the Senate version is considered to have a good chance of passing in the House.

Even if all 29 Republicans vote against the Senate version, the Democrats can pass it because, as a constitutional amendment, it requires a simple majority. That was not the case for the House's previous three votes, all of which would have put the cigarette tax in the state statutes and therefore required a 36-vote supermajority.

With the entire Democratic caucus ready to send the constitutional amendment to the November ballot, it appears to be the best choice left, said Russ Kelley, spokesman for House Speaker Jeff Merkley, D-Portland.

Friday afternoon, the House Revenue Committee voted out another version of the statutory cigarette-tax bill. However, given that too few Republicans have been willing to vote for such legislation and GOP leaders have refused to negotiate for a version that could draw more of the caucus' votes, House Majority Leader Dave Hunt said that bill is unlikely to proceed.

The Gladstone Democrat said the only viable options were to pass the Senate's constitutional amendment or to bag the legislative effort and try for a citizen initiative.

"One way or another, Healthy Kids is going to be enacted," he said. "The question is, what's the best route to that?"

Hunt said he has yet to talk to anyone - regardless of their party or views on the cigarette tax proposal - who thinks putting it in the Oregon Constitution is a good idea.

The advantages of referring to the voters a constitutional amendment is that the Legislature could set the election date for this November, rather than wait on a 2008 fall election, as required for an initiative, Hunt said. Also, a referral would not require supporters to spend money on a costly campaign to circulate petitions.

What makes an initiative attractive is that it would put the Healthy Kids Plan where most legislators think it belongs: in state statute, rather than the constitution. And the election campaign for a statutory initiative would avoid the constitutional issue, he said.

"The citizen initiative process is probably an easier campaign," Hunt said, "because you don't have to handle the opponents' arguments that this doesn't belong in the constitution."

Read David Steves' Capitol Notebook blog at www.register guard.com/capnote. He can be reached at [phone] or [e-mail].