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Oregon slams door on tax-raise measure.

Byline: David Steves The Register-Guard

Oregonians resoundingly rejected the Legislature's budget-balancing tax package Tuesday, forcing state officials to consider how to avert some of the cuts that now face schools, human services and public safety programs.

Supporters and opponents alike said long before Tuesday's vote tally that they expected Measure 30 to go down, given the state's tradition of rejecting taxes and voter worries that raising taxes would hamper Oregon's climb out of a long recession. But with 59 percent opposing and 41 percent supporting the tax package, the outcome was more lopsided than backers had expected.

Even the two counties with Oregon's more liberal voting precincts failed to support the tax increase. In Lane County, it failed narrowly, with 51 percent opposed and 49 percent in support. But in Oregon's most populous county, Multnomah, voters turned it down 58 percent to 42 percent. That county last year approved the state's first local income tax surcharge, insulating schools and other services from cuts regardless of what happened with Measure 30.

The vote will punch an $800 million hole into the state's $11.5 billion general-fund budget. After two grueling years of shifting funds from reserves, borrowing, cutting or eliminating programs and twice turning to voters for more revenue, top officials said they saw little choice but to reduce spending and hope they could offset the most painful program cuts through budget adjustments.

"We've loaned. We've borrowed. We've shifted, we've cut. And now here we are," said Senate President Peter Courtney, D-Salem. With voters effectively yanking the option of higher taxes off the table, Courtney said it makes no sense to "just come back and fight the same battles we've already fought."

Gov. Ted Kulongoski, a Democrat who supported the tax measure after a signature drive forced Tuesday's referendum vote, will discuss ways he may try to spare some of the services slated for reductions, including the Oregon State Police forensics labs and the Oregon Health Plan, spokeswoman Mary Ellen Glynn said. But she said Oregonians should not expect a full-fledged bailout from the program cuts passed by lawmakers last year in the event that voters reject higher taxes.

"We think it's very real and there are a lot of services that are going to be cut because of Measure 30's failure," she said. "The fact of the matter is you can't take an $800 million cut out of the budget and not lose real service to real people."

The centerpiece of Measure 30 was an income-tax surcharge, which would have raised $545 million for 2003-05. In addition, the measure would have generated $255 million for the current two-year budget through higher business taxes, a reduction in the property-tax discount for those who pay early, a less generous tax break for seniors with medical expenses and a higher tax for purchasers of large SUVs to offset a federal tax cut for such vehicles.

The rejection of the tax package came despite the Legislature's prevailing sense that if it was going to raise taxes, it should make that decision on its own, rather than pass the decision-making responsibility off to the voters - the approach that led to last year's failed Measure 28 tax proposal, which lawmakers placed directly on the ballot. But that measure went down by a closer ratio - 46 percent for, 54 percent against - than did Measure 30.

But within two months of the Legislature's approval of the tax package last August, anti-tax groups and the state Republican and Libertarian parties had gathered more than double the number of signatures required to force the tax package to the ballot.

Kulongoski and other state leaders said for weeks leading up to the voting finale that they did not expect the Legislature to return in special session to avoid some of the scheduled cuts.

Those cuts, which total $545 million, were passed into law last session, to take effect starting May 1.

Leaders of the push to repeal the tax increase, including state Republican Party Chairman Kevin Mannix, have said they would pressure Kulongoski and legislative leaders to return to the Capitol in special session to prevent some or all of the cuts. If no such session is called, the issue could come up when the Legislature convenes the June session that it has already scheduled to deal with tax reform.

Measure 30 opponents have contended that a special session to enact greater efficiencies and do away with spending for low-priority programs would allow basic health care, education standards and public safety programs to be preserved.

After Measure 30's defeat, Mannix said the approach advocated by Kulongoski amounted to placing "Band-aids on a gaping wound."

"If we see no special session this year to bring about real reform, the accountability will be in November," when most legislators face re-election, he said.

But the Legislature's top Republican, House Speaker Karen Minnis, R-Wood Village, said that with the Senate president and governor unwilling to deal with the Measure 30 fallout in a special session, she thought the best approach would be for Kulongoski to use his authority as head of the executive branch to manage budgets in ways that would allow some public safety and human services cuts to be avoided.

Asked about a special session, she said: "I'd say, let's hold off ... I believe if we can manage this, then we should."

Lane County: No: 60,019; Yes: 58,220

State: No: 620,098; Yes: 425,228

CAPTION(S):

John Klicker / The Associated Press Kelsey DeLacy, 10, listens as early election returns appear to spell defeat at the "Yes on 30" campaign headquarters in Portland on Tuesday. The measure failed overwhelmingly.
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Title Annotation:Ballot Measures; Election: Lawmakers face budget deficit
Publication:The Register-Guard (Eugene, OR)
Date:Feb 4, 2004
Words:938
Previous Article:Ballots: New machines work like a charm.
Next Article:REDUCTIONS PLANNED IN THE STATE BUDGET.


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