TAX NEWS - JUNE 2010

Oregon Tax: Will voters continue to back tax increases?

A couple of weeks back, I commented that Oregonians probably wouldn't be interested in any more tax increases to help the state dig its way out of its ongoing fiscal morass.

That earned me a call from Arthur Towers, SEIU's political coordinator, who politely disagreed with what I said.

Towers thinks that the political pendulum has swung, and voters now are willing to pay higher taxes.

He points to the past two elections to make his point:

- The January special election regarding Measures 66 and 67 was supposed to be too close to call. Instead, both tax measures were approved by enough of a majority that the election was called within an hour of the polls closing.

And it wasn't just the center-to-left burgs that passed the measures. A majority of voters in cities such as Pendleton, Hermiston, La Grande, Grants Pass, Coos Bay, North Bend and The Dalles also approved both measures, Towers said.

- Two Republican lawmakers from Eastern Oregon were targeted by conservatives in last month's primary because they voted for one or both of the income-tax increases that ended up going before voters as Measures 66 and 67.

But Representatives Bob Jenson of Pendleton and Greg Smith of Heppner received the support of their fellow Republicans, and the conservative challengers were turned away.

What's more, Towers said, Jenson and Smith won by embracing their tax votes, running ads that showed how the tax increases benefited everyone in Oregon.

"They took their tax votes head-on, and the anti-public-service crowd threw the kitchen sink at them. Those were well-funded races by challengers who attacked them directly for voting for services," Towers said. "Voters were very, very well-informed about their votes, and they voted to re-elect them."

Of course, both these elections took place before to the news two weeks ago that there's still a $577 million shortfall in the current two-year budget.

Gov. Ted Kulongoski has ordered all departments to cut 9 percent from their budgets. Those cuts are expected to be made public later this week.

To my way of thinking, this ought to really sour voters on any more tax increases. After all, they passed two tax hikes and the state's still sinking in a quicksand of red ink.

I put this to Towers, who disagreed.

He argues the voters aren't supporting tax increases to balance budgets or restore the state to fiscal health. They are voting in favor of maintaining government services during a critical economic time, and in favor of doing so by taxing corporations and high-income people who aren't paying their fair share.

"They want kids to have full school years, criminals kept off the street and people injured by the bad economy not face a double-whammy by not being able to receive financial assistance they need," Towers said. "The voters really got that this is a massive recession that we're in. There's a record of a need for services. Voters understand all these challenges and want to see all this stuff protected. I think there's demand for even more to be done to protect these services."

Given that, Towers believes voters are going to be disappointed in the cuts ordered by Kulongoski, and likely will continue to support tax increases to pay for public services until the economy turns the corner.

I don't know that I'm convinced by his argument, but at least I can see where he's coming from. What do you folks think?