Are voters willing raise taxes amid a shaky recovery and still growing unemployment? Conventional wisdom might say “no,” but Oregon voters clearly said “yes” yesterday at the polls. (I mean “at the mailbox” because Oregon eliminated its polls years ago.) Two closely watched ballot measures are passing with comfortable margins: Ballot Measure 66, which raises taxes on households with incomes of more than $250,000, and Ballot Measure 67, which boosts corporate minimum taxes and tax rates on profits.
It’s worth noting that Oregonians are not historically a tax-happy bunch, and that their economy is generally in worst shape than Washington’s. As the Oregonian reported:
The double-barreled victory is the first voter-approved statewide income tax increase since the 1930s. Other states, facing similar budget woes, are watching the outcome closely because Oregon, after all, is a state that capped property taxes and locked a surplus tax rebate program into the constitution. The last time voters approved a tax increase was 2002, when they agreed to bump up tobacco taxes to help pay for the Oregon Health Plan. Voters rejected income tax increases twice in recent years.
But the measures passed with a full-court press from education and government employee groups, and amid fears of drastic cuts. It might have helped that these fell in the more palatable “tax hikes on the other guy” category – rich people and corporations.
Washington state lawmakers, who are considering various “revenue enhancements” to help fill their own budget gap, certainly are taking note of the Oregon vote. Gov. Chris Gregoire issued this statement:
“Oregon voters met the challenge of these difficult times and clearly said that schools, healthcare, public safety and other essential services cannot be forsaken. It is gratifying to see that the public understands the importance of preserving services to the most needy and providing education to the next generation – especially now when those efforts are most needed.”
Opponents of deep cuts in Washington were quick to point out the significance of the vote.
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Stagnant revenue collections in the last quarter of 2009, combined with shortfalls carried over from the previous three quarters, left the city facing a $12 million budget gap heading into 2010, the second year of the city’s biannual budget cycle.