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Measure 28: Oregons war of words heats up

Top state income tax would increase to 9.5 percent for 3 years

Oregon's brief holiday respite from the never-ending budget wars came crashing to a halt with the start of the new year.

Not only does the new year bring the opening of the Legislature, but ballots go in the mail Friday for the Jan. 28 statewide vote on Measure 28. That's the proposed three-year boost in the state income tax to balance the 2001-03 budget.

Campaigns both for and against the measure get under way in earnest today.

Measure 28 might be new, but the forces behind it are not. The vote marks another chapter in the continuing debate about taxes and government that has dominated Oregon's political landscape for a generation. And it illustrates a fundamental quandary in Oregon: Voters say they like government services such as roads and schools and police, except when they have to pay for them.

Measure 28 would increase Oregon's top personal income tax rate from 9 percent to 9.5 percent for three years, costing the average taxpayer an extra $114 a year until the tax expires in 2005.

The extra tax would balance what's left of the 2001-03 budget and help boost the 2003-05 budget, expected to arrive this spring with bleak revenue prospects. If the measure fails, another $310 million comes out of the 2001-03 budget in a package of cuts that kick in Feb. 1, three days after the votes are counted.

Supporters say Oregon needs Measure 28 to avoid firing teachers and police and making deep cuts in government services. Opponents say they're crying wolf, that spending is excessive and that the state has other ways to save money than cutting essential services.

Unlike some previous battles, though, this debate is simple, short and to the point. Measure 28 carries no long-term policy consequences other than budget cuts and doesn't change any of the fundamentals in the Oregon tax system. Those debates may come later.

Three ballot measures over the last decade Ñ Measure 5 in 1990, Measure 47 in 1996 and Measure 50 in 1997 Ñ restructured Oregon's state tax system.

The measures shifted the cost of education from property taxes, a stable revenue source that pays for local government only, to the state general fund, which gets most of its money from income taxes but is more susceptible to the whims of the economy.

The big jump in income tax collections during the buoyant 1990s effectively masked that shift of financial responsibility.

As for Measure 28, a poll taken in late October for the Portland Tribune showed 58 percent of Oregon voters opposed to the measure, 36 percent in favor and only 6 percent unsure.

But now that the holidays are past, public attention might turn back to budget issues.

Kitzhaber support

Supporters went on the air with radio ads Monday and plan news conferences today with backers, including Gov. John Kitzhaber. In fact, Kitzhaber's last major speech as governor will be in support of Measure 28 before the Eugene Rotary Club today.

Opponents also start their public campaign today. Anti-tax activists will join Libertarian Party of Oregon officials at news conferences today in Salem and Beaverton. No significant spending by the opponents has surfaced, but the foes say money could be raised quickly if the measure appears to be winning.

Supporters may get the endorsement this week of the City Club of Portland. A City Club committee studying the measure said it was not a long-term solution to state finance issues but found it 'a reasonable effort to protect our state's social fabric.'

Opponents, though, just don't believe there's a problem and don't trust predictions of gloom.

'It's nonsense,' said Matt Evans, executive director of Oregon Tax Research, a tax policy organization. 'People are not going to die. They could solve this problem without it impacting many people at all.'

Legislators are 'morally unfit' to do the job and should have cut the budget rather than placing Measure 28 on the ballot, said Don McIntire, president of the Taxpayer Association of Oregon, advocates for lower taxes.

'It's placing another burden on the taxpayer when that's absolutely the last thing government should be doing,' McIntire said. 'They should know if we reduce tax rates marginally, there will be a healthy economy and more revenue. To them, it doesn't matter who they screw up, they still get their paychecks.'

Mike Roach, owner of Paloma Clothing in the Hillsdale Shopping Center, found practical reasons for supporting the additional tax. He worries that closing the courts one day a week Ñ as promised if the measure fails Ñ will mean long delays in prosecuting shoplifters, a bane of retail stores.

'It's not hard to figure out how bad it can get if it's open season on retailers,' he said. 'A yes vote is a way to avoid taking a serious step backward off a pretty high cliff.

'Another round of major cuts to those services is going to hamper business and the economy's ability to recover. For a businessman, you ask yourself if you're better off paying $9 a month or saving it and taking your chances. For $9 a month, it's a simple economic decision.'

Roach also said further cuts to the schools would further damage the state's ability to attract new business. The reputation of Oregon schools and their shrinking school year is already known nationally, he said, through a Page One story last month in the New York Times.

The math for retailers was simple, he said. Retailers depend on the economy, and the economy won't recover quickly without new businesses, but Oregon can't attract new businesses if company officials don't believe the public schools can provide a good education for their kids.

Kitzhaber is expected to sound similar themes today.

'We cannot expect to recover our prosperity or our competitiveness if we let our education system slide into mediocrity,' he said in a statement. 'We cannot expect new businesses to relocate in Oregon if we allow our infrastructure to crumble and fray around the edges.'

Contact Don Hamilton at This email address is being protected from spambots. You need JavaScript enabled to view it..