Supporters of Oregon Measures 41 and 48 see them as a way to force lawmakers to stop spending money on useless programs and to better prioritize how the Legislature spends Oregonians’ tax money.
Opponents of those measures, however, say they will dramatically reduce how much money the state is able to spend on higher education, possibly causing tuition to skyrocket.
If passed by voters on the November ballot, both measures would reduce the amount of funds the state receives in future years.
Measure 41, billed as a family tax cut by supporters, would allow many people to take greater personal deductions on their tax returns, getting more money back at the end of the year.
A proposed constitutional amendment, Measure 48 would put a cap on the amount of money the state is allowed to spend every two years. It is also intended to create a “rainy day fund” for emergency spending.
Both measures are opposed by the Defend Oregon Coalition, which consists of roughly 125 organizations at the state and national level. University President Dave Frohnmayer and summer Student Senate President Sara Hamilton have also spoken out against them.
Measure 41 would allow taxpayers to take either a tax deduction on their state returns in the amount deducted from federal taxes, which is about $3,200, or to claim the existing Oregon personal exemption credit, which was about $154 in 2005, according to documents on the secretary of state’s
Web site.
The measure would reduce general fund revenue for state-funded programs, and the effects of the measure on state revenue would be greater each successive year because of the federal deduction increasing over time.
Proponents of the measure, which is co-authored by Oregon Taxpayers United Executive Director Bill Sizemore and supported by the Oregon chapter of FreedomWorks, say each taxpayer would receive $140 per year in additional savings.
Russ Walker, Oregon director for FreedomWorks, said the measure benefits individual taxpayers and families instead of businesses. The only people who don’t benefit from the measure are those who don’t pay taxes or who earn more than $250,000 a year, he said.
FreedomWorks fights for lower taxes, less government and more economic freedom, according to its Web site.
“Our measure is only to provide tax relief to those who pay taxes,” Walker said. “Of all people who file and owe taxes and use the deduction, it would apply to 98 percent of those taxpayers.”
But Becca Uherbelau, spokeswoman for the Defend Oregon Coalition, said the passage of Measure 41 would lead to a $792 million cut to the state’s general fund, which is used to finance state services such as education and public safety.
She said if the measure passes and connects Oregon to the federal tax code, the state will be subject to tax decisions at the federal level, such as President George W. Bush’s tax cuts.
Measure 48 would limit increases in state spending to match the percentage increase in state population and in inflation from one biennium to the next.
Legislative spending could not increase past the allowed rate unless both houses of the Legislature approved the spending by a two-thirds vote, according to the Secretary of State’s Web site. Voters would also have to approve the spending.
Spokesman Matt Evans said the Legislature’s spending has increased an average of 14 percent, while the state’s population and rate of inflation have increased an average of 10 percent.
By having a maximum amount the Legislature is allowed to spend, legislators would be forced to manage Oregon’s spending and prioritize state programs, and voters would be able to judge legislators on how well they do their jobs, Evans said. State revenue would still increase, he said.
Evans also said supporters plan to encourage the Legislature to create what they have called a “rainy day fund,” where excess revenue not spent by the Legislature is put away for emergencies. Evans cited the last state recession in 2001, when the state was forced to cut funding for several state programs, as proof of the need for such a fund.
“With a rainy day fund, they wouldn’t have had to do any of that,” Evans said. “They simply would have been able to bring in additional money and continue to fund those programs, even at an increased level during a recession by using the savings.”
Critics of the measure, however, have said a cap on spending would eliminate $2.2 billion from the
2007-2009 budget, leading to cuts in the state budget for programs. Uherbelau said that because the measure doesn’t require legislators to create a rainy day fund, the money would just sit unused.
Even if the state did create an emergency fund, the state’s hands would be tied in responding to an emergency because of the voting required to access the funds, she said.
Opponents of Measure 48 have compared it to Colorado’s Taxpayer Bill of Rights, which used the same spending formula.
Colorado voters loosened many TaBOR restrictions in a November 2005 election after the state’s spending restrictions led to major budget cuts.
Evans said TaBOR was different in that it limited what the government could spend and not what it could collect, and in that Colorado could not create an emergency fund. Measure 48, in contrast, allows the state to spend up to its mandated limit.
Critics also point out that the campaign to pass Measure 48 is largely funded by New York developer Howard Rich, but proponents say he is only involved through the Americans for Limited Government, a national group that pushes for states to limit spending.
Oregon businessman and Bill Sizemore supporter Loren Parks, who now lives in Nevada, has made large contributions to Measure 41. Supporters of the measure say he has nothing to gain from the measure because he is wealthy and lives out of state.
Proponents of both measures said excessive spending by the Legislature is the reason why they are needed now, but Uherbelau said neither measure leads to more accountability from the state.
“Neither of these measures force the state legislators to act because it leaves them at their own discretion,”
Uherbelau said. “Neither of these measures accomplishes the goals of having an emergency fund or reforming the state’s
tax system.”
Both measures have opponents at the state and university level. Democrat Gov. Ted Kulongoski said he opposes both measures, while Republican candidate Ron Saxton said he is in favor of Measure 41, but that he would vote against Measure 48.
“If ballot measures 41 and 48 are passed, opportunities for students for the future will be lost and the future of our state will be in jeopardy,” Frohnmayer said at a Sept. 25 news conference. “(The measures) are something we can not deal with in a constructive way in Oregon.”
However, proponents for both measures counter that there are many benefits for university students if the measures pass.
Walker said the money refunded to taxpayers would help cut costs and lead to a better economy, benefiting students who enter the workforce. Evans said Measure 48 would limit tuition increases because the state wouldn’t be able to spend any additional money raised by tuition.
Uherbelau said education would suffer throughout the state if both measures passed. She said students would not benefit from tax refunds under Measure 41 because most don’t have dependents or tax deductions to declare. Instead, they would see tuition increases because of the revenue loss from the general fund, she said.
Under Measure 48, universities and schools would see funding cuts to programs and possible closures if the state couldn’t spend the money either from the fund or by raising tuition to make up the difference, she said.
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