More than $300 million in funding for this biennium will be at stake this month when Oregon voters decide whether Measure 28 — a three-year, $725 million income tax increase — is an appropriate fix to the state’s budget woes.
Ballots will go out Jan. 10, and the special election will be held Jan. 28.
The Oregon Legislature referred Measure 28 to voters last summer after a tumultuous five-session budget battle that included gubernatorial vetoes and budget committee leadership changes.
In September, lawmakers passed a package of $310 million in cuts to schools and other state programs to help balance the budget — money that will be restored if voters approve Measure 28.
If passed, the measure would increase income tax rates for single and joint taxpayers, as well as corporations.
For single filings, the rate of tax on more than $6,450 in taxable income would increase to 9.5 percent from nine percent. For joint filings, the rate of tax on more than $12,900 in taxable income would also increase to 9.5 percent from nine percent.
Corporate tax rates would increase to 6.93 percent from 6.6 percent.
For the 2002 tax year, taxpayers making between $10,000 and $20,000 will pay an average of $17 more, while taxpayers making more than $200,000 will pay an average of $1,686 more.
The Legislature estimates that taxes for the average taxpayer would increase $114.
If the measure fails, the state could face deep cuts in social services, public safety and education. In the event of these cuts, the Oregon University System alone would face a nearly $27 million reduction in the 2001-03 budget, $13.2 million which would be abated by general fund reductions and $13.6 million which would be cut from programs, classes, staff and campus projects.
University students will also pay a tuition surcharge of $10 per credit for winter and spring terms if the measure fails.
Opponents of the measure are saying, however, that despite possible cuts, raising income taxes during a recession will only hurt the economy further. Fifteen Oregon legislators stated in the voter’s pamphlet that increasing taxes continues “non-essential” government spending and blocks reform.
“Your ‘No’ vote for this unnecessary tax increase will not turn prisoners loose, will not increase the size of our classrooms or force our senior citizens to choose between rent or food. Such scare tactics are not true,” the representatives said.
Taxpayer Association of Oregon Executive Director Jason Williams concurred.
“It’s economic suicide,” he said. “No one with a rational mind will believe you can tax your way
into prosperity.”
Proponents contend that Measure 28 will both restore funding and help Oregon’s struggling economy.
Yes on 28 Committee Spokeswoman Patty Wentz said education is important for economic growth, and sufficiently funding education will stimulate the economy.
“Business leaders are being publicly concerned about the ability to recruit high-quality workers for their companies in a state that is in dire economic straits,” she said. There is a “clear correlation between the education system and the economy.”