Gov. John Kitzhaber announced Wednesday that sin is “in” — at least when it comes to covering Oregon’s expected
budget shortfall.
Kitzhaber released a plan Wednesday to attack the projected 2001-03 state budget deficit by cutting $414 million worth of state programs and increasing beer and wine taxes by 5 cents per drink and cigarette taxes by 30 cents per pack.
He also called for repealing Ballot Measure 88, passed by Oregon voters in 2000, which allows residents to deduct federal tax payments that exceed $5,000 from their Oregon taxes.
Mindful of a faltering economy and the highest unemployment rate in the United States, Kitzhaber combined his long-awaited plan with an economic stimulus package that included $750 million in road and bridge projects and a new state lottery fund for public schools.
“This recession is national — even international — in scope, and state government can affect it only minimally,” Kitzhaber said in a statement. “However, that doesn’t mean we shouldn’t do all we can.”
Kitzhaber’s budget cuts include $44.5 million from the Oregon University System, $112 million from K-12 schools, $15.5 million from community colleges, $69.7 million from human services, including the Oregon Health Plan and $73.1 million from public safety programs, such as the Oregon State Police.
Because of the relationship between Oregon’s faltering economy and high budget deficits, both the Legislature and Kitzhaber will be doing a lot of hand wringing over these program cuts, said State Sen. Phil Barnhart, D-Eugene.
“Anything we do is painful. Raising taxes is painful, cutting budgets is painful,” he said. “We just have to find how much pain the people of Oregon can handle.”
Kitzhaber will call Barnhart and other legislators into session Feb. 8 to deal with the budget shortfall. However, the Democratic governor will face a Republican-controlled Legislature with budget plans of their own.
State Sen. Gary George, R-Newberg, predicted that the governor will have a hard time finding the votes to create the tax plan. He said any tax increase calls for an 18-vote majority in the 30-seat Senate and a 36-vote majority in the 60-seat House.
Currently, Republicans control the Senate 16 to 14 and the House 32 to 28.
George chided Kitzhaber for not supporting a bipartisan budget plan from the so-called “Gang of Five,” a Senate and House group of 3 Republicans and 2 Democrats. The group released a plan Thursday that called for $525 million
in program cuts, but called for no tax increases.
“Our folks got together to make a plan, and (Kitzhaber) put it in the trash,” George said.
If any tax increase has a chance of passing in the legislature, it is so-called sin taxes, said state Rep. Vicki Walker, D-Eugene. “There are people out there who think people who smoke and drink should pay for it,” she said.
However, the 5-cent tax will force bars and restaurant owners to raise the price of a drink, said Bill Perry, director of government relations for the Oregon Restaurant Association.
“In good times, we could have handled the (extra tax),” he said. “But this has a greater effect in an economic downturn.”