Don't Read Too Much Into Oregon's Tax Vote

Yesterday's 54 percent approval of a pair of tax hikes in Oregon yesterday has had the expected effect. The governor and legislative leadership see the vote as a signal that the public is ready for higher taxes to avoid budget cuts. Brad Shannon collected some reactions in the Olympian. Here's the governornor's statement.

... Gregoire took nourishment from the vote, saying:

"Oregon voters met the challenge of these difficult times and clearly said that schools, healthcare, public safety and other essential services cannot be forsaken..."

House Speaker Pro Tem Jeff Morris also sees it as a go ahead for tax increases.

Speaker Frank Chopp this afternoon had this, from the Seattle Times.

What I take away from it is if you come up with common sense solutions to meet the priorities of the people, the people will sustain you," Chopp said at his regular media briefing.

Let's not get carried away. Oregon voters mostly voted to increase taxes on other people - the rich and businesses. The AP pinpointed the strategy in this story. 

But Democrats who have commanding majorities in the Legislature said they were careful to target the upper 2 percent of individual taxpayers and the businesses with the biggest sales, many headquartered out of state.

Still, the measures passed largely because of high turnout in liberal Portland and Multnomah County.

For a quick primer on the two ballot issues, Measures 66 and 67, check out this Q&A from the Oregonian.

So Oregon voters went to the mailbox and voted to make their income tax more progressive. The Oregonian, which opposed the measures, notes the effect in an editorial today.

Measure 66, in particular, only further unbalances the state's shaky tax system by pushing up one of the nation's highest income-tax rates.

And they decided to increase business taxes on unprofitable businesses. (Washington businesses, profitable or not, pay B&O taxes on gross receipts.)

With an unemployment rate of 11 percent, then, Oregonians chose to stick it to the wealthy and employers. Credible economists estimate the effect of passing the two tax hikes will be to cost the state another 70,000 jobs.

Chopp acknowledged, but chose not to give much weight to, the key differences.

"They have a different tax system than we have so it's not exactly the same, obviously," Chopp added.

As Times reporter Jim Brunner writes,

...the task for lawmakers here may be more difficult since our most lucrative tax source -- the sales tax -- cannot easily be targeted toward the wealthy like Oregon's income tax.

That, and we're already heavily taxing businesses, profitable and unprofitable. Let's not forget the substantial increases in unemployment insurance and workers' compensation costs.  

Legislative leaders here should not draw much inspiration from the Oregon vote. It just doesn't travel well.