Oregon's business leaders served notice Friday that they won't go quietly into the dark night of tax increases, and some $733 million that the Oregon Legislature is counting on to balance its 2009-2011 budget suddenly seems in serious jeopardy.
Tax opponents announced plans for a citizen referendum, which will require them to gather more than 55,000 signatures for each of the two measures; total costs for the petitioning and campaign are expected to top $1 million at the minimum.
The history of Oregon referendums favors the tax opponents. Since 1970, of 11 citizen referendums on the ballot, only two gained "yes" votes — approving legislative actions. Only one measure, in 1972, approved higher taxes (on cigarettes); the other, in 1974, clarified Oregon's obscenity and prostitution statutes. Most of the nine rejected measures would have imposed additional taxes.
Democratic leaders in the Legislature, who balanced a 2009-2011 budget on the two tax measures, have been preparing for a referendum, and are considering a highly controversial move to change the way referendum ballot measures are worded. For the century-plus history of the referendum, a "yes" vote affirmed the legislative measure being referred and allowed it to go into effect. Some legislators are considering reversing the process, so a "yes" vote would actually reject the legislative measure. In the case of the two tax bills under attack, Oregonians would currently be required to vote "yes" to vote no on the taxes.
While the reversal is not illogical, and could have been made at any time in the past 100 years, it may be too clever by half; its timing is suspect and it flies in the face of longtime practice. Voters already find referendums more confusing than the more straightforward initiatives they face every election cycle. Legislation making the change has not been approved, but has cleared a Senate committee.
Legislators have counted on the tax measures standing up because they don't hit the average taxpayer directly. One measure increases personal income taxes for persons earning over $125,000 annually, or $250,000 for joint filers; the other increases corporate taxes. But the word "tax" is viral in Oregon right now, and is sure to be front-and-center in advertising campaigns if the measures reach the ballot. Veteran lobbyist and political strategist Mark Nelson, who has had success in similar campaigns, is on retainer.
The referendum effort will severely test the forces of public-employee unions, school organizations, and social-service advocates, who pushed the proposals through the Democratic legislature with support from Gov. Ted Kulongoski, also a Democrat. Increases in school support and health care are among the major items funded by the tax increases.