Tax Repeal Referendum Makes Ballot in Oregon

Published January 1, 2004

Oregon voters have launched an effort to repeal an income tax surcharge passed by the Oregon Legislative Assembly in mid-2003, scheduled to take effect this spring. The movement appears to have gained momentum in recent weeks, as taxpayer groups succeeded in getting a repeal referendum certified for the February 2004 ballot.

According to Steve Buckstein, president of the Portland-based Cascade Policy Institute, “the referendum has been certified for the ballot by Oregon’s Secretary of State, so Oregon voters will vote on it February 3, 2004. The vote was demanded by some 147,000 Oregonians signing petitions to refer the tax package to the ballot.

“In the one hundred year history of Oregon’s initiative and referendum system,” said Buckstein, “no measure ever collected so many signatures.”

In a poll conducted for Portland’s KGW-TV, 56 percent of respondents said they would oppose the surcharge if it made it onto the ballot. The statewide telephone survey of 464 adults was conducted November 10-17 and has a margin of error of plus or minus 4.5 percentage points.

If the tax increase is repealed by voters, the Washington Times reported, “automatic spending cuts in such areas as education and social services will be triggered to keep the 2003-05 budget balanced.”

Jason Merciers, an adjunct scholar to the Cascade Policy Institute, suggested lawmakers begin preparing now for the possibility that voters will reject the tax surcharge. “It would be best to prepare for voters repealing the increase,” said Merciers, “rather than waiting until the dust actually settles. An ounce of budget reform leadership is worth more than a pound of chaos.”

Tax Hikes Galore

In mid-August 2003, the Oregon House and Senate approved the tax hikes in House Bill 2152, and Governor Ted Kulongoski (D) signed the bill on August 27. The bill includes an income tax surcharge, a new tax on health care providers, a reduction in business tax credits, and an increase in corporate taxes. It also reduces the discount residents get for timely payment of property taxes.

The income tax surcharge is the target of the repeal effort. The legislature approved the tax increases just seven months after voters rejected–on a 55-45 vote–Measure 28, which would have imposed a $725 million tax hike.

The repeal petition signatures were submitted to the Secretary of State by Russ Walker, director of the Oregon chapter of Citizens for a Sound Economy (CSE), the citizen group leading the effort to repeal the tax increase. “We knew people were upset,” said Walker. “This had to be the easiest job on the planet, to collect signatures from people who don’t want more taxes.”

The February vote will be to affirm or deny the action of the legislature. A yes vote on the referendum will support the legislature’s tax increase, while a no vote will void the new taxes. If the repeal proponents are successful, Oregon taxpayers will be saved more than $1 billion in taxes, according to CSE.

Former U.S. House Majority Leader Dick Armey, chairman of CSE, was in Portland in late November to rally supporters going into the final stretch of the signature drive.

“This tax increase is not necessary and the citizens of Oregon will send that message to the legislature when they vote it down in February,” Armey said.

“This is not new, this should not be a hard concept for legislatures to grasp,” he continued. “Voters have been sending this message to state governments across the country from Alabama, to California, and now Oregon.”

“The American people do not want their taxes raised. Period,” he said.

Added Buckstein, “Voters know there are alternatives to Oregon’s tax and spend culture. The question is: how many times do legislators have to be told before they understand?”

John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].