In Oregon, voters approve higher taxes on businesses and the rich

Oregon voters OK tax hikes on wealthy, businesses

PORTLAND, Ore. — Oregon voters on Tuesday approved tax hikes on businesses and the wealthy, allowing legislators to avert budget cuts they said would have affected schools and services for the poor and elderly.

Measure 66 raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Measure 67 increases business taxes. Fifty-four percent of voters had approved both measures with more than 80 percent of the vote counted late Tuesday.

It was a victory for public employee unions and the Democratic majorities in the Legislature that imposed the taxes last year, arguing that deep cuts in school aid and social services were the alternative for a state facing declining revenues due to the recession.

It was a defeat for business groups who sponsored a referendum drive to put the taxes to a statewide vote, saying they would cost a state with 11 percent unemployment even more jobs.

The revenue from the new taxes, $727 million, is expected to account for about 5.5 percent of the general fund in the next two-year budget.

“We know now that Oregonians heard the message of what these measures were about — supporting the most vulnerable,” said Elana Guiney, a spokeswoman for the pro-tax group Vote Yes for Oregon.

The most recent reports had labor outspending business in one of the state’s most expensive issue campaigns. Common Cause of Oregon said Guiney’s group raised $6.85 million to the $4.55 million raised by Oregonians Against Job-Killing Taxes.

“The bottom line is the unions bought the election,” said State Republican Chairman Bob Tiernan. “It’s going to be a sadder day as more businesses leave the state and more don’t want to come here.”

Passage of the measures spares the Legislature a month of budget-cutting when it starts a four-week session Monday.

“Even with this result, we still have some challenges before us,” Gov. Ted Kulongoski said in a statement. “It is going to be a slow growth recovery from this recession for Oregon and the entire nation.”

Approval of the two tax increases ran counter to the state’s history of turning down tax increases.

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. The increases will be reflected in returns filed this year.

The Democrats also have said that they trimmed budgets hard last year and drew on reserves and stimulus dollars as part of a budget-patching package that included the tax increases.

The state’s top income tax of 9 percent rises to 10.8 percent on taxable income above $125,000 for single filers, $250,000 for joint filers, and to 11 percent for those with twice those amounts in taxable income.

Prominent among the business tax increases is one that affects many companies: The annual minimum $10 — unchanged since it was created in the 1930s — goes up to $150.