- The Washington Times - Tuesday, November 25, 2003

SALEM, Ore. (AP) — Times are still tough in Oregon — and a tax increase will make them even tougher, says Dana Tokarski, a 33-year-old mother of four.

“In our family, we have a budget to keep. We would definitely feel any kind of increase in our taxes. It would make a difference,” she said.

A movement is under way among Oregon voters to repeal a tax surcharge that is set to take effect in the spring. The movement began a few months ago, when the Oregon Legislative Assembly passed the increase, but it may have gained momentum in recent weeks because of signs that Oregon’s economy is improving.

Tax opponents have until Tuesday to gather 50,000 signatures to put the repeal measure on the ballot for Feb. 3, and say they will have no trouble surpassing that number. Polls suggest a majority of voters are against the tax surcharge.

Because of a slide in tax revenue caused in large part by the bursting of the high-tech bubble, the legislature has spent the past two years cutting spending by $1 billion, resulting in shortened school years, teacher and state trooper layoffs, and cuts in benefits for the poor and the elderly.

In addition, in August, the legislature approved an $800 million tax package intended to protect schools, social services, the state police and others from another round of cuts. Under the package, signed by Democratic Gov. Theodore R. Kulongoski, a household with the median Oregon income of $41,000 would pay about $36 a year more.

Since then, revenue has begun to climb again, and unemployment dropped from 8 percent in September to 7.6 percent last month. That should be good news. But it is raising questions about whether the tax increase is still needed.

“Why take a chance by doing something irresponsible like raising taxes when things are improving?” said Russ Walker of Citizens for a Sound Economy.

But others say the upturn is not big enough to make up for the tax revenue that will be lost if the surcharge is repealed.

“It’s like finding a $10 bank error in your favor when you are trying to put together the money to buy a new car,” said Republican state Rep. Lane Shetterly.

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

Oregon has no sales tax. The downturn has led to talk of instituting such a tax, but the idea has not gotten very far. In fact, Oregonians have shown little inclination to raise any taxes over the years, which analysts have attributed to a belief that government wastes money.

So surcharge supporters will have to convince voters that vital services are at stake, said political analyst Len Bergstein.

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

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