In January, while right-wing pundits were crowing about Scott Brown’s victory in Massachusetts, voters in Oregon sent a different message to the nation: Tax the rich.
Oregon is dealing with one of the largest budget shortfalls in its history—$4.4 billion. It’s a familiar story, occurring in state after state: As the ranks of the unemployed rise, income taxes decline; as foreclosures mount, property taxes plummet. During the last 35 years state governments have cut taxes on corporations and the wealthy, and put the majority of the tax burden on the middle and working classes. Now most states find huge holes in their budgets.
States are required by law to balance their budgets. In Oregon last year, the state legislature decided that the large shortfall should not be filled entirely by budget cuts that would further endanger the state’s most vulnerable residents.
They decided to raise $727 million, around one-sixth of the shortfall, through increasing taxes on some of the wealthiest Oregonians and corporations operating in the state. Originally big business was at the table, helping the Democratic-run legislature craft new tax proposals. But then the corporate lobbyists demanded a temporary tax proposal that would have put more of the burden on small businesses rather than large corporations, and would have raised taxes on all Oregonians rather than just the top 3 percent.
Legislators held their ground and passed HB 2649 and HB 3405. HB 2649 slightly raises taxes on the top 3 percent of earners in Oregon and exempts 270,000 unemployed Oregonians from taxes on some unemployment benefits. HB 3405 increases the corporate minimum tax in Oregon, which has been on the books since 1931, from $10 to $150, and slightly raises tax rates on upper-level profits.
After the tax bills passed through the legislature, the chambers of commerce and big business associations across the state banded together with anti-tax teabaggers to get enough signatures to place the bills onto a special election ballot. HB 2649 became Measure 66 and HB 3405 became Measure 67.
Calling themselves Oregonians Against Job-Killing Taxes, the “No on 66 and 67” campaign—coffers filled with donations from Nike billionaire Phil Knight and Columbia Sportswear CEO Tim Boyle—poured millions of dollars into misleading advertisements proclaiming the horrors of raising taxes during a recession.
Oregon voters didn’t buy it. Thanks to hundreds of volunteers who spent hours knocking on doors and making phone calls to urge a yes vote, both measures passed by approximately 54 to 46 percent (about 100,000 votes).
According to some analysts, liberal Portland and surrounding Multnomah County imposed a yes vote on the rest of the state—because they represent about a third of the state’s overall population. While it is true that turnout in Multnomah County, where voters approved the measures by around 71 percent, was crucial to the victory, a close look at county-by-county tallies tells a different story. Many rural and traditionally conservative counties split down the middle on the vote.
Measures 66 and 67 represent the first time that Oregon voters have approved an increase in income tax rates in over 80 years.
The passage of the tax measures in supposedly anti-tax Oregon is an indication that people are sick of budget cuts, and are ready to make the rich pay their fair share. According to Kevin Looper, the “Yes” campaign manager, “When we started doing focus groups, it was amazing to hear voters demanding to know where the banks were on these measures—because they wanted to be on the opposite side.”
While Oregon’s tax system is still far from equitable, this tax increase on some of the wealthiest Oregonians has prevented $285.5 million in K-12 education cuts. This is enough to pay for 1,610 teachers and 1,057 hourly employees. In a state that ranks 49th in class size, the passage of these tax measures has saved Oregon’s schools from falling into the abyss.