Vote on tax increase worries schools

Polls show voters aren’t fond of a tax package they may vote on Feb. 3.

CHARLES E. BEGGS
The Associated Press
December 1, 2003

The early months of state government in 2004 might seem like a year’s leap backward if the 2003 Legislature’s tax increase goes to voters and is defeated.

Lawmakers this year balanced the new $11.5 billion, two-year budget with about $800 million in higher taxes, mostly from a temporary income-tax surcharge.

But voters already had said in January — and firmly — that they didn’t want higher taxes. They trounced a $313 million tax boost, forcing cuts in school support, social services and other programs in the previous budget.

Legislators put that measure on the ballot after slashing spending in five special sessions in 2002 by more than $1 billion as revenue dropped.

Now it appears almost certain that the new tax package is headed for a special Feb. 3 election; early polls indicate most voters don’t like it.

Tax foes last week turned in, by their count, almost three times the 50,000 petition signatures needed to force an election. Officials have until Dec. 9 to verify the signatures.

If the tax package fails, it will force another round of cuts in funding for schools, benefits for the elderly and the needy, for law enforcement and other programs.

“The litany goes on and on,” a dispirited Senate President Peter Courtney said last week after the petitions were filed.

“This is going to be another tough holiday.”

Defeat of the tax increase would trigger $544 million in specific spending cuts. That would be painful enough. But even more spending reductions would be needed — about $240 million — to fill the $780 million budget gap that would exist without the tax increase.

Gov. Ted Kulongoski would have to make across-the-board cuts — all that the laws allow him to do — or lawmakers would need to hold a special session to weigh other options.

Tax opposition leader Russ Walker has said he expects legislators would meet and juggle the budget to prevent, for example, a big reduction in school aid.

Courtney said he doesn’t see what good another session would do, after it took lawmakers almost eight months in their record-length session this year to agree about the budget and taxes.

“We tried to do the best with the resources we had,” he said. “It’s hard to get a majority to agree on anything.”

Schools and social services for the needy would take the big hits under a cuts-only solution if the higher taxes were to fail. State school support would lose more than $400 million, shaving spending to the level approved by the 1999 Legislature.

The $5.2 billion approved for schools for 2003-05 is the same as for the last budget. Schools could get up to $100 million more next year, but only if state revenue rises by enough.

“School districts obviously are anxious,” said John Marshall, legislative director for the Oregon School Boards Association.

“We’re encouraging districts to plan budgets not just for next year but over the next 18 months or so, so they can preserve resources for core programs,” he said.

Marshall said that a defeat of the tax measure and resulting cuts would hurt not only schools but also economic recovery.

“Why would you want to move your business to Oregon if schools were on a downward slide?” he said.

Rejection of the taxes would carve about $260 million from the human services budget, including more than $200 million from the Oregon Health Plan.

Lawmakers put enough money into the plan to cover 55,000 low-income people to restore services that were eliminated last year, including mental-health and drug and alcohol treatment.

Also restored was money for in-home assistance for 1,200 elderly and disabled people.

Those changes haven’t yet occurred because they depend on federal approval under Medicaid rules. The potential new funding reductions likely would again jeopardize the services.

“The Legislature put together a bare-bones plan,” said Ellen Lowe of Portland, a longtime lobbyist for the needy.

Failure of the tax boosts “would pull the linchpin that allows at least a semblance of stability for the poor and disabled,” she said.

She said that the state also often loses federal matching money if it cuts funds for social-service programs.

Rejection of the tax increase also would — once again — reduce money for state police crime labs, for the court system and for court-appointed lawyers for the poor.

State police initially lost 85 forensic lab jobs under cuts in the last budget; lawmakers this year restored funds for 57 of them.

Prosecutions for most property crimes halted for four months earlier this year because of cuts in indigent defense funds, and courts around the state were closed on Fridays to save money.

The tax boost’s defeat would slash almost $26 million from state funding of county corrections programs. That mainly is supervision of 30,000 felons on parole and probation.

State law requires counties to operate the largely state-funded programs, except that any more cuts in funding would give them the option of turning the duties back to the state.

Ginger Martin, community corrections chief for the state Corrections Department, said that she expects some counties would choose to no longer run the programs if they got any less state money.

And the state doesn’t have administrators to operate local field offices, she said.