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'What Oregonians said today is they believe in public education and vital services.'
Salem (4 Feb. 2010) - Voters in Oregon have bucked a longstanding nationwide trend against higher taxes by approving an increase in the rates paid by corporations and wealthy citizens in order to protect schools and other public services funded by the state.
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The landmark vote is expected to have repercussions across the United States and beyond as governments everywhere try to grapple with growing deficits following decades of tax cuts that have disproportionately benefited the wealthy and seen the share of revenues contributed by corporations decline precipitously.
Approved by a margin of 54% to 46%, the referendum adopted Measures 66 and 67 which will have the effect of raising taxes on all households with taxable income above $250,000 and also of setting minimum taxes for corporations as well as applying escalating tax rates to upper-level corporate profits.
The outcome of the vote was a huge relief for educators and for legislative leaders who were facing an estimated $727 million budget shortfall over two years if the measures had failed.
"We're absolutely ecstatic," said Hanna Vaandering, vice-president of the Oregon Education Association, the statewide teachers' union. "What Oregonians said today is they believe in public education and vital services."
The double victory is the first voter-approved statewide income tax increase anywhere in the United States since the 1930s.
The last time voters in Oregon approved a tax increase of any kind was in 2002, when they consented to raise tobacco taxes to help pay for the Oregon Health Plan. Twice previously in recent years they rejected income tax increases.
The victory was also a validation of the strategy by Democratic lawmakers to focus on the wealthy and on corporations to pay a fairer share of taxes. Campaign ads targeted banks and credit card companies, showing images of well-heeled corporate leaders in private jets.
Supporters of the tax increases received strong backing from teacher and public employee unions. Opponents were led by a wealthy coalition of business organizations and business leaders such as Phil Knight of Nike and Tim Boyle of Columbia Sportswear.
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