Report Outlines Deep Cuts If Oregon Tax Measures Fail

By Frank Mungeam and AP Staff
December 1, 2009

SALEM, Ore. -- A new, 100-page report released by the state of Oregon details potential budget cuts if two tax measures are not passed in a January 26, 2010 special election.

Measures 66 and 67 would raise taxes on businesses and high-income households.

Proponents of the pair of tax measures say they will generate $733 million dollars in revenue. If those tax measures fail, a wide range of programs face cuts to make up a projected shortfall in the state budget.

Among the projected cuts: more than 15,000 seniors with disabilities would lose Oregon Health Plan coverage; 3,000 families with two unemployed parents would lose monthly payments; and the Department of Corrections would close three prisons and release 1,600 inmates.

One of the hardest-hit agencies would be the Department of Human Services. The department outlined 16 pages of proposed cuts to make up a 5 percent budget shortfall.

Schools, universities, prisons, state police and courts could all be cut, lawmakers said Monday after releasing the report.

The Legislative Fiscal Office, the Legislature's budget experts, compiled the list from proposals submitted by state agencies for cuts of 5 percent and 10 percent of their current two-year budgets.

"These cuts on top of $2 billion in cuts we made earlier this year would do great harm to our schools, our colleges and universities, and to core services that Oregonians are relying on in these tough times," said House Speaker David Hunt, a Democrat from Gladstone.

But a spokesman for the opposition campaign said the list was compiled to influence the election, which will be Jan. 26.

"It's an effort to create a disaster scenario that says if these measures do not pass, the world as we know it will come to an end," said Pat McCormick of Oregonians Against Job-Killing Taxes.

The $733 million that would be raised if voters approve Measures 66 and 67 amounts to about 5.5 percent of the $13.3 billion state general fund budget.

The tax increases would fall on households earning more than $250,000 on a joint return, or $125,000 for a single filer, and corporations netting more than $250,000.

Small businesses have objected to the restructured corporate minimum tax, which would be raised from $10 to at least $150 and as high as $100,000 on businesses with $100 million in Oregon sales.

Budget cuts could also affect college students by increasing tuition and forcing colleges to cut professors and staff.

Republican Nick Smith labeled the projected cuts "scare tactics" designed to convince voters to approve the tax increases.

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