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Business leaders fear tax measures will discourage growth

by AP and KGW.com Staff

kgw.com

Posted on January 26, 2010 at 7:34 AM

Updated Wednesday, Jan 27 at 1:17 PM

PORTLAND, Ore. -- Oregon voters approved two tax increases in a special statewide election Tuesday.  With more than 1,000,000 votes officially counted statewide, both Measure 66 and Measure 67 were being approved by voters, raising taxes on individuals and businesses.

With 96 percent of the expected vote counted, Measure 67 was passing by a a 53 to 47-percent margin and Measure 66 was passing by a 54 to 46-percent margin.

See: Complete state results

Supporters were quick to praise the results as a vote for education and for progress. The outcome was "a total relief," said Gubernatorial candidate Bill Bradbury. "If Measures 66/67 had failed, the budget next time was totally ugly!"

"A victory on both these measures sends a strong message on how we value services in this state," said Tom Chamberlain, President of the Oregon AFL-CIO.

Opponents of the measures expressed concern that the tax increases would hurt local businesses and the Oregon economy. "We think that's pretty egregious to charge someone to balance the state budget on the backs of folks that aren't making a profit," said Barry Bushue of the Oregon Farm Bureau. "If they are making a profit, they already pay taxes."

 A Democratic legislative leader, Senate President Peter Courtney, said he was, just in case, preparing a statement acknowledging defeat just before the results were reported Tuesday.

"This is a tax vote?" he exclaimed later when the victory was evident. "This is indescribable ... It's Oregon being Oregon."

Courtney's counterpart in the House, Speaker Dave Hunt, says the session will focus on legislation to spur job creation and to help people hurt by the slump that has boosted the unemployment rate to 11 percent and driven record numbers of people to seek aid such as food stamps.
 

MORE: Supporters, opponents react to vote

The vote on Measure 66 and Measure 67 attracted national media attention, including a report on National Public Radio, as another measure of how Democrats will fare in the mid-term elections this fall. The two sides combined to spend more than $10 in advertising during the campaign. Turnout for the special election was expected to surpass 60 percent.

Business leaders and Republicans were glum. Pollster Tim Hibbitts' polls suggested a closer vote, and for much of the voting period, liberal Multnomah County was slow to mail in and drop off ballots, raising the hopes of the tax opponents.

It was a victory for public employee unions who were the spearhead of the campaign for the taxes and raised enough money to outspend the opponents.

A Common Cause analysis put their fundraising advantage to date at $6.85 million to $4.55 million in one of the state's most expensive campaigns.

"The bottom line is the unions bought the election," said State Republican Chairman Bob Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."

The revenue from the two measures is expected to account for about 5.5 percent of the state's general fund budget over the next two years.

The Associated Press contributed to this report.

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