Posted on 09/18/2002 10:46:56 AM PDT by Jack Black
Senators deal, put tax increase on ballot
HARRY ESTEVE
SALEM -- Spurred by a desire to quit and go home, Senate leaders brokered a deal Tuesday night that could bring the Oregon Legislature's record-setting fifth special session to an end.
The Senate voted 18-10 to send a proposed three-year income tax increase to a statewide vote in January. The House and the Senate were pushing late Tuesday toward adjournment, possibly by early today.
"I think we have good momentum to close out this chapter," said House Majority Leader Karen Minnis, R-Wood Village.
The linchpin of the deal was the temporary tax increase measure, slated for a special election Jan. 28. The measure, approved by the House on Monday, initially failed in the Senate but was revived Tuesday.
Because it proposes a tax increase, the measure required a three-fifths majority -- or 18 Senate votes -- to pass. A handful of senators said they had changed their "no" votes since Monday's failed attempt, including Sens. Rick Metsger, D-Welches, and John Minnis, R-Wood Village.
"We're at a place where it's time to bring it to closure," said Minnis, who had pushed to make more cuts in state spending instead of proposing a tax increase. "Everybody's puffing their chests and getting in each other's face. There's a point at which you say enough is enough."
For the 17th straight day, lawmakers railed at each other about the correct way to fix a $482 million shortfall in the state's $12 billion budget for 2001-03. By late Tuesday, it was clear that the only way out was to approve a package that includes some budget cuts, some debt and the proposed tax increase.
If approved by voters, the tax measure would raise $315 million in this budget year and an additional $412 million for the 2003-05 biennium. If not, state agencies will be asked to cut more than $300 million from their budgets.
"We've given Oregonians an opportunity to preserve the fabric of the state or to rip it apart," said Senate Minority Leader Kate Brown, D-Portland.
With the measure, the top personal income tax rate of 9 percent would increase to 9.5 percent, and the corporate tax rate of 6.6 percent would go to 6.93 percent. The increases would remain in effect for three years.
Accompanying the tax measure, however, is a bill that would impose across-the-board budget cuts that could lead to early school closures, prison closures and the layoffs of dozens of state police troopers if the measure fails.
Additionally, lawmakers worked on a bill that would borrow $150 million against Oregon's share of the national tobacco settlement and another that would make selective cuts of about $50 million in state programs. House members staged a failed attempt to increase the borrowing bill to $200 million to give back $50 million to schools that was cut when Gov. John Kitzhaber vetoed a school financing bill last month.
There was some concern that the size of the borrowing bill could become an issue that prevented adjournment. And there were concerns that the bill outlining more than $300 million in cuts would not get enough votes, which could upend the overall compromise.
Although it was still being worked late Tuesday, the proposed agreement lands between two ideologically distant factions. One group hoped to use the current budget crisis as a chance to whittle away at state-financed programs they think are wasteful or unnecessary.
The other claimed that budget cuts would deal a devastating blow to programs that aid the needy, sick and elderly and would cause widespread layoffs of teachers, state police troopers and prison guards.
The final package appears to be a middle ground steered by realists who argued that neither side had enough votes to make cuts or raise taxes on its own.
The Senate also passed a bill that would eliminate the taxes Oregonians pay on inheritances, essentially tying the state's tax rules to the federal code. The bill, which was passed by the House on Monday, is expected to cost the state about $5 million in this budget year.
Tuesday's breakthrough came at what appeared to be an apex of frayed tempers and frustration in the Senate. After derailing what might have been the go-home bill Monday night, the chamber reconvened Tuesday morning with a plan to vote on a proposed one-year income tax increase that would not go to voters.
But action on the bill quickly stalled, and members milled about the Senate floor in confusion. At one point, Senate President Gene Derfler, R-Salem, said he might gavel proceedings to a close and send everyone home for several days to "let things cool off."
"Everyone's mad at each other," he said.
Then came a rumor that the Senate might quit until January, leaving the budget hole to sit while senators awaited the election of a new governor and new legislators.
Those suggestions appeared to galvanize Republican and Democratic leaders into a round of hard-nosed bargaining, in which each side guaranteed a set number of votes to ensure passage of the tax measure. At one point, Senate Majority Leader Dave Nelson, R-Pendleton, was heard telling Senate Democrats that Republicans would not provide the one more vote needed to pass the cuts bill.
"You've got to give us one more," Nelson said before heading back behind closed doors to meet with his Republican colleagues.
Lawmakers said they are eager to leave, not only because they want to return to their jobs, families and, for some, their re-election campaigns, but also because the longer they stay, the more difficult it becomes to reach agreement. And the usual partisan squabbling has spread to members of the same party taking on one another.
"It's just a difference in philosophies that has fanned out of control," said Rep. Carl Wilson, R-Grants Pass, explaining why it has taken so long to find an exit strategy. "That comes from being in one place too long, looking at each other too long. People get their backs up."
Steven Carter of The Oregonian contributed to this report. Harry Esteve: 503-221-8226; harryesteve@news.oregonian.com
I am outraged by the caving of the Rs. Some, many, held firm to the end. But enough caved to give them their tax raise. This is absurd. Remember, they already have $1 billion more than last year in the budget. But NOOO that's not enough, they need ANOTHER $450 Million to fund OPR, DEQ, Culture Commisssion, Womens Rights Charter, Homeless Outreach, and of course the Oregon Health Plan.
I remember the three year gas tax increase they were going to phase in. It was going to be two cents the first year, an additional two cents the second year, and one additional cent on the third and final year. It required a 2/3 vote. It turns out that they had to have a 2/3 yes vote to create the new fuel tax, but could unilaterally extend it forever once passed. I don’t know if they ever arrived at the final one-cent year. I know they extended the two-cent years a couple of times.
Oh well, just be glad you’re not in CA. Or, at least, that you are surrounded by fewer Californians than you would be if you were in CA. Ha.
Second only to Washington State as of the August numbers released yesterday!
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