Voters receptive to taxes for schools

After voters resoundingly defeated Ballot Measure 97, a $6 billion proposed tax increase on large corporations, the measure's backers came up with a revised tax plan they hoped could gain traction in Salem. But judging from a new poll of Oregon voters released this week, the public wants to see spending cuts, too.

The new survey, commissioned by the Oregon School Boards Association, found 62 percent of Oregonians think the state has a spending problem, and 54 percent say lawmakers should close the budget gap either entirely with spending cuts or primarily with cuts and some tax increases.

That doesn't bode well for backers of another massive tax bill targeting big corporations, even if it is written to be more fair and more broadly based than Measure 97. A smaller tax plan, however, might fly.

Union and business leaders are meeting privately to try to hammer out an agreement on a plan to boost some business taxes. Business leaders said after Measure 97's defeat that they would consider taxing corporations more if public employee unions agreed to further reforms of the state's pension fund.

The state budget faces a $1.6 billion shortfall, partly as a result of rising health care expenses and partly because of Public Employee Retirement System costs.

The new survey showed a large majority of voters — 73 percent — would support higher taxes on corporations if the money was used to prevent teacher layoffs and larger class sizes, and 61 percent would support ending the "kicker" income tax rebate if the money went into a rainy-day fund for schools.

But respondents clearly favored taxing corporate profits rather than gross receipts, which Measure 97 would have done, and they wanted the proceeds of any tax increase to be guaranteed to go to schools.

While business and labor groups hash out their differences, lawmakers are working on a new business tax proposal as well as spending controls.

No matter what emerges from all of that sausage-making, it's clear there will be no magic bullet that solves the entire budget problem without spending cuts or PERS changes. There will be pain. The question is how much and where.



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