Oregon voters OK tax hikes on wealthy, businesses

Oregon voters have approved two measures raising taxes on businesses and the wealthy, averting budget cuts legislators said would have meant larger classes in the schools and less help for the poor and the elderly.

Voters in Tuesday's special election approved Measure 66, which raises rates on people earning well above six figures, and Measure 67, which increases business taxes.

With 80 percent of the expected votes counted, both measures had 54 percent approval.

The Oregon Legislature approved both tax increases last year, and business groups sponsored a referendum drive to put them to a statewide vote.

The campaign pitted public employee unions warning of cuts in schools and social services against many, though not all, of the state's business groups, who said the taxes would cost a state with 11 percent unemployment even more jobs.

The most recent reports had labor outspending business in one of the state's most expensive issue campaigns.

"We know now that Oregonians heard the message of what these measures were about - supporting the most vulnerable," said Elana Guiney, a spokeswoman for the pro-tax group Vote Yes for Oregon.

The revenue from the new taxes, $727 million, is expected to account for about 5.5 percent of the general fund in the next two-year budget. Passage of the measures gives the state Legislature a breather when it goes into a monthlong session starting Monday.

The returns reflected Oregon's political split, with Portland and Multnomah County, a liberal bastion, supplying a large vote in favor, while rural counties and especially those in Eastern Oregon voting against.

The results could give legislators in other states hints about whether they can ask taxpayers for help in repairing ravaged budgets.

Approval of the two tax increases also ran counter to the state's history of turning down tax increases.

But Democrats who have commanding majorities in the Legislature said they were careful to target the upper 2 percent of individual taxpayers and the businesses with the biggest sales, many headquartered out of state.