The Oregon state sales tax proposal on last Tuesday's ballot had all the outward appearances of a gift horse.
If the measure had passed, the owner of a $60,000 home, who now pays $1,278 a year in property taxes, would have paid $460 less. A resident earning $30,000, who pays $1,507 in income taxes, would have seen $177 more in his paycheck. Although most retail sales would have been taxed at 5 percent, the package would have been revenue neutral, proponents argued.
The state, trying to provide what proponents called a more secure financing base for its school system, would have dropped from 13th to 26th in per-capita taxes. Improved school financing was intended to help attract high-tech jobs to replace those lost in the state's declining lumber industry.
The plan had been endorsed by the outgoing Republican governor, both parties' most likely nominees to replace him and the Democrats who control the state legislature. A $1 million advertising campaign promoted its passage.
When the ballots were counted Tuesday night, however, Oregon voters had rejected the plan by nearly 4 to 1.
That was better than the 8-to-1 ratio that dumped a 1969 sales tax proposal, one observer recalled yesterday. But it was enough for Oregon Taxpayers United, which had opposed the plan, to declare the sales-tax issue "dead in this state for the next decade" and to spur one legislative aide on the losing side to an even bleaker forecast.
"We figure at that rate 8 to 1 in 1969 and 4 to 1 in 1985 ," the aide said, "it ought to pass around August 2008."
Six times in the past 52 years, Oregon voters had spurned sales tax proposals. Since the 1969 vote, however, timber and other industries have fallen on hard times. High tech has become a source of potential salvation, but high-tech firms have sought relief from the state's high income tax and more stable funding for the public school systems coveted by their employes.
Opponents put together a coalition of rural populists, neighborhood activists, organized labor, the state Democratic Party, tax-limitation advocates and members of the local Communist Party to prevail in a campaign in which they were outfinanced by at least 10 to 1.
"There's no question that the issue of trust in the political leadership could be called into question by the vote ," said Gary Conkling, a lobbyist for Tektronix, an electronics firm that pumped $100,000 into the campaign for passage. The vote signaled that Oregonians are "undecided on these matters and that indecision . . . is really a disincentive" to business, he said.
But state Sen. Edward N. Fadeley (D) of Eugene, an opposition leader, said the bill would have benefited only businesses that are "already here and in a relatively stable business and have already got it made."
Oregon receives about 85 percent of its general fund budget from personal income and corporate excise taxes. The sales tax would have been limited to 5 percent and raised about $1.6 billion every two years, with most of the money earmarked to tax relief.
Opponents argued that it eventually would have become a "third tax," pointing out that Oregon schools already have per-pupil expenditures among the highest in the area.