Last week, Oregon voters passed a referendum increasing taxes for corporations, households earning over $250,000 and individuals earning over $125,000. Some are pointing to this as evidence of that liberal populism might turn out to be a significant counternarrative to the Tea Party/Scott Brown message of fiscal conservatism voters have sent elsewhere in the country. In fact, the architect the two tax increase measures has said, “If we can win on the issues in Oregon, we can win on the issues anywhere.”
As it happens, I’m a second-generation Oregonian who has lived in a number of different places in the state. I’m not so sure that what happened here should be read as anything other than anomalous. For one, Oregon voters have consistently over decades tried to rein-in tax increases. Structurally, the state’s tax base is pretty messed up. Oregon has no sales tax and consequently property taxes in the state have been high. Voters have passed several referendums over the years trying to reign them in, even as the state legislature was constantly finding ways to keep up revenue to sustain the growth of state government.
Tourism is a major industry in Oregon, and the state would benefit a great deal from a sales tax but historically voters have been afraid to support a sales tax, likely because they don’t trust the legislature to correspondingly lower their property taxes, rather than just pile one tax on top of another. (Voters have rejected a sales tax nine times over the years.) This was the first statewide tax increase supported by voters in the state in some 80 years. I don’t think last week’s vote means that anti-tax sentiment has ceased to be a very animating force in the state’s politics.
The other thing to note is that unions and other allied liberal interest groups spent nearly $7 million supporting the passage of this measure in a special election, significantly outspending anti-tax and business interests that were opposed. And the business interests that were opposed were practically a who’s who of Oregon business including Phil Knight of Nike and the CEO of Columbia Sportswear — and again, these are business leaders not known for meddling in politics or being staunch conservatives. I doubt that unions will be able to pull that kind of effort together again, and it’s entirely likely that voters could roll the tax increase back in an upcoming initiative in a general election with a bigger turnout and less union money being tossed around. (Oregon was the first state to have a voter referendum process and now the relatively small state seemingly has dozens of voter referendums every election.) Further, Oregon had a very hostile corporate climate before the tax increase and the fallout from the vote could have obvious negative effects on a state with high unemployment very quickly.
Another big X-factor here is Portland. Over half of the state’s population is now anchored in the rapidly growing city. And as the out-of-state influx has increased, the City of Roses has become noticeably more liberal. I’ve heard lots of Oregonians outside the city deride it as “San Francisco North” or apply similar epithets decrying the city’s leftward drift. However, Portland is such a population anchor that it’s impossible to win a statewide election without carrying one of the three counties into which the city extends. Thus, the liberal city can disproportionately force a liberal political agenda on the rest of the state, which is much more libertarian or right-of-center. Portland may be able to dominate Oregon’s politics as a result but few states have their population so centralized in one big liberal city. Again, this is a reasonably unique structural issue in the state that likely contributed to the passage of the tax increase, and one that’s unrelated to broader voter sentiment across the country.
Liberals may want to believe that Oregon’s vote means that higher taxes to support bigger government may prove popular at the ballot, but I wouldn’t bet on it.
