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CBPP Statement: January 28, 2010 - For Immediate Release

Statement: Nicholas Johnson, State Fiscal Project Director, on the Passage of Revenue Measures in Oregon

In approving tax increases on the ballot yesterday, Oregon voters wisely chose a balanced approach to addressing the state’s budget crisis. They rejected the claim that revenue increases would harm the economy and, instead, they acknowledged that relying on program cuts alone would hurt families and endanger the state’s long-term economic prospects.

The country has been in the worst recession since the 1930s, which has caused the steepest declines in state tax receipts on record. As a result, even after cutting programs very deeply, states continue to face large gaps between growing public needs and the resources available to meet them. About 30 states have raised taxes since the recession began in order to prevent massive cuts in such high-priority areas as education, health care, and public safety.

The Oregon results continue a trend that saw voters in Maine and Washington defeat proposals in November that would have severely curtailed those states’ ability to provide crucial services.

Oregon now is one of nine states in recent years that have raised personal income taxes on the highest-income households, and it’s also one of nine to raise business taxes. That’s the right policy for states; targeted tax increases do less harm to families and less damage to state economies than the alternative: deep cuts in services. In the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so. These states understood that they couldn’t rely solely on cuts to high-priority programs.

As state policymakers around the country weigh how best to address the growing needs of families, seniors, and businesses in this difficult economy, Oregon provides a clear example of how they can take a balanced approach that will best serve their people.