A ballot initiative to make it harder to raise fees and many taxes in Oregon was handily defeated by voters Tuesday.

Measure 104 sought to amend the Oregon Constitution to expand the kinds of revenue increases requiring a three-fifths vote in each legislative chamber.



 

The battle over Measure 104 fell along predictable political lines.

The change was strongly supported by many Republican politicians and financed by several business interests. Just over half of the financial support for the Measure 104 campaign came from state and national realtor associations, which worried about losing any tax breaks relating to home mortgages.

Democratic leaders, including Gov. Kate Brown, and their allies in the public employee unions led opposition to Measure 104. They argued that the initiative allowed a minority of legislators to dictate tax policy, particularly when it comes to removing tax breaks of questionable value.

Since 1996, Oregon has had a constitutional provision requiring a legislative supermajority to raise taxes. But the provision left room for debate over what kind of revenue increases would be covered.

In 2015, a state Supreme Court decision opened the door to narrowing the kind of taxes covered. The Legislative Counsel told lawmakers that only increases in tax rates would require a supermajority vote.

As a result, Democratic lawmakers started looking at measures to trim tax breaks. And earlier this year, the Legislature — over fervent Republican opposition — passed a bill to prevent a new federal tax law from automatically lowering state income taxes for many Oregon businesses.

That legislative battle helped fuel business and conservative support for Measure 104. The initiative contained two major components. It said anything that raised revenue from taxpayers would be subject to the three-fifths majority. And, for the first time, it included fees under the three-fifths provision.

Fees are a staple of state government. They include everything from fishing licenses to fees paid for by many businesses for the enforcement of clean water and clean air laws.

Shaun Jillions, a business lobbyist who works with the Oregon Association of Realtors, said backers included fees in Measure 104 because they wanted to make sure that proposed clean-energy legislation would have to win a three-fifths vote. That legislation would require many industries to pay for permits allowing them to produce greenhouse gas emissions.

Supporters of Measure 104 argued that they were largely trying to ensure that the existing supermajority legislation in the Constitution is properly interpreted. They say that when voters originally approved this supermajority requirement back in 1996, they wanted it to include any bills that would raise their taxes.

“Literally, all this measure does is define [the phrase] ‘raising revenue,’” said Jillions.

Critics, however, said it would be harder for legislators to fashion state budgets that serve the majority of Oregonians if Measure 104 passed.

“We end up getting held hostage to a minority,” said Rep. Barbara Smith Warner, D-Portland, a member of the House Revenue Committee. For example, she argued that Measure 104 would make it harder to reverse tax breaks for wealthy individuals or corporations that have not demonstrated any positive economic impact.