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Measure 30: Rural counties lose

Strongest pockets of resistance to tax stood to gain most and pay least.
Register-Guard
February 22, 2004


Measure 30: Rural counties lose: Strongest pockets of resistance to tax stood to gain most and pay least

By David Steves
The Register-Guard

ROSEBURG - Robert Raum has four kids in schools that face cutbacks and a brother whose family stands to lose medical coverage. He knew firsthand the downside of voting against the Measure 30 tax increase.

And when his ballot arrived, the 43-year-old restaurant cook from Sutherlin knew immediately how to mark it.

"It was a real easy decision. I voted no," Raum said Thursday while waiting for his girlfriend in the reception area of a low-income dental clinic. "They'd be taxing everyone out of the state of Oregon. It would have hurt everybody."

Raum's resolute rejection of Measure 30 and his close proximity to the reductions that may result make him the ideal spokesman for the voters of Douglas County. With a 72 percent no vote, Douglas County had the third-highest concentration of anti-tax fervor among Oregon's 36 counties when ballots were tallied from the Feb. 3 election.

And now, Douglas County stands to bear some of the more far-reaching consequences of voters' rejection of the $800 million tax package that the Legislature adopted to keep the state budget balanced.

Given the county's relatively low personal wealth, Measure 30 would have imposed a lighter tax hit here than in such well-off areas as Benton County, the only county to approve Measure 30.

Yet, the economic distress in places such as Douglas County has created more uninsured people who rely on the state for medical care. And it's meant more struggling rural schools that lack the wealth and political will of prosperous urban and suburban schools that avoid teacher layoffs and program reductions by asking voters to raise taxes locally.

The story is pretty much the same in the other counties that cast Oregon's most resounding no votes: Wheeler, Lake, Jefferson and Coos. The strongest pockets of anti-tax fervor were areas that would have paid the least but benefited the most.

"Voters sometimes have a hard time perceiving their own self-interest," Oregon State University political scientist Bill Lunch said.

"Terrible deal for rural Oregon"

To look at the numbers, Lunch said, Douglas County voters' collective self-interest may well have been served by Measure 30's passage.

The county's per-capita income is about $10,000 below the statewide average of $44,239. Measure 30's income-tax assessment imposed an increasingly high rate, from 1 percent to 9 percent, based on household income and ability to pay.

That would have made the tax impact less severe for Douglas County, where the income of 51 percent of all taxpaying households is $25,000 or less - putting them in the 1 percent to 2 percent tax-surcharge bracket. Statewide, 44 percent of households fall into this category, where the average annual tax surcharge would have been about $20.

On the flip side, those with incomes of more than $100,000 - the ones who faced a surcharge of 9 percent - comprised up to 3.4 percent of Douglas County taxpayers, but 7 percent of the households in Oregon.

Oregonians' 59 percent no vote on Measure 30 renders such who-pays-more comparisons strictly hypothetical.

But it brings the possibility of service cuts to the forefront. And in that regard, Douglas County comes close to leading the pack.

When lawmakers last year passed the tax package, they also approved a bill that would automatically reduce spending by $545 million from specific program areas should voters repeal the revenue increase. That includes cuts to public education and elimination from the Oregon Health Plan about 50,000 people in the "standard" coverage population.

On paper, the education cuts will be evenly distributed, amounting to $445 per pupil. But in reality, said Brian Reeder, the Oregon Department of Education's school-finance expert, rural districts are likely to be hit harder than urban and suburban districts when the Measure 30 cuts take effect. That's because wealthier taxpayers in Portland, its suburbs and urban areas in the Willamette Valley effectively export a portion of their income taxes to less affluent, largely rural districts.

"So the defeat of Measure 30 is a terrible deal for rural Oregon because it's hurting their schools more than it's saving them lower taxes," he said.

Health care cuts, too, are likely to be unevenly distributed, since some counties are more heavily populated than others with the low-income and uninsured who received their medical care through the Oregon Health Plan.







Tim Hicks, 24, of Lookingglass, describes his stomach pains to Scott Oldfield, a family nurse practitioner at Umpqua Community Health Center in Roseburg. Hicks, who is enrolled in the Oregon Health Plan, may be affected by program cuts necessary after Measure 30's defeat.

Photos: Kevin Clark / The Register-Guard






Oregon Health Plan hit hard

With more than 13 percent of its residents on the Oregon Health Plan, Douglas County has the sixth-highest concentration of such patients in the state, exceeding the statewide enrollment of 10 percent, and more than double the rate in more well-to-do counties such as Benton, Washington and Clackamas.

More than one-third of the OHP Standard patients in Douglas County get their medical care at the Umpqua Community Health Center.

Since Measure 30's defeat, Executive Director Linda Mullins and her staff have been poring over spreadsheets, trying to figure out how they will deal with what amounts to a 20 percent drop in funding without simply turning patients away.

"They're still going to be our patients. We will not abandon them," Mullins said. Instead, the center is looking at a $10 visitation fee and reducing hours for the medical staff.

Tim Hicks, 24, his wife and their 1-year-old son are counting on such assistance while he continues job training before seeking work as a welder.

Their OHP coverage allowed Hicks, who lives in Lookingglass, west of Roseburg, to undergo testing Thursday after three days of stomach pain. The couple said they are most grateful for the coverage when their son was born prematurely, requiring him to stay 11 days at Sacred Heart Medical Center in Eugene.

Hicks' wife, Katherine, said her firsthand experience at the receiving end of public services informed her decision to vote for the Measure 30 tax increase. But for every such yes vote in Douglas County, nearly three no votes registered.

Mullins said even some of her own health center employees helped vote it down, saying they were convinced the politicians in Salem would once again come up with the money after voters said no to higher taxes.

"They really believe the money is there and it will be found," Mullins said. "I hope they're right, but I don't see it."

Politicians face blame

In Drain, about 30 miles north of Roseburg, businessman Earnie Malchow has a simple retort for those who say Douglas County voters would have been better off if Measure 30 had passed: "That's baloney."

Malchow works as a truck driver and also co-owns and operates with his wife two restaurants and a coin-operated Laundromat in Drain. He said higher taxes would have poisoned Oregon's fragile economic recovery - one that state officials should try to nurture by reducing regulations and keeping taxes and fees low.

Malchow said small businesses such as his family's Tin Lizzy pizza parlor and La Pinata Mexican Restaurant will do far more to help his small town than a statewide tax increase would have. The two restaurants mean two fewer shuttered storefronts in a town that's struggling to recover from the closure of several area timber mills. And that, in turn, helps make Drain a more inviting stopping point for travelers, who thread their way through town along Highway 38 as they shuttle between Interstate 5 and the coast's Winchester Bay.

"I don't know how government can expect to get tax money if business can't stay open," Malchow said.

When it comes to schools, he isn't so content to wait for an economic comeback. His 12-year-old son attends elementary school in Drain, where Malchow has seen firsthand the reduction in teaching positions and the elimination of academic programs.

"I think kids down here are getting the shaft," he said.

But even as the local North Douglas School District prepares for further cuts, Malchow said voters aren't to blame - the politicians and bureaucrats in Salem are.

"They've got more than enough money to run our schools," Malchow said, between sips of coffee in the low-slung cinder-block building that houses his pizzeria and Laundromat. "For some reason, it doesn't trickle down here."

A decade of cutbacks

Before the mass departure of area logging and mill work, schools in Drain were funded well by taxes paid by timber companies on the logs they harvested. In addition, the area's mill owners generously aided the schools, donating money for a new roof at the high school, the construction of a music classroom, a pool and other facilities.

Superintendent Dan Morin charts the decline back to 1994, when the North Douglas School District's fortunes began to plunge. North Douglas High School's teaching staff dropped from 17 that year to eight. The pool was handed over to the city to run. The district eliminated choir and band.

Once vacated, the physical education program took over the music room, where the acoustic tiled walls and tiered flooring now resonate with the clank and thud of weight equipment instead of vocal harmonies and trilling flutes.

The state distributes dollars to schools on a per-student basis. As schools lose enrollment, they also lose money - a common theme for Douglas County, where enrollment at the 13 districts has dropped a combined 6 percent, or 1,000 students, in five years.

Nowhere in that county has it fallen as precipitously as in the North Douglas district, where enrollment has plunged from 532 to 384 students - a 28 percent drop.

The district won't have to reduce programs for the current school year, Morin said, but is looking at a loss of about $300,000 - about 20 percent of its state support - for 2004-05.

Morin is optimistic that voters can soften the blow of receding state dollars. Voters in the North Douglas and neighboring Yoncalla school districts are being asked to approve a merger of their two high schools. It's an idea that's been around - but resisted - since the 1960s.

Morin said the renewed effort could finally succeed, given that closing one high school and combining the two districts' students on a single campus would mean more teachers and course offerings.

In Eugene, Portland, Beaverton and elsewhere, voters have partially or fully insulated schools from cuts by passing local property- or income-tax measures. It's a model being considered elsewhere - but primarily in urban and suburban districts with the affluence and political will to pay more.

Since 1999, urban and suburban voters have passed 45 percent of their tax proposals for school operations. In rural and small-town districts, 33 percent of their "local-option" proposals have won voter approval.

Morin said the overwhelming opposition to Measure 30 has convinced him that such an effort would be futile. "It'd be a tough sell," he said. "I haven't really even looked at the option because of the conservative bent of Douglas County."

MEASURE 30 BY THE NUMBERS

This month's defeat of the Measure 30 tax proposal automatically triggers $545 million in legislatively authorized cuts to the Oregon Health Plan, public education, public safety and courts programs. Here are some figures that illustrate how Lane County and two neighboring counties voted on Measure 30, how they fare under its defeat, and how they might have been affected by its passage:

DOUGLAS COUNTY

28: Percent of voters who supported Measure 30

34th: Rank among Oregon counties

19: Number of Oregon Health Plan enrollees set to lose services per 1,000 residents

7th: Rank among Oregon counties

$34,685: Per capita income

19th: Rank among Oregon counties

576: Number of tax-filers per 1,000 whose annual Measure 30 income tax increase would have been $19 or less

34: Number of tax filers per 1,000 whose annual Measure 30 income tax increase would have been $382 or more

BENTON COUNTY

55: Percent of voters who supported Measure 30

1st: Rank among Oregon counties

7: Number of Oregon Health Plan enrollees set to lose services per 1,000 residents

35th: Rank among Oregon counties

$46,753: Per capita income

4th: Rank among Oregon counties

514: Number of tax-filers per 1,000 whose annual Measure 30 income tax increase would have been $19 or less

97: Number of tax filers per 1,000 whose annual Measure 30 income tax increase would have been $382 or more

LANE COUNTY

49: Percent of voters who supported Measure 30

2nd: Rank among Oregon counties

15: Number of Oregon Health Plan enrollees set to lose services per 1,000 residents

19th: Rank among Oregon counties

$39,885: Per capita income

9th: Rank among Oregon counties

556: Number of tax-filers per 1,000 whose annual Measure 30 income tax increase would have been $19 or less

56: Number of tax filers per 1,000 whose annual Measure 30 income tax increase would have been $382 or more

STATEWIDE

41: Percent of voters who supported Measure 30

14: Number of Oregon Health Plan enrollees set to lose services per 1,000 residents

$44,293: Per capita income

511: Number of tax-filers per 1,000 whose annual Measure 30 income tax increase would have been $19 or less

74: Number of tax filers per 1,000 whose annual Measure 30 income tax increase would have been $382 or more

- State Department of Human Services, the state Department of Revenue, the Legislative Revenue Office, the Portland State University Population Research Center and The Associated Press