LOS ANGELES - Oregon Gov. Barbara Roberts said yesterday that she has ruled out calling a special session of the state Legislative Assembly to raise taxes after voters decisively rejected a 5% sales tax Tuesday.
Measure 1, the proposed constitutional amendment to create Oregon's first sales tax, was defeated by a 75%-to-25% margin in unofficial results released yesterday afternoon by the office of the Oregon secretary of state.
This was the eighth time since 1930 that Oregon voters have defeated a sales tax proposal. Oregon is among five states - the others are Alaska, Delaware, Montana, and New Hampshire - that do not have a general sales excise tax, according to Moody's Investors Service.
Proponents of the sales tax said it was needed to raise about $1.3 billion a year for public education to meet obligations mandated by Measure 5, which voters approved in 1990. The initiative lowered property tax rates and required the state to replace revenues lost by elementary, high school, and community college districts.
In a statement, Roberts said she has "put together two previous Ballot Measure 5 budgets, and will start now to build the best budget possible for 1995-97 under existing revenues."
In refusing to call for a special legislative session. Roberts said she would seek a moratorium on any major new tax proposals.
In a telephone interview yesterday, Oregon Treasurer Jim Hill said he was not surprised by the voters' decision, saying "the question now becomes where do we go from here ... to protect the state's bond rating."
Hill said the full impact of Measure 5, which is being phased in over five years, will not be felt until the 1995-1997 biennium.
Because the state has balanced two biennial budgets since Measure 5 was passed - 1991-1993 and 1993-1995 - Hill said, "we have a budget for the next two years. I don't think there will be an immediate rating reaction. But we will have our backs against the wall in our next legislative session."
Catherine Fleischmann, a Moody's assistant vice president and lead analyst for Oregon, said yesterday the rating agency remains "concerned" about how Oregon will pay for its Measure 5 funding requirements now that a sales tax option has been eliminated.
Oregon's outstanding general obligation debt is rated Aa by Moody's, AA-minus by Standard & Poor's Corp., and AA by Fitch Investors Service.
Fleischmann said Oregon officials "have until July 1995 to work out a solution. That gives them a little cushion; they are not under the gun immediately."
But Fleischmann said the current biennium is "safe" because budgeting for it is "already in place" without counting on sales tax revenues. "We do see [that Measure 5] will remain a major challenge."