Oregon governor to renew push for cigarette tax

By BRAD CAIN
Associated Press
Friday, March 21, 2008 11:53 AM PDT

SALEM — Gov. Ted Kulongoski plans to announce a renewed push to increase Oregon’s cigarette tax to pay for expanded children’s health care when he delivers his state-of-the-state address Friday in Portland.

Details are still being worked out, but the Democratic governor is to announce he is resurrecting an idea that was left for dead after Oregon voters trounced Measure 50, which would have raised the state tax on a pack of cigarettes by 84.5 cents.

‘‘The failure of Measure 50 last November was a setback, but I refuse to treat it as a defeat. Kids can’t wait,’’ Kulongoski said Thursday.

The cigarette tax increase is one of the key elements of Kulongoski’s annual address in which he also will outline plans to seek more revenue to upgrade Oregon’s transportation system, possibly with gas tax increase or higher state vehicle registration fees.

Additionally, Kulongoski said he will push to increase the corporate minimum tax — set at $10 in 1931 and unchanged ever since — and dedicate the funding to Oregon’s rainy day fund to shield schools, health care and other services from getting hammered in the next economic downturn.

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Kulongoski’s chief of staff, Chip Terhune, acknowledged that the shaky economy could make those revenue increases a tough sell with lawmakers.

‘‘This is ambitious,’’ Terhune said. ‘‘He is reaching hard for this one. But frankly, the governor continues to believe that making sure that children have health insurance is critical and that transportation infrastructure is in dire need of reinvestment.’’

Kulongoski also will outline further plans to combat global warming, which could include offering new incentives to encourage use of all-electric cars. He also will push for reallocating existing state revenue to provide increases in funding for K-12 and for higher education, as well as for Head Start preschool programs.

Terhune said Kulongoski’s proposals amount to a ‘‘road map’’ for the coming election year in which he will try to drum up support for those ideas before forwarding them to the 2009 Legislature for consideration.

The cigarette tax increase will reprise a long political battle in 2007 which ended with voters soundly defeating the proposal following a record-shattering $12 million TV blitz financed by the tobacco industry.

The tobacco industry’s ad campaign focused on what it called the ill-advised move of enshrining the tobacco tax in Oregon’s constitution; other ads questioned whether all of the money would go to provide health care for children.

House Democrats reluctantly placed the cigarette on the ballot as a constitutional amendment because of House Republicans’ refusal to provide the votes needed to pass the tax outright or place it before voters as a statute.

Terhune said Kulongoski’s new cigarette tax proposal will be less than the 84.5-cent-a-pack proposal that was rejected by voters.

And he said it will be written in more specific terms to make it clear that all of the money goes to children’s health programs.

In the Oregon House, where all tax proposals must originate, Democrats hold a slim 31-29 majority. In the coming election, Democrats would need at least five seats to get to a three-fifths majority in the chamber, enough votes to pass new taxes without GOP help.

Terhune said Kulongoski thinks that with a scaled-down cigarette tax hike and better-drawn proposal, the next version might win enough Republican votes to pass in 2009 to help provide health insurance to 100,000 Oregon children.

‘‘It shouldn’t be a partisan discussion,’’ he said. ‘‘His hope is that by the time we get into the session, we will be in a bipartisan frame of mind.’’