While Washington lawmakers and Governor Gregoire contemplate the prospect of tax hikes to help close a $2.6 billion budget shortfall, Oregon voters have upheld the Oregon Legislature’s decision to boost corporate and personal income taxes to the tune of over $730 million.

Oregon voters, balloting by mail, on Tuesday approved a pair of referenda, both by a margin of better than 53-47.  Measure 66 will raise the margin income tax rate on personal income above $125k for individuals and $250k for couples, producing $472 million for the current biennium.  Measure 67 boosts business taxes by $261 million this biennium. This includes raising the corporate income tax.The Oregonian said voters “bucked decades of anti-tax and anti-Salem sentiment” and headed off cuts in education and other public services. The Register-Guard in Eugene called it an historic vote, the first time state voters have approved a general tax increase in 80 years.

In Olympia, folks on both sides of the aisle are taking note of the Oregon vote, particularly since tax hikes remain a live option on this side of the border. Washington lawmakers and Governor Gregoire fixed last year’s deep $9 billion budget hole without new taxes, but the Democrats indicate that they’ll probably need new revenue to plug a new $2.6 billion shortfall this session. Republicans are adamant that tax increases would hurt families and businesses and stall the recovery.  Democrats say essential services must be preserved.

Governor Gregoire issued this short statement today:

“Oregon voters met the challenge of these difficult times and clearly said that schools, healthcare, public safety and other essential services cannot be forsaken. It is gratifying to see that the public understands the importance of preserving services to the most needy and providing education to the next generation–especially now when those efforts are most needed.”