Measure 97's Failure Leaves Oregon Facing A Big Budget Deficit

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If you didn’t count the press, there were about four people at the "No On Measure 97" celebration Tuesday night.

Still, campaign manager Rebecca Tweed said she owed thanks to tens of thousands of individual Oregonians, including small businesses, farmers and health care providers.

“We’re very pleased that Oregon voters came out and defeated measure 97," she said.

Measure 97 was proposed by labor unions after legislators consistently failed to find new revenue sources. But like other statewide tax proposals before it, Measure 97 was killed by voters.

Related: Oregon Voters Approve Most Measures Other Than 97

So instead of having an extra $6 billion over the next two year budget cycle, Oregon leaders face a $1.4 billion deficit. And that's not counting the cost of newly passed measures such as Measure 98, which calls on lawmakers to spend $300 million per biennium on programs to keep high school students on track to graduate.

What do opponents think lawmakers should do about the deficit?

“I can’t speak to what options would be available, but I know that Measure 97 wasn’t the answer," Tweed said. "Without providing the guarantee of how that money would be spent, it would not have solved those issues. So we trust that those that have the responsibility to do so will do so during the next biennium.”

Over at the "Yes On Measure 97" campaign party, more than 100 people cheered as campaign manager Ben Unger told them that while their measure had been defeated, they should not give up.

“We didn’t win the election this time, but we did win the debate," he said. "Because of the work we did, no one is going to accept a proposed school cut or more expensive health care before asking: Instead of cuts, why not make large corporations pay their fair share."

Unger said he believes the Measure 97 campaign changed the conversation about the state's tax structure. The next time cuts are proposed, he suggested, legislators will at least consider finding more money, rather than just picking up the budget knife.

“We built the strongest and largest progressive coalition in the state of Oregon, and we’re going to keep fighting," he said.

There are definite fights to come. Democrat Ginny Burdick, Oregon's Senate majority leader, is hopeful the large corporations that spent tens of millions of dollars to defeat Measure 97 will help find answers for the projected deficit.

“I talk to a lot of people from the business community and they understand the problem," she said. "They understand we have a revenue shortage, and many of them are willing to do their part.

"Measure 97 had some serious flaws. That’s why it didn’t pass. But it doesn’t change the fact that people are willing to pitch in and help solve the problems.”

Republican Rep. Andy Olson, whose district includes Albany, expressed a similar sentiment, but he said businesses should decide how much they contribute, rather than politicians.

“Do we need a little bit of an increase in revenue? Yes, we do," Olson said. "Go to the source that would help contribute to this. Let them come up with the solution, instead of just shoving something down their throat like what just happened with Measure 97."

Olson said any effort to raise more money should probably be lead by a Republican — someone the business community trusts — rather than a Democratic leader such as the senate president.

Peter Courtney is the senate president. And on election night, he was not optimistic about finding new revenue.

"One side won tonight, but the other side is badly bruised and angry," he said. "And the side that won had to spend a lot of money. So I don’t sense there will be any willingness to come together at all."

Not coming together likely means cuts to the state budget, rather than new revenue to fill the gap.

Related: Measure 97 Campaign Hits $40 Million Mark After Last-Minute Contributions

State Rep. Greg Barreto, a La Grande Republican, manufactures hydraulic tillers. He thinks cuts are the way to go.

“The thing about manufacturing is, we always look at efficiency. The government never looks at efficiency," he said. "They don’t have any mechanism within the government to say: ‘Hey how can we streamline? How can we become more efficient at what we do?’ That’s what they need.”

Democrats remain in charge of the Oregon governor's office, the House and Senate. But they could not win the super majorities in both chambers that would make forcing new revenue measures through possible.

So even though it failed, Measure 97 will be a defining factor in Gov. Kate Brown’s next two years.

Brown didn’t mention the measure's defeat in her victory speech Tuesday.

She did release a statement Wednesday morning saying her budget will give priority to protecting services for children and helping families escape poverty. But, she said, lawmakers will have to make difficult cuts. She called on both sides to find common ground.