Pundits like to claim California voters are anti-tax. Of course, we've raised various kinds of taxes at the state level, including the Prop 10 cigarette taxes in 1998, and the Prop 63 millionaire's tax for mental health programs passed in 2004. Still, even though our reputation remains, we've got nothing on Oregon, where no tax has been approved by statewide voters since 1930.

Until now.

Yesterday Oregon voters delivered a huge victory for progressives by approving Measures 66 and 67, raising taxes on incomes over $125,000 and on corporations to generate $733 million to close the state's budget deficit. The Oregon legislature had approved the taxes last summer, but a corporate/teabagger alliance organized to put it to voters in a referendum.

One wonders if the national media will cover this victory at all - much less at the levels of the Massachusetts Senate race. Although they'll almost certainly ignore it, the lessons for California are enormous and extremely important.

The opposition ran a well-funded campaign, led by Nike, Columbia Sportswear, and other big businesses. They were joined by Ari Fleischer's FreedomWorks and the libertarian publisher of the Oregonian, who used to be at the Orange County Register before it went belly-up. Together they ran a campaign arguing that the tax increases would worsen unemployment. But 55% of voters have rejected that, and instead showed that when a truly progressive campaign is waged, the right-wingers can be beaten. Even on taxes.

What it also shows is that progressive policies, supported by smart progressive organizing led by folks such as former US Senate candidate Steve Novick and the Oregon Bus Project, which reached out to younger voters and had a strong ground game, can beat well-funded, well-organized corporate/teabagger alliances.

Their message was deeply progressive:

These reforms protect nearly $1 billion in vital services like education, health care and public safety. These funds preserve class sizes, save jobs for teachers, provide seniors with in-home care, and provide health care for thousands of Oregonians through the Oregon Health Plan. In this time of economic crisis, we must protect those who have been hit the hardest — seniors, children and the unemployed — without putting more of a burden on the middle class.

It's a message that works nationally. And it's a message that'll work here in California. Voters don't like seeing their neighborhood schools close, or mass layoffs of teachers, or ending care for the disabled, or kicking kids off of health care. They don't want it, and are willing to raise taxes to prevent it.

All eyes now turn to Sacramento. Oregon proved, beyond any doubt, that anti-tax sentiment can be beaten by progressive taxes on the wealthy and corporations in order to save programs people like. The message could not possibly be any clearer. Voters want their programs saved, and are willing to tax the elite to do it.

Oregon netroots activist Carla Axtman may have had the best take on the victory:

Dear OR Legislators: When you take bold, progressive action--we have your back. Remember this night.

There is no reason now for California Democrats to not propose doing the same. We know that the 2/3rds rule is a huge obstacle that Oregon did not have. But if Democrats are to avoid making horrific choices like ending Healthy Families, it's time they took the fight to the Republicans, and made them defend these policies to the public by making them oppose progressive taxes.

We know a progressive message, selling progressive policy, backed by progressive organizing, can win. All California waits to see whether Sacramento Democrats know it too.

Yesterday's Media News Group papers, including the Monterey Herald, ran an article purporting to provide "the answer to where California's tax dollars went" - why we're in a budget crisis. Their answer: California overspent.

A MediaNews analysis of state spending since Republican Gov. Arnold Schwarzenegger took office in late 2003 found that he and the Democratic-controlled Legislature have spent money well beyond the rate of inflation and California's population growth -- $10.2 billion more.

Yet the programs that received most of that money are priorities that Californians broadly support or have demanded at the ballot box: tougher prison sentences for criminals, health care for uninsured children and an aging population, and a cut in the "car tax" that they pay every year to register their vehicles.

The problem, according to a report last week from the state auditor, is that Republican and Democratic politicians in Sacramento have shirked their responsibility for the past decade, papering over shortfalls that started after the dot-com bubble popped in 2001.

Like homeowners paying off one credit card with another, they used accounting gimmicks and more debt, rather than raising taxes or cutting spending, to balance the books.

It's a classic case of journalistic truthiness - some facts and accurate analysis wrapped inside a totally misleading frame. But in making this analysis, and emphasizing that the growth in state spending came from core programs - education, health care, and prisons - they have actually reinforced the argument I made nearly a year ago that we have a structural revenue shortfall. As I explained it:

The real problem is that since 1978 this state has cut nearly $12 billion in taxes. This was done during economically prosperous periods, particularly the 1990s. And that lack of revenue has piled up over the years - the state has fallen further and further behind to the point now that our state's governor is seriously proposing ending public education as we know it.

The MNG story is framed as one of "foolish politicians recklessly overspent our money! if only they'd been more careful!" But within the story itself the truth does emerge:

Schwarzenegger's first act as governor, signing an executive order to cut the vehicle license fee by two-thirds, blew a large hole in the state budget. It saved the average motorist about $200 a year but would have devastated the cities and counties that had been receiving the money. So Schwarzenegger agreed to repay them every year with state funds. That promise now costs the state $6 billion a year, or $2 billion more than the rate of inflation and population growth since early 2003.

MNG claims there was $10.6 billion in "overspending" - but $6 billion of it, or more than half, was Arnold's idiotic VLF cut. The article, which conveniently stops its history at November 2003, doesn't include the other $6 billion in tax cuts that have been implemented since 1993 - cuts that would have allowed state services to be funded at the bare-bones levels we've seen during Arnold's reign.   Read More »