SIZEMORE v. MYERS (2001)

This ballot title review proceeding brought under ORS 250.085(2) concerns the Attorney General's certified ballot title for a proposed initiative measure, denominated by the Secretary of State as Initiative Petition 37 (2002).   The proposed measure would amend the Oregon Constitution to allow Oregon taxpayers to deduct all state, federal and local “payroll taxes” from income on their personal state income tax returns.   The measure defines “payroll taxes” to include all taxes that are calculated as a percentage of income.

Petitioner is an elector who timely submitted written comments to the Secretary of State concerning the content of the Attorney General's draft ballot title and who, therefore, is entitled to seek review in this court.   See ORS 250.085(2) (stating that requirement).   We review the Attorney General's certified ballot title to determine whether it substantially complies with the requirements of ORS 250.035(2)(a) to (d).   ORS 250.085(5).

 Petitioner challenges only the “summary” in the Attorney General's ballot title.   A ballot title must contain a “concise and impartial statement of not more than 125 words summarizing the state measure and its major effect.”   ORS 250.035(2)(d).   Here, that statement provides:

“SUMMARY:  Amends Constitution.   Currently, individuals may deduct up to $5,000 ($2,500 if married, filing separately) of federal income taxes paid from taxable income on Oregon income tax returns.   No other federal, state or local taxes calculated as percentage of personal income are deductible.   Measure makes all taxes calculated as percentage of income deductible on Oregon income tax return.   Defines taxes as FICA, Medicare, self-employment and income taxes.   Establishes phase-in for new deductions beginning 2003 with 10 percent deduction and increasing 10 percent each year.   Prohibits implementation to affect ‘kicker’ refunds due taxpayers for biennium in which measure is approved.   Prohibits legislature from altering current partial deductibility of any affected tax.   Reduces state income tax revenues and provides no replacement funds.   Other provisions.”

 Petitioner contends that one sentence in the ballot title summary is not impartial and that the summary, therefore, fails to comply substantially with the requirements of ORS 250.035(2)(d).   The sentence that petitioner challenges states that the proposed measure “reduces state income tax revenues and provides no replacement funds.”   Petitioner complains that there is nothing in the proposed measure that deals with replacement funds.   He asserts that the phrase “provides no replacement funds” is biased, because it points out a perceived flaw of the proposed measure.

 A ballot title summary must summarize the major effect of a measure.   The fact that a measure does not itself mention its fiscal effects does not preclude the Attorney General from doing so.   See Nelson v. Roberts, 309 Or. 499, 505-06, 789 P.2d 650 (1990) (permissible to inform electorate of major loss of revenue to general fund).   The phrase “reduces state income tax revenues and provides no replacements funds” summarizes the effect of proposed measure in an impartial manner.   It informs the voters that the proposed measure will cause a reduction in state income tax revenues and that this reduction will not be offset by any corresponding increase provided for in the proposed measure.   The Attorney General's summary substantially complies with the requirements of ORS 250.035(2)(d).   Accordingly, we certify the following ballot title to the Secretary of State:

AMENDS CONSTITUTION:  MAKES DEDUCTIBLE ON OREGON PERSONAL INCOME TAX RETURNS ALL TAXES CALCULATED AS PERCENTAGE OF INCOME

RESULT OF “YES” VOTE:  “Yes” vote makes deductible on Oregon personal income tax returns federal, state and local taxes calculated as percentage of income;  provides ten-year phase-in.

RESULT OF “NO” VOTE:  “No” vote rejects amending constitution to make deductible on Oregon tax returns taxes calculated as percentage of income;  retains partial deduction for federal income taxes.

SUMMARY:  Amends constitution.   Currently, individuals may deduct up to $5,000 ($2,500 if married, filing separately) of federal income taxes paid from taxable income on Oregon income tax returns.   No other federal, state or local taxes calculated as percentage of personal income are deductible.   Measure makes all taxes calculated as percentage of income deductible on Oregon income tax returns.   Defines taxes as FICA, Medicare, self-employment and income taxes.   Establishes phase-in for new deductions beginning 2003 with 10 percent deduction and increasing 10 percent each year.   Prohibits implementation to affect “kicker” refunds due taxpayers for biennium in which measure is approved.   Prohibits legislature from altering current partial deductibility of any affected tax.   Reduces state income tax revenues and provides no replacement funds.   Other provisions.

Ballot title certified.   This decision shall become effective in accordance with ORAP 11.30(10).

 DE MUNIZ, J.