Title: Straube v. Myers

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED:  March 23, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
GARY J. STRAUBE
and NATHAN ROBERT RIETMANN,
Petitioners,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
TERRENCE W. McEVILLY,
Petitioner,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
BILLY DALTO,
Petitioner,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
(SC S53128 (Control); S53133; S53134)
En Banc
On petition to review ballot title.
Submitted on the record January 30, 2006.
James N. Gardner, Gardner and Gardner, Portland, filed the
petition on behalf of petitioners Straube and Rietmann.  With him
on the petition was Lynda N. Gardner.
James M. Brown, Salem, filed the petition on behalf of
petitioner McEvilly.
Billy Dalto, in propria persona, filed the petition for
himself.
Anna M. Joyce, Assistant Attorney General, Salem, filed the
answering memorandum on behalf of respondent.  With her on the
memorandum were Hardy Myers, Attorney General, and Mary H.
Williams, Solicitor General.
RIGGS, J.
Ballot title referred to Attorney General for modification.
RIGGS, J.
This ballot title review proceeding brought under ORS
250.085(2) concerns the Attorney General's certified ballot title
for a proposed initiative measure that the Secretary of State has
designated Initiative Petition 112 (2006).  The proposed measure
seeks in part to provide health insurance to children in Oregon
under the age of 19, using funds collected from taxes on tobacco
products.
Petitioners are electors who timely submitted comments
to the Secretary of State concerning the Attorney General's draft
ballot title. (1)  They therefore are entitled to seek review
of the resulting certified ballot title in this court.  ORS
250.085(2).  We review the Attorney General's certified ballot
title to determine whether it substantially complies with the
requirements of ORS 250.035(2).  ORS 250.085(5).  Because we
conclude that it does not, we refer the ballot title to the
Attorney General for modification.
The measure proposes several statutory changes.  It
states that it would create an "Oregon Kids Program" in order "to
provide health insurance coverage for all uninsured children
under 19 years of age." (2)  The Oregon Kids Program would seek
to increase the number of children served under the state medical
assistance program and the State Children's Health Insurance
Program, and to increase the number of children receiving health
insurance coverage under the Family Health Insurance Assistance
Program (FHIAP).  The measure also would create an Oregon Kids
Program Fund, separate from the state General Fund, for the
purpose of collecting funds so that the Department of Human
Services (DHS) could implement and administer the Oregon Kids
Program.  Under the measure, DHS then could use the funds to pay
for the health insurance costs of children enrolled in FHIAP. 
The measure also would require DHS to seek federal financial
assistance for the Oregon Kids Program.
The proposed measure would fund the program by
increasing taxes on tobacco products in two ways.  Cigarette
distributors would pay a tax on each cigarette distributed,
starting at 20 mills in July 2007, increasing to 25 mills in July
2008, and increasing to 30 mills in July 2009.  The money
collected under that tax would be distributed as follows: 45
percent to the Oregon Health Plan Fund (five percent of which
must be used to fund dental services for persons aged 19 or
older); 40 percent to the Oregon Kids Program Fund; five percent
to the Tobacco Use Reduction Account; four percent for
administration of the FHIAP; three percent to the Oregon State
Police for cigarette tax enforcement; and three percent to DHS to
increase the reimbursement rate paid to physicians under a fee-for-services program described in ORS 414.725.  
The proposed measure also would increase direct taxes
on the consumers of tobacco products by amending an existing
statute, ORS 323.505.  Currently, those taxes are fixed at a rate
of 65 percent of the wholesale price of the tobacco product (not
to exceed 50 cents per cigar).  ORS 323.505(2).  The measure
would raise that tax to 70 percent of the wholesale price in July
2007, to 75 percent in July 2008, and to 80 percent in July 2009
(again, with that tax not to exceed 50 cents per cigar).  As to
those revenues, the Oregon Kids Program would receive 7.14
percent between July 2007 and July 2008, 13.33 percent between
July 2008 and July 2009, and 18.75 percent starting in July 2009.
The Attorney General certified the following ballot
title for the proposed measure:
"PROVIDES HEALTH INSURANCE COVERAGE
TO ALL CHILDREN UNDER AGE 19
BY RAISING TOBACCO PRODUCT TAXES
"RESULT OF 'YES' VOTE: 'Yes' vote provides health
insurance for all children under age 19 funded in part
by increasing tobacco taxes; funds other tobacco and
health related programs.
"RESULT OF 'NO' VOTE: 'No' vote retains current
health insurance programs that provide health care to
particular low-income and other qualified children;
maintains tobacco taxes at current levels.
"SUMMARY: Under current law, the state provides
health insurance coverage to children who are eligible
under three state-operated medical insurance programs. 
Measure creates the Oregon Kids Program to provide
health insurance coverage for all uninsured children
under age 19 and creates the Oregon Kids Program Fund,
which retains interest earned by program and
appropriates money for program administration.  Measure
creates process by which uninsured children obtain
insurance coverage through one of three insurance
programs: the state medical assistance program, the
State Children's Health Insurance Program, or the
Family Health Insurance Assistance Program.  Program
funded by new tax on tobacco product distributors and
increasing taxes on wholesale price of tobacco
products, and by requiring application to the federal
government to obtain federal financial participation. 
Other provisions."
Petitioners challenge the caption, the result
statements, and the summary of the certified ballot title.  The
Attorney General concedes that he erred in certifying the ballot
title in two related respects:  The certified caption and summary
are identical to those found in the Attorney General's original
draft ballot title.  After he had received and considered
comments on that draft ballot title, the Attorney General
indicated that he would modify the caption and the summary. 
However, through a clerical error, the Attorney General
mistakenly certified the original caption and summary rather than
the modified ones.  The Attorney General therefore asks that this
court remand the case to him to correct those mistakes.
In addition to the foregoing, various petitioners raise
other arguments, some of which have merit, as we discuss below.
CAPTION
This court's task is to determine whether the ballot
title substantially complies with the requirements of ORS
250.035.  ORS 250.085(5).  The caption is a statement of not more
than 15 words that reasonably identifies the subject matter of
the measure.  ORS 250.035(2)(a).  Analysis of the subject matter
of the proposal must be based on the text of the proposed
measure.  See Earls v. Myers, 330 Or 171, 175, 999 P2d 1134
(2000) (this court examines text of measure to determine whether
caption accurately states subject matter of proposed initiative
measure).  The ballot title must not be worded in such a manner
as to mislead the voters.  See, e.g., Mabon v. Myers, 332 Or 633,
637, 33 P3d 988 (2001) (caption must identify subject matter of
proposed measure in terms that will not confuse or mislead
potential petition signers and voters).
As stated above, the certified caption (3) provides:
"PROVIDES HEALTH INSURANCE COVERAGE
TO ALL CHILDREN UNDER AGE 19
BY RAISING TOBACCO PRODUCT TAXES"
Petitioners argue that the caption fails to comply with
the requirements of ORS 250.035(2)(a).  Petitioner McEvilly
contends that the subject of the measure is increased tobacco
taxes and that the caption's emphasis on "health insurance to all
children" is misleading.  We disagree with petitioner McEvilly's
first point.  The Attorney General's reference in the caption to
the programs that the increased tax will fund, as well as to the
tax increase itself, substantially complies with the requirement
that the caption "reasonably identify the subject" of the
measure, ORS 250.035(2)(a).  We agree, however, with petitioner
McEvilly's argument that the caption's reference to providing
health care to children is misleading.  For example, only 40
percent of the new taxes on cigarettes would go to the Oregon
Kids Program Fund and another four percent would apply to
administering the FHIAP.  On the other hand, 45 percent would go
to the Oregon Health Plan Fund, the ultimate distribution of
which is too complex or too uncertain from the face of the
measure to be described only as "provid[ing] health insurance to
all children."  Thus, the Attorney General's decision to confine
his description of the proposed measure's purpose respecting
health care as affecting only children's health care is too
limited.  We conclude that the caption is misleading and
therefore fails to substantially comply with the requirements of
ORS 250.035(2)(a).  It follows that the Attorney General's
concession respecting the caption is well taken and that a remand
to address the inadequacy of the caption is appropriate. (4)
Petitioners Straube and Rietmann object that the
caption does not specify the exact amount of the tax increase. 
The Attorney General responds that the tax increases set out in
this measure are complex and thus difficult to compress
accurately to fit the 15-word limit that ORS 250.035(2)(a)
imposes.  We agree that the Attorney General's caption does not
violate ORS 250.035(2)(a) for that reason.RESULT STATEMENTS
The "yes" vote result statement must be "[a] simple and
understandable statement of not more than 25 words that describes
the result if the state measure is approved."  ORS 250.035(2)(b).
As stated above, the Attorney General's certified "yes" vote
result statement provides:
"RESULT OF 'YES' VOTE: 'Yes' vote provides health
insurance for all children under age 19 funded in part
by increasing tobacco taxes; funds other tobacco and
health related programs."
The "no" vote result statement must be "[a] simple and
understandable statement of not more than 25 words that describes
the result if the state measure is rejected."  ORS 250.035(2)(c).
As stated above, the Attorney General's certified "no" vote
result statement provides:
"RESULT OF 'NO' VOTE: 'No' vote retains current
health insurance programs that provide health care to
particular low-income and other qualified children;
maintains tobacco taxes at current levels."
Petitioners Straube and Rietmann argue that the "yes"
vote result statement is inadequate because it does not describe
the proposed tax increase as a percentage of the current tax.  As
we noted with respect to the caption, it is difficult, given the
space limitations, to describe all the complexity of the phased-in tax increases that the measure proposes.  The result
statements are not infirm for that reason.
The result statements are problematic for another
reason.  Petitioner McEvilly objects that both result statements
are misleading because they overemphasize the subject of
children's health insurance and underemphasize the proposed tax
increase.  Petitioner McEvilly's argument about references to
tobacco taxes is not well taken.  However, for the reasons stated
above, we conclude that the reference to only children's health
insurance in the "yes" vote result statement is misleading.  It
follows that the Attorney General's result statements fail to
comply substantially with the requirements of ORS 250.035(2)(b).
SUMMARY
The summary must be "[a] concise and impartial
statement of not more than 125 words summarizing the state
measure and its major effect."  ORS 250.035(2)(d).  As noted
above, the certified summary (5) states:
"SUMMARY: Under current law, the state provides
health insurance coverage to children who are eligible
under three state-operated medical insurance programs. 
Measure creates the Oregon Kids Program to provide
health insurance coverage for all uninsured children
under age 19 and creates the Oregon Kids Program Fund,
which retains interest earned by program and
appropriates money for program administration.  Measure
creates process by which uninsured children obtain
insurance coverage through one of three insurance
programs: the state medical assistance program, the
State Children's Health Insurance Program, or the
Family Health Insurance Assistance Program.  Program
funded by new tax on tobacco product distributors and
increasing taxes on wholesale price of tobacco
products, and by requiring application to the federal
government to obtain federal financial participation. 
Other provisions."
A ballot title summary must summarize the major effect
of a measure.  Sizemore v. Myers, 332 Or 417, 420, 29 P3d 1135
(2001).  Petitioner McEvilly contends that the summary does not
identify the major effect of the measure, which, in his view,
would be to increase taxes on the distribution and consumption of
tobacco products.  That assertion is not well taken.  For their
part, petitioners Straube and Rietmann assert that the summary
fails to disclose that most of the tax increase would be
allocated to programs other than those providing children's
health insurance coverage.  
We agree that the sole emphasis on children's health
insurance in the Attorney General's certified summary is
misleading.  Nowhere is there mention of the other programs.  In
our view, those programs must be discussed.  It follows that we
once again agree with a concession of the Attorney General:  His
certified summary fails to comply with the requirements of ORS
250.035(2)(d).
We pause at this point to note that the summary that
the Attorney General now advocates also is insufficient.  The
alternative summary does not indicate how the tax revenues would
be divided between the Oregon Health Plan and the Oregon Kids
Program.  For the reasons stated earlier, we conclude that the
Attorney Generals' alternative summary is misleading and fails to
summarize the measure's major effect, which is to raise tobacco
taxes to pay for several health insurance programs and other
government programs.
Petitioners Straube and Rietmann argue that both
summaries are inadequate because they fail to reveal the actual
amount of the tax increase.  The fiscal consequences of a measure
may be its major effect.  See ORS 250.035(2)(d) ("The fact that a
measure does not itself mention its fiscal effects does not
preclude the Attorney General from doing so.").  The amount of
the tax is a significant piece of information that a voter might
need before making a decision whether to vote "yes" or "no." 
Some ballot titles and summaries have been quite specific in that
regard.  We conclude that, space permitting, the summary should
contain information about the rates of the increase in tobacco
taxes.  We hold that the Attorney General's summary does not
comply substantially with the requirements of ORS 250.035(2)(d).
Petitioners Straube and Rietmann also maintain that the
tax is not only a tax on wholesale tobacco products, but also is
in part a tax on retail consumers that distributors must collect. 
We do not find that additional argument to be so well taken as to
require that the Attorney General further modify the summary, but
we note that the Attorney General is entitled, if he wishes, to
further consider the matter on remand. 
For the foregoing reasons, we conclude that the
Attorney General's certified ballot title fails to comply
substantially with the requirements of ORS 250.035(2)(a), (b),
(c), and (d).  The ballot title must be remanded to the Attorney
General for modification.
Ballot title referred to Attorney General for
modification.
1. Several petitioners brought challenges to the Attorney
General's certified ballot title.  We have consolidated those
proceedings for purposes of review and decision.  
2. Whether the measure, if enacted, in fact would succeed
in providing health insurance coverage for "all" uninsured
children under 19 years of age is unclear from the text of the
measure, but it does propose to increase funding for children's
health insurance and other forms of health insurance.
3. The Attorney General indicates that the caption was
supposed to state:
"PROVIDES HEALTH INSURANCE TO ALL CHILDREN 
UNDER AGE 19;
RAISES TOBACCO TAXES; FUNDS OTHER PROGRAMS"
Of course, we must review the title that the Attorney General
certified, not the one he wanted to certify.  See ORS 250.085(8)
(this court reviews "the title certified by the Attorney
General").  However, we also have considered the parties'
criticisms in light of the corrected ballot title that the
Attorney General now expounds, to assist and expedite the
Attorney General's task on remand.  See ORS 250.085(7) (this
court's review "shall be conducted expeditiously").
4. We do not find our criticism of the certified caption
to be apt with respect to the alternative caption that the
Attorney General now advocates.
5. The Attorney General states that he intended the
summary to state:
"SUMMARY: Under current law, Oregon provides
health insurance to children eligible under three
state-operated medical insurance programs.  Measure
creates Oregon Kids Program to provide health insurance
coverage for uninsured children under age 19 and
creates Oregon Kids Program Fund, which retains
interest earned by program and appropriates money for
program administration.  Measure creates process by
which uninsured children obtain insurance coverage
through one of three insurance programs.  Program
funded in part by imposing graduated tax increases on
tobacco product distributors and on wholesale price of
tobacco products.  Revenue from increased tobacco taxes
goes to multiple programs, including Oregon Kids
Program, Oregon Health Plan, cigarette tax enforcement,
and Tobacco Use Reduction Account.  Measure requires
application to the federal government to obtain federal
financial participation.  Other provisions."