SALEM - To its backers, Measure 41 is a tax break aimed at helping “the little guy” and Oregon's middle-class families.

Promoted by the Washington, D.C.-based group FreedomWorks, Measure 41 would reduce state income taxes for most households by about $140 a person by giving Oregonians the option to take the same personal income tax deduction as on their federal return.

Opponents, however, say Measure 41 would hurt the people it's supposed to help by removing $400 million a year from the state budget, making it tougher to pay for Oregon's schools and health and public safety programs that Oregonians count on.

It's the latest Oregon initiative effort by anti-tax activists who say government takes too much of taxpayers' income and doesn't spend those dollars wisely.

Measure 41 has become an issue in the 2006 governor's race.

Democratic Gov. Ted Kulongoski opposes the tax cut, saying it would harm efforts to improve Oregon schools and hire more state police. Republican hopeful Ron Saxton says Measure 41 would give real tax relief to middle-income earners and spur economic growth in Oregon.

The Measure 41 campaign is being led by Russ Walker, head of the Oregon chapter of FreedomWorks, which has worked around the country for reduced government regulations, lower government spending and reduced taxes.

Walker thinks he has a winning formula in Measure 41, which would let Oregonians choose between taking the current exemption credit on their state tax return or taking deductions equal to those they get for exemptions on their federal tax return.

Noting state budget analysts' estimate that the tax cut would amount to $140 a person for most households, Walker says Measure 41 could result in substantial tax savings for families especially.

“This will give a family of four $560 a year in additional savings,” he said. “You can spend that money on a college fund for your children, gas for your car or making ends meet.”

Walker said he got the idea for the tax deduction measure from anti-tax crusader Bill Sizemore. And the signature-gathering drive for Measure 41 was bankrolled by Loren Parks, the reclusive Nevada conservative who's funded many of Sizemore's past initiatives.

Opponents of Measure 41 say it wouldn't produce big tax cuts for all Oregonians. Because most elderly Oregonians are low or middle income, their average tax cut would be $31 a year.

But Phil Donovan of the Defend Oregon Coalition said that the main problem with Measure 41 is the $400 million it will remove from the state budget each year.

With Oregon emerging from a recession that gripped the state from 2001-2003, the state should be reinvesting in education and other programs now that the state's coffers are full, he said.

“Measure 41 takes us backwards at a time when our economy is allowing us to move forward,” he said. “Instead of cutting school days, we should be restoring education programs that have been cut for the past three years.”

Walker scoffs at the notion that Measure 41 will force cuts in education and other services. He notes that the state's latest revenue forecast predicts the state will have about $2 billion more in revenues in the 2007-09 budget period than earlier predicted.

“For those on the political left, there's never a good time for a tax cut,” the FreedomWorks director said. “In a recession, they say, ‘This isn't the time to cut taxes.' And now, when we have excess revenue, they still don't want it to go back.”

Opponents say, however, that while the state will have a substantial budget surplus in the next two years, Measure 41 tax cuts will be in effect for years to come and could force state spending reductions if the economy turns down again.

State Trooper Jeff Leighty, president of the Oregon State Police Officers' Association, says voter passage of Measure 41 could thwart efforts next year to begin addressing a state trooper shortage.

Lawmakers won't want to commit to hire more troopers if they know they will have $400 million less a year to spend on education and health programs as well as law enforcement in the coming years, Leighty said.

“We think there's a good opportunity, in the next legislative session, to begin rebuilding the Oregon State Police,” he said. “But it's going to take eight to 10 years to rebuild this department. And we think Measure 41 would derail our efforts.”