Supporters and an opponent of a measure to raise hundreds of millions of dollars for Oregon's Medicaid program faced off in a debate Friday hosted by the City Club of Portland.

Oregon voters have just over two weeks to decide whether the state should impose health care taxes passed by the Legislature last year to fund the health insurance program for the poor. That's the question posed by a referendum known as Measure 101.

The state faced a Medicaid budget gap during the current two-year budget cycle because it must pay more over time for the additional Oregonians provided with taxpayer-funded health coverage under the Affordable Care Act. The federal government also asked Oregon to pay more of Oregonians' Medicaid costs given the good economy.

The Jan. 23 special election is a crucial moment for the state's Medicaid program and potentially other areas of the budget. Without the $210 million to $320 million in taxes at issue in the referendum, lawmakers would have to use the February short session to balance the budget by raising revenue from other sources, making cuts or both.

County clerks across the state started sending out ballots this week.

The package of taxes before voters includes taxes on certain hospitals and insurance plans. One topic of the debate on Friday was how the outcome could impact public schools. Rep. Julie Parrish, a Republican from West Linn and an opponent of the taxes, said the taxes including a 1.5 percent tax on public employees' health insurance policies will be a "hit right out of classrooms in my district."

Jessica Adamson, a registered lobbyist for Providence Health & Services and member of Sherwood's School Board, disagreed. She said if voters reject the taxes, that -- not the new tax on insurance policies -- would pose a big financial risk to school districts. She said there are only a few areas in the state budget large enough for lawmakers to find enough money to patch the Medicaid budget if the new taxes are rejected, and the education budget could become a target.

"Either we're going to be cutting people off health care, or we're going to be making terrible decisions in other budgets," Adamson said.

Hospitals have an interest in maintaining Medicaid coverage for Oregonians, because they must provide free care to low-income people without insurance who wind up in the emergency room. Insurers benefit if voters approve Measure 101 because the state will pay money raised through the tax on insurance plans to help provide health care to very high-cost patients who buy policies on the individual insurance market.

Parrish said Measure 101 would allow insurers to pass along the cost of the 1.5 percent health insurance plan to consumers.

"It is effectively a sales tax on health care authorized by my colleagues in the legislature," Parrish said. "Is Providence actually going to pay that out of the goodness of their heart?"

Adamson did not respond to Parrish's question.

Parrish said the tax plan was both unsustainable, because it will only last two years, and could open the door for lawmakers to pass an expanded, costlier version of the plan in the future.

"What happens two years from now when all this sunsets?" Parrish asked. She also suggested the state's rising minimum wage would likely mean fewer Oregonians will qualify for Medicaid in the future.

For their part, Adamson and fellow Measure 101 supporter Felisa Hagins, a member of the Oregon Health Policy Board and political director for Service Employees International Union Local 49, hammered home their point that Measure 101 is the only solution to the state's Medicaid budget woes.

"This is the only way to guarantee Oregonians will have access to health insurance," Adamson said.

-- Hillary Borrud

503-294-4034; @hborrud