Oregon’s Democrat-dominated Legislature adjourned this week to applause for crafting some responsible legislation and maintaining a respectful tone during its six-month session. But it also flipped a giant tax-and-spend switch, unnecessarily igniting a long-smoldering fuse that will become the real story of this legislative session.

Give them credit for an impressive, bipartisan transportation package that will jump-start the Newberg-Dundee Bypass and provide funding for needed roadway and bridge improvements statewide. Funding comes from increases in vehicle fees and a 6-cent-per-gallon hike in gas taxes. For someone driving 12,000 miles at 15 miles per gallon, that gas tax adds just $48 in annual cost.

The Legislature acted responsibly in matters of energy efficiency, conservation and limits on pollution. It protected children with improved health care and a law preventing schools from concealing sexual misconduct. It protected consumers in areas of housing, vehicle repairs and home mortgages, and used federal stimulus money to offset otherwise painful cuts in social services.

It accomplished its most important job by balancing the state budget, but that’s where the debate heats up. Democrats ignored pleas from a unified statewide business community by enacting massive, permanent tax hikes, and they over-protected their private and public union supporters at the expense of all tax-paying Oregonians.

Even the Democrat-leaning Oregon Business Association was frustrated by the take-no-prisoners tax legislation. The OBA’s proposal, by its own admission, would have “established the highest corporate minimum in the nation,” while the more conservative Associated Oregon Industries supported much more limited tax increases.

Simple compromise might have avoided the now-promised referendum, which would give Oregon voters final say on the personal and business tax hikes. But Democrats, with a 60 percent majority in both the House and Senate, thumbed their collective noses at common sense. Now, said an OBA official, we have “what is guaranteed to be a brutal battle between the two big coalitions that seem to relish in these fights.”

Consider post-session comments from a major player in one of those coalitions, the Oregon AFL-CIO. Its spokesman praised legislators for finally helping working people who “have been left behind as corporations cheat the system.” He praised new taxes on upper-income citizens for the benefit to “real Oregonians” and “real people.” That’s the kind of hate speech and class warfare demagoguery that unfortunately explains some political platform planks in Oregon’s ruling party.

Public employee unions were the big winners in 2009, solidifying the Democratic reputation for being in their pocket when deciding key legislation. Somehow, that coalition of lobbyists and legislators became blinded to the strong possibility that Oregonians will reject those tax hikes and leave the state’s over-extended budget in shambles.

It didn’t have to happen. Business organizations would have grumbled at more moderate, temporary tax hikes, but they would have backed off from an all-out election campaign. Instead, assuming the signatures are gathered, all Oregon schools and other government services will be in financial limbo for months pending a statewide vote.

If voters ultimately reject the tax hikes, that early applause will have long faded away.