An optimist on school funding

By Ben Cannon of Portland, Oregon, who is a teacher, a Rhodes Scholar, and is serving as chair of the Oregon Bus Project's Education Policy Council.

Oregon’s economy remains in the doldrums. State lawmakers pledge not to increase taxes rather than face voters’ wrath. Progressives gear up to fight another onslaught of radical ballot measures that would limit government spending. The House’s conservative Speaker prescribes a tonic of stable – if woefully inadequate – education budgets. And despite everyone clamoring for better schools, Oregon’s new K-12 budget will be too small to prevent additional cuts.

In this environment, to be optimistic about long-term prospects for school funding is to feel some sympathy for Sasquatch (the creature formerly known as Bigfoot and elsewhere as Yeti), whose lonely forays into human company are met first by panic and flight, then by insulting “expert” decrees that it never existed at all.

But progressives must be far-sighted, smart, and courageous. We must understand that good ideas have the power to change public perceptions. And guess what? Oregon can meaningfully increase the stability and the adequacy of school funding within two years without new taxes or repealing Measure 5. By combining some of the best ideas of Oregon progressives from the last few years, you get a package of three ballot measures that looks something like this:

The package is both politically and policy-smart. Tying funding to QEM increases adequacy, the rainy day fund adds stability, and reducing tax giveaways generates revenue without raising tax rates. As Oregon slips to 31st in the country in school funding, voters long for something that would end the pealing of the school funding crisis bell.

Despite its strengths, it should be clear that this plan is an intermediate step and is not a substitute for broader tax reform. Although some of our friends have occasionally implied otherwise, tax giveaways do not represent a bottomless pot of gold. By far the majority of tax giveaways benefit individual taxpayers, not corporations. Many of the largest (e.g. deductions for employee benefits, home mortgage interest, and Social Security) are critical to the middle class. Still, the growth of special-interest tax giveaways over the last decade has far outpaced total tax receipts. A conservative estimate identifies nearly $300 million in giveaways that appear to serve no valuable public purpose at all. Subjecting all tax giveaways to closer scrutiny and trimming some benefits for the upper-middle class would produce many millions more.

So as we think about the 2006 ballot, let’s consider that perhaps our best defense against bad ideas is good ones of our own. Instead of always heading back into the woods, maybe Sasquatch ought to sometimes stick around.

  • David Wright (unverified)

    Interesting ideas.

    I'm curious, where can I find that list of $300M in tax giveaways that serve no public purpose? I'd just like to see for myself what they are...


  • Your Friend (unverified)

    Isn't this lacking just a little credibility?

    The QEM is a fabrication with no supporting proof it will do anything but increase spending and worsen the crisis. In fact if our system is given that extra money it would immediately go to increasing compensation packages, expanding CIM, adding CAM, and adopting more programs no one wants (like the Cutural Competency Program) and we would be right back in the same crisis created by the same people doing the same things. Your idea for "Generating as much as $1.1 billion" is still taking money out of the pockets of taxpayers. Getting rid of tax deductions is as much a tax increase as is creating new fees.

    So what's new for the 60% of people who voted no on M28 and M30? How has education leadership improved it's credibility? As far as I can see it's worse.

    Wouldn't it be better to earn additonal support by actually doing something people would recognized as forward movement? Dumping failed programs and stopping new ones from emerging? Dump CIM/CAM, stop the Cultural Competency and restructure health care coverages for starters.

    Doing nothing but asking for more is not pregressive.

  • Brian Wagner (unverified)

    When I interviewed Rep. Alan Brown on behalf of the Oregon Student Association last summer, he referenced a similar idea to find new sources of funding--going through the tax books and deleting "stupid" and "unnecessary" deductions. While he made it sound less easy than just capping the average giveaway, he did say that you could find things like a $1 million allocation for used tire recycling, a program that wasn't even in existence anymore.

    I'm curious though, from my experience of some funding futility while at OSA; how do these cuts come about? Would it be a matter of having to go through the books company-by-company and cutting back their deductions to ensure they werent over 40 cents on the dollar? It seems optimistic (obviously) but how workable is the actual effort to cut deductions?

  • David Wright (unverified)

    Another note on math...

    If $5.6B is $300M more than the Dems currently propose, that means the "baseline" Dem budget is $5.3B (which allocates money for education instead of senior services, higher ed, etc.) And if $5.6B is also 80% of the QEM target, that means that 100% of the QEM target is $7B, or $1.7B more than the baseline Dem budget.

    Sooo... even if the giveaway cap is successful at raising $1.1B in extra revenue, and ALL of that revenue goes to K-12 (and not to the range of services that was suggested) doesn't that still leave us about $600 million short of the eventual 100% QEM goal? Where will that money come from?

    Assuming no new taxes as promised (and leaving aside the very real question of whether reducing deductions is effectively a new tax), we'd still have to raid some other state services to get the money by the time we reached that 100% QEM mark, whenever that might be. In fact, the raiding would start somewhere around 91% of the QEM goal.

    In other words, just as is the case now, putting more money into education means that someone somewhere else loses out. Either the taxpayer through higher taxes or fees, or the users of other state services that would have to be defunded.

    While each of these proposals may be worth considering, I don't see the package as a solution to anything. Promoting it as a relatively "painless" way to address the education problem in Oregon is misleading at best.

  • David Wright (unverified)

    Sorry, one other quibble here:

    Oregon can meaningfully increase the stability and the adequacy of school funding within two years without new taxes or repealing Measure 5.
    That may be true as far as it goes, but since these proposals do not stabilize Oregon's overall revenue picture at all, any stabilization of school funding must come at the expense of stability in funding for other programs. Even adding to the revenue base by cutting deductions and exemptions merely raises overall revenue, it doesn't stabilize it.

    It was mentioned that this is an "intermediate step" towards broader tax reform... but when the intermediate step is to effectively raise current taxes (while technically avoiding any "new" taxes) by cutting deductions, one has to wonder what the ultimate step will be?

  • (Show?)

    Here's a radical thought: let's leave funding changes statutory. I'm tired of using the constitution as our scratch pad for our budget process.

  • ron ledbury (unverified)

    Oregon's public schools can be saved by having just one set of pension trustee rules that are the same for the trustees of both public and private pensions.

    If a trustee cannot design an actuarially sound pension plan that does not require topping off long after employees make their investments then they should be removed as trustees or, in some cases, tossed into jail.

    Split the PERS related costs off from the education budget in Salem. Any group that is refusing to split off PERS costs is just a common criminal, in my book, in support of a PERS Tier-One and Tier-Two conspiracy to defraud the public.

    The Oregon Bus Project, Stand For Children, Portland Schools Foundation. . . and on and on . . . and their financial backers like the Fred Meyer Trust are all involved in the PERS slush fund game. The Oregon State Bar as well as most public attorneys in this great state are in on the take, knowingly and willfully, and with intent to deceive.

    Heck, I cannot even get the Heidi Franklin at the PPS nor Dale Orr at PERS to measure the prospective PERS costs for employment decisions in the current year of a budget.

    The Portland Public School District just decided to let some 250 teachers go. Those teachers, for just one year's salary, roughly corresponds to the added PERS cost related to salary decisions made in October 2004 for earlier PERS tier employees. It is no surprise. How many people can you give a boost of 20 plus THOUSAND dollars in retirement lump sum before it results in cutting other teaching positions? Was this math known in October 2004 at the time of the Portland Public School District negotiations with the Portland Association of Teachers? Why, of course it was. Gee Wiz, we are all helpless, as the propaganda line goes, to halt the PERB demands for increased Employer Contributions.

    The Mayor in San Diego just announced his resignation. . . related to pensions. There are two possible course of action, void the pension boosts or demand that they be measured and paid for upfront. It is the same thing here as there. The SEC folks though seem inclined to be happy with bond rating down grades (so as to extract higher coupon rates from the locals) and the issuance of bonds to cover the over payments rather than prosecute folks for official misconduct in promising to pay more than they knowingly had on hand. The bond folks would simply not have their new fangled market opportunity were it not for the pattern of reckless pension management. The San Diego mayor is a Republican, but that really seems quite beside the point. The Pension Obligation Bond proponents are a key ingredient to perpetuation of unsound pension plan design. Yet, it takes an entire community to raise a baby into a monster on the scale of today's special trustee rules for pensions of public employees.

    Suppose a trustee of a private pension trust came begging for the state to offer its Full Faith and Credit to issue bonds to cover over-generous payouts that were, surprise surprise surprise, just a surprise. Suppose this trustee were affiliated with the OEA and the NEA. The Attorney General would more likely to be all over them . . . sort of like they were Capital Consultants LLC.

    If I start seeing some key people in this gang getting sent to jail then I think our funding problem will become a little more manageable and realistic. This is my meager two bit whining for the day . . . I think I'll go prepare my public records request for the PPS to deliver the names of the fired teachers. They might be ready to split off from PAT . . and they have got nothing to lose. Thanks PPS.

  • (Show?)

    I cannot stand these Measures. And that old guy at your meetings that is the driving force behind them really creeps me out.

    1. Anytime you fix a budget, the other accounts get hit exponentially more. Schools will come at the cost of the Oregon Health Plan, Transportation and everything else. Teaching kids is important but you could make a strong argument for other government services.

    2. Rainy day funds are good, but they become political fodder. This is a step in the right direction but a giant leap away from what this Measure should look like.

    3. Capping tax breaks is the worst one of all. Guess which tax breaks will have the strongest force placed on them. It's not going to be the ones for the Timber and Agriculture Industry. It's going to be the ones like the Earned Income Credit that go to most people disengaged from the process.

    I would love to spend more time with the Education Policy Committee, but stick to education and leave financial matters up to people who know more about finance. And take an open stance. You guys have taken these ideas to heart and become closed off to all other ideas. Trust me. These are the tip of the iceberg and they are not very good.

    If you want more money for education then create a tax reform committee and fill it with people that know a lot about tax issues and refer matters to them. Ditch these Measures and open yourselves up to more ideas.

  • Sally (unverified)

    PERS does seem to me like (no party allusion intended) the elephant, or herd of them, in the living room here. Out of curiosity, having left (my home state of) Oregon a few months ago, I spent a few hours over the weekend searching out current status and reports. I found that this ghastly system is back to eating 18-some percent of most agency budgets.

    The problem has been known since the early 90s. It awaits rectification. By more than one calculation it is the worst PERS in the nation. One wonders if all the other worsts or firsts don't fall under (or from) that one.

    The best would be the wickedest (to achieve): wipe it out and start anew with a defined benefits plan.

    I'll hold my breath from another state to await current Oregonians attempt or success in tackling this.

  • K. Sudbeck (unverified)

    Education is one of the most strategic resources our country has and should be supported. But, it is hard to support Education when wacko curriculums are substituted for real curriculums and we have to accept mismanagement of the resources, in which on one is held accountable. On the mismanagement of resources, I am taking my daughter out of school this Friday, because of a Walkathon for XXXX. It doesn't matter what it is, it just isn't reading, writing, or math. So, instead of the school mismanaging my daughter's time, we will be using that time in a manner I deem productive and fulfilling.

  • Aaron (unverified)

    The prices to get those three items passed thru the house side (and of the way and means committee) are very a Democratic state senator and a rep told me... The price might be the weakening protections involving the environment, the tweaking of the laws around elections and voter rights, the accelerated death of OHP, the clear cutting of forests, more tax breaks and the list goes on and on. The Democrats have to make a stand on one of these issues and stick to their guns. Nevertheless, since their have “thinned” loyalties on many issues; they fear reprisal from one of these groups if the “sale-them-out” for another group come the next election cycle.

    I too am an optimist on the state of education for the whole State equally; but we need to make a stand for the long term growth and stability of the state as well.

  • (Show?)

    I remain an optimist on fixing Oregon's (not just K-12 education's) funding problem, despite the two bad ideas (mandated funding for a percent of the QEM and arbitrary cap on tax expenditures) posted here (setting up a rainy day fund has merit, for sure, if done correctly.

    And Jeff is correct - keep out of our constitution. Enough damage has already been done there that needs fixn'.

    The Bus Project has been talkn' these ideas for months now, and there's good reason they have not caught on.

  • Aaron Minoo (unverified)

    A Constitutional amendment to cap tax giveaways. Currently, out of every dollar of personal and corporate income taxes, the state gives away 45 cents in the form of deductions, exemptions, and exclusions. Capping the "giveaway" rate at 40 cents would generate as much as $1.1 billion new revenue that would be available for spending on education, health and human services, or public safety. This measure should require the Legislature to figure out which tax giveaways to limit or cut.

    The Governor will not sign, and Minnis will not let it survive the House.

    A Constitutional amendment that would require the Legislature to fund K-12 at or above a certain percentage – say, 80% -- of the Quality Education Model (QEM), rising gently over time to 100%. QEM is the amount that a bi-partisan Commission estimates would be required for students to reach the state’s education goals. At 80% of QEM, the state would have to spend $5.6 billion in 2005-07 biennium, or $300 million more than what Democrats are currently proposing. It’s expensive, but certainly our schools deserve at least a “B.”

    Minnis is not going to let this survive either.

    The only thing that it might survive both Minnis and Kulongski is the rainy day fund...but what variation will it be!!!!!!

  • (Show?)

    It strikes me that there are two ways to do a cap on tax expenditures. One would be to say that the Legislature has to find a way to cap at some level - say, 40% - and eliminate enough to get there. A second way would be to say that any individual or corporate taxpayer couldn't take deductions and credits to bring their effective tax rate below some percentage of their nominal tax rate, say 40%.

    The former would put the burden on the legislature to make choices, which might make for better policy but would lead to game playing. The latter would leave the leg to do lots of game playing, but would cap how high a single taxpayer could take advantage and run up the score.

    Chuck, you argue that a cap on tax expenditures is bad - but I don't know why. Would a cap on how many a taxpayer could take also be bad?

  • Ben Cannon (unverified)

    I love the feedback. To each and all, I would ask -- as the Bus has been doing for months -- what are better ideas that would have a chance in 2006? No doubt this plan isn't perfect, but it would capitalize on the energy that exists around the school funding issue (it's the number one issue on doorsteps), it would produce meaningful new revenue for state services, and it would smooth out budget fluxes with a rainy day fund. I'm worried that the alternative is to pour all our resources into playing defense against disastrous proposals from the right (we could argue about whether that's the most efficient use of time and money; obviously, I believe it isn't).

    I have nothing but respect for the intelligence and integrity of many of the people who have been the strongest critics of this plan. Chuck, you've looked at state budgets much longer and much harder than I (a distinction shared by many). OCPP's work is what brought the issue of tax breaks to our attention in the first place. These criticisms are important.

    But they also may be missing the point, if just a little. The bigger question I hoped my piece would raise is about revenue politics. What is our political strategy for making the revenue system more stable and adequate? How do we intend to engage the state in a conversation about the value of public services? Is our answer merely to wait until the House turns (while hanging on to the Senate and the Governorship)? Could a ballot measure -- or a series of ballot measures -- actually help get us there?

    We should be urging our political leadership to support meaningful revenue-related ballot measure(s) for 2006. Chuck, Jensen, I hope that you agree with me at least about the importance of doing something positive in 2006. I hope that you are trying to convince decision-makers that too much is at stake to forgoe the chance. I would be eager to know what you are suggesting to them.

  • ron ledbury (unverified)


    So long as the State Bank called PERS, with limited entry for public employees, exists we will never have stable funding because of the catch 22 that the funding question is not really the problem anyway, is it?

    If the stocks tank will you be willing to close all public schools so as to cover for the private investment losses of a certain class of Oregonians? Where do you draw the line anyway, is it at 25 percent of the current "school budget" being redirected to private investment losses? Is it 40 percent? Is it 60 percent? Is it 80 percent? How about when the whole bloody wad goes to PERS or PERS bonds?

    If your concern is to improve revenue then you need to think of increasing general economic activity rather than enhancing cannibalistic economic behavior. I am the eccentric here who has stuck his nose into the books that describe all manner of macroeconomic developmental strategies in the so-called third-world, and I can see nothing from the local folks that even comes close to the traditional strategies for economic development as practiced around the world.

    All I see is infighting. The outside bonding entities need nitwit unwitting locals to carry their water and you seem to be doing the trick for them. If you would snap out of your tunnel vision to ponder the more general notion of economic development you might find that I am the go slow kind of guy, I have no need for the nirvana of locking in some sort of limit on a future legislature so as to feed a need for an illusory sense of security.

    I do not see the public policy advantage of today picking the winners and losers of future economic uncertainty. The rule for infighting is the equal privileges and immunities clause and it should dictate there be one common set of rules for all private investments; namely here in relation to schools that there should be one common set of rules for pension trustee's, both public and private.

    Likewise, it should be able to address the problem of special tax breaks too. But I guess that escapes your vision. The rainy day fund is a matter that is more applicable to an entity that can control the currency, which is the federal government.

  • David Wright (unverified)

    Ben, good on ya for calling for alternative ideas rather than mere criticism.   ;-)

    Being more sympathetic to the "right" on these issues of revenue and spending, I'm not really in a position to help craft specific proposals that you'd like. But I do have some non-partisan economic observations to make that may help provide some guidance here.

    First off, the questions of revenue stability and funding adequacy are separate issues. It's important not to mix up questions of "how much should we spend" with "how can we get a reliable, steady source of revenue". Reliability can be measured fairly objectively. Adequacy is almost entirely subjective.

    Dealing strictly with the "stability" issue, it seems to me there are two ways to help shelter against revenue variability. The first is to diversify our revenue sources. Oregon relies far more heavily on income taxes than most other states in the country. I believe personal income taxes make up roughly 85%-90% of the state tax revenue budget (this excludes other sources of funding like fees and federal funds of course). This means that large fluctuations in personal income pass through almost directly to equivalent fluctuations in state tax revenues. By diversifying our tax structure to include sources that are not dependent on income (or at least less dependent), that would help to mitigate some of our revenue variability.

    However, no matter how diverse the tax structure, some fluctuations are bound to occur with changes in the overall economy. Thus, the second and far more effective way to stabilize revenue is to establish some mechanism for a reserve ("rainy day") fund.

    The theory is that there's a "baseline" budgeted spending amount, and when revenues exceed that baseline they are reserved so that they can be drawn at a later time when revenues fall short of the baseline. The key here is that the baseline budgeted spending amount pretty much by definition needs to correspond to the average revenue amount (from whatever sources are available). If so, then the amount of overage (going into the reserve) would balance with the amount of shortfall (being drawn from the reserve). If the baseline spending budget strays from average revenues, the reserve will either build too high or fall too low.

    Those are the general "stability" measures, the devil is in the details of implementation. If we diversify our revenue sources, what does that mean exactly? If we set up a reserve fund, how exactly do we set aside those funds, and how exactly do we draw from the fund? Those are the partisan battles to fight.

    As for adequacy -- that's going to be almost entirely partisan, because "adequacy" is such a subjective term. Remember, though, if we establish a reserve fund of some kind, we have to generate revenues somewhere above whatever level is deemed "adequate" in order to have money to divert to that reserve fund. So the question of "how much do we spend" goes in lockstep with "how much more than that do we tax"?

    Food for thought...

  • Sally (unverified)

    "The bigger question I hoped my piece would raise is about revenue politics. What is our political strategy for making the revenue system more stable and adequate? How do we intend to engage the state in a conversation about the value of public services?"

    Most of what Mr. Ledbury says swooshes over my head. And I have no affiliation, or association beyond an occasional blognote, with any of you nice people.

    I can tell you, though, that down on the ground and outside your halls, where I've hung and the people I talk to inhabit, the code words would (still) be: Fix PERS. Until that is actually accomplished, I'm sorry to say that, all your good intentions aside, I hope you will have to fail in your dialogue about the value of public service, because the cost is muchly unfairly tipped and too high.

  • maliah (unverified)

    I love the ideas -- not perfect, but much better than anything else that has come up through the inside-baseball liberal cabal. Maybe it's winnable, and it would certainly help solve a problem. yeah, the legislature won't do it, but maybe it would make a good ballot measure. And it would make Republicans get on record about their support or lack of support for education. They always say "we're for education" and there's no way to prove otherwise. And Democrats respond by saying nothing -- and lose the one 60%-plus wedge issue they have. Mostly from lack of vision and courage.

    I laud Ben Cannon for championing a good idea. (From what I understand, this plan resembles very closely Jeff Merkley's plan from 2003.) And Ben, don't take these critics too hard -- Blue Oregon folks seem basically to be criticizers and backbiters -- and not problem solvers.

    The liberal cabal for the last decade had criticized ideas very effectively -- althogh not enough to onvince the State -- but done little effective to advocate good ideas. Democrats have won some elections, but have been outflanked, outfought, and outwitted on issues and in ballot measures.

    Let's fight for something positive and problem-solving! If education is so important, let's do something about it!

    I don't predict that the liberal cabal will, in fact, do anything. Maybe it's time for a new liberal cabal.

  • johnner (unverified)

    This is great stuff for debate. I too want to see if there's the better idea. I'm not sure about this one, but most of the "experts" come up with nothing effective.

  • Peter (unverified)

    It would be good to see a list of dumb tax breaks. I'd like to know how much money is there. I think there needs to be more tax fairness. I'm in a low tax bracket, and my Oregon taxes are almost as high as my federal taxes! And all the tax breaks go mostly to rich people and don't help people like me. I'd be for anything that cut the tax breaks.

  • Will (unverified)

    I agree about the liberal cabal. The people who are supposed to be so smart haven't helped on land use or education or gay rights or tax fairness. And what they do best is bashing other people.

    There are a lot of good people, but it seems like time for some new leadership. That's why I like Blue Oregon (although maybe it's a waste of time -- but I still enjoy it) and Chairman Dean and Democracy for Oregon and Moveon, and even the less partisan stuff like Stand for Children and the Bus Project and the rest. They give us a chance for new leadership and hope. It's time for a wholesale shakeup. Or at least to invite some of the new people and new ideas to the table.

  • (Show?)

    Yes, it's easier to take potshots than to propose a constructive alternative. But here's a constructive, pro-Bus, pro-Ben reason to abandon these concepts.

    Enacting bad public policy is not better than doing nothing, especially when it's proposed as a constitutional amendment. A constitutional requirement that the legislature fund a particular program at a level set by a separate unelected body like the Quality Education Commission is bizarre. The legislature is elected to make hard decisions, and charged with weighing all of our priorities. The QEC is elected by no one, and charged with weighing only one priority.

    A constitution should reflect our most enduring and considered judgments about how government should operate. It is not a place for setting budget priorities, which are revisited every year or two for good reason. If the public were so clearly convinced that education needs to be funded at the level that this proposal would require, then the proposal would be unnecessary because our elected representatives would already be doing it. A consistent failure to fund education "adequately" indicates a lack of public consensus on what "adequately" means. Or, more likely, it's just that we can't quite get to "adequate" education without cutting other services like Medicaid to the level of "horrible." The legislature is knee deep in this debate, but your proposal would short-circuit this deliberative process because you don't like the results we're getting. It is anti-democratic (small "d"), anti-republican (small "r"), and anti-constitutional. What's "progressive" about that?

    So my constructive suggestion is that the council should reject this philosophy that the way to save Oregon is to join the battle of the ballot measures and to spare the legislature from doing its job. By giving up on the legislature and resorting to the initiative process, we may win a few battles here and there, but we will lose the larger war. The initiative process rewards simplification and distortion. It appeals to narrow self-interest, not the public interest. These are inherent attributes and they will never change, no matter how hard you campaign. In that environment, over the long term, do progressive policies really stand any chance against reactionary ones?

    On the other hand, there are more than a few conservative Republicans who campaigned on a simplistic anti-government, anti-spending platform, then got elected and realized that it's a lot harder than they thought it would be to slash education budgets, kill prescription drugs for the poor, and throw the elderly out of their nursing homes. The legislative process is a moderating influence.

    Progressives must make the legislature, not the initiative process, their friend. That is what the Bus Project has helped do so effectively. Ben should run Ben, not a ballot measure.

  • Jeremy Rogers (unverified)

    Oregon Constitution:

    Section 8. Adequate and Equitable Funding. (1) The Legislative Assembly shall appropriate in each biennium a sum of money sufficient to ensure that the state's system of public education meets quality goals established by law, and publish a report that either demonstrates the appropriation is sufficient, or identifies the reasons for the insufficiency, its extent, and its impact on the ability of the state's system of public education to meet those goals.

    Wet Blanket says:

    "A constitution should reflect our most enduring and considered judgments about how government should operate. It is not a place for setting budget priorities, which are revisited every year or two for good reason. If the public were so clearly convinced that education needs to be funded at the level that this proposal would require, then the proposal would be unnecessary because our elected representatives would already be doing it."

    Wet Blanket, it seems to me that budget priorities are already set in our constitution. Education is mentioned specifically because of it's importance to all other areas of a functioning government. While I do agree with you that the legislature is the best place to enact good public policy, I don't have nearly as much faith as you do that they will do the right thing unless they are held accountable.

    Under this package of measures, the legislature still does have the ultimate say in the level of state school funding. I'm not sure that it has been mentioned in this string of posts, but contained within the measures is a clause that allows the legislature, with a 2/3 vote, to not fund the education floor. As you can see above, our constitution requires a "report" from the legislature about why they didn't fund schools adequately. Why not a vote? It is votes, not reports, that we use to judge our elected officials priorities and hold them accountable.

  • panchopdx (unverified)

    Wanna generate tens of millions of dollars extra every year without raising taxes?

    Abandon the OLCC monopoly, sell of its assets and license the private sale of spirts. Institute a flat tax on alcohol content in all beverages (including beer and wine) and make sure that the flat tax does not exceed the current mean of state taxes and markups on the aggregate of alcoholic beverages.

    If you do it correctly, the then you aren't really raising alcohol taxes, rather you are simply reapportioning the current taxes equally among all beverage types. The result will be that beer in Oregon (currently taxed at about a penny a pint) would go up somewhat, while spirits (currently taxed with a 100+% state markup of wholesale price) would come down significantly.

    The resulting free market in liquor would bring in hundreds of thousands of Washington customers (who pay some of the highest alcohol taxes in the country).

    To make it happen you have to be willing to piss off the public employee unions (the OLCC employs a 100+ dues-payers) and the beer industry (Budweiser and the craft brewers will pitch a fit if you threaten their legislated market advantages over other beverages).

    The good news is that it would receive popular support from the "anti-government conservatives" (Don McIntire promoted this idea a few years ago).

  • David Wright (unverified)

    Jeremy, you are right that the Constitution currently reflects a budget priority for education.

    However, even that reflection of priority does not require an actual budget amount, unlike the proposal mentioned here. It says that we wish to fully fund education, but does not require us to fully fund education.

    I think that makes sense. Yes, education is important. Perhaps (though some would disagree) the most important thing that government provides. But locking in an actual required amount would give education an exclusive priority over everything else the state does. I don't believe that is the intent of the Constitution as it stands today, and I doubt very much that's the real intent of the citizens of the state.

    As for your argument about the 2/3 vote on underfunding, doesn't every legislator currently have to vote on the state budget as a whole? Why must we have a specific vote on the education portion of the budget? As a club to beat up a legislator who thought, for example, that maybe public safety or senior services deserved better funding than it could get if we fully funded education? Or, turn that around and beat up a legislator who refused to allow funding for those other programs?

    The budget must be considered as a whole. Anybody who doesn't like the amount spent on one area should be obligated to explain how they would pay for extra spending in that area, within the context of the budget as a whole (either by raising taxes or cutting funding elsewhere).

  • Jefferson Smith (unverified)

    Ben is aces: Setting the proposal aside, I think Ben Cannon should be groomed to be one of the State/National leaders on education and education policy. In terms of brains, compassion, communication ability, values, etc. he is a rare find in the national experience.

    I know this thing ain't about Ben, but he's aces. Note to lords of media and politics: Ben is worth making into a star.

    Best idea culture As for the idea, let's get into "best idea land." Let's advocate for a political culture where we look for creativity and courage -- and reward politicians and activists for it. As a more specific matter, we're not likely to pass too much meaningful stuff in this legislature. So let's figure out what would be the coolest thing to do -- education promise?, energy indpendence?, health revolution? And it would be very cool to bring it to the voters. I think Ben's stuff (also credit to Merkley and others) is good, but setting it aside, let's assume we should put something meaningful on the ballot for 2006. If 300 people each gathered 300 signatures, that crew could put almost anything on the ballot they wanted.

    Ballot Measures -- A blunt tool; but still a tool I happen to think that the ballot measure is not an evil. Indeed, I think the response to the frustration with ballot measures over the last decade is not to ban them and pretend they don't exist. Rather, as we learned from the free speech world -- and as my friend Joe has said many a time -- the answer to bad speech is more speech.

    The ballot measure, while it could certainly use reform, remains a tool for citizens to advocate for ideas that can't get through a captured or locked up legislature. And even if it's a blunt cudgel of a tool, we are only playing half of the game of Oregon politics if we pretend ballot measures don't exist and fail to use that tool. (We're actually gonna talk about that very thing at the Re-Booting Democracy Conference October 21st-23rd. Unintentional plug.)

    P.S. It looks like we just recruited a starting pitcher from Pomona to join the PolitiCorps program. If we have a softball team, it could be aces.

  • Sally (unverified)

    Your friend Joe must have been reading Justice Brandeis.

    "Aces" is just .... so cute.

    So, speaking of PERS reforms, how're the moves to consolidate school employee health insurance going? I've read, including from the governor, that it would stand to save about $50 million a year. Could be talking real money soon.

  • ron ledbury (unverified)


    The constitutional requirement to adequately fund education is important. The issue that I have raised regarding splitting PERS related costs for past work versus meeting ongoing education is pegged to what a court could do to force the legislature to act upon that portion of the constitution. The requirement for adequately funding schools cannot be used to compel any payments to PERS, only ongoing costs quite independent of PERS; perhaps to the point of sculpting out the PERS related stuff in the event that the legislature reaches a stalemate and chooses to do nothing.

    The most recent "report" that is referred to in the Constitution failed to raise the issue of PERS as a separate and distinct obligation. The propaganda line is to hide the PERS costs within the big school budget number so as to avoid further scrutiny of PERS.


    If the state compels participation in a medical health plan then it becomes like PERS. By this I mean that it is quite contrary to bargaining rights because it removes the issue from the scope of things over which collective bargaining agreements can cover. If the legislature has the right to set or control the rates demanded then a future legislature can pick either high or low rates and high or low benefits depending upon the whims of the cabal that controls the legislature in the future. It is, in my opinion, quite an affront to the "right to bargain" even if the benefits might today seem OK. Just imagine a future legislature picking a poor plan opposed to the desires of labor and simultaneously prohibits labor from negotiating anywhere other than in the legislature itself, that is they would be prohibited from lawfully striking to obtain better medical benefits. This may seem counter intuitive, but a state set medical health plan is not in the best interest of labor, notwithstanding the naive assertions of folks who claim to support teachers but who do not have the slightest understanding of labor law.

    This is why both medical plans and pensions must remain within the realm of negotiations over collective bargaining rights. My focus on the rights of tier-three teachers versus that of the tier-one teachers is based on the right to bargain for terms rather than have them set by the legislature. The tier-one folks have the ear of the legislature to the great harm of tier-three teachers and of advocates of the students and parents who wish to have healthy public education, and to the detriment of the community as a whole that would benefit from having educated kids in their midst.

    I believe in straight pay from which the worker has the liberty interest to pick their own pension and health plans and level of participation. A 22 year old teacher could pocket the 800 dollar per month health plan money that is spent in their name and they could pocket the "employer contributions" that are spent in their name but are exclusively for the benefit of the tier-one folks. The accounting wizards are hard at work to oppose the whole point of the discipline of accounting to generate accurate numbers to aid in formulating wise policy choices.

    (There are some messy federal laws regarding health plans regarding whether the employee pays any portion of the costs rather than zero. If the employee pays any portion of those costs it might, in the long run, cost the state for more than the immediate savings of 50 million dollars. The 50 million dollar savings number is not the issue, the real issue is the ability to promise future benefits for which there is no money to pay and then to do something like the Pension Obligation Bond crap to put money into an account for the State Treasurer to use to go on more merry social investing junkets; exacerbating the risk by exposer to investment variability. There are happy experts waiting to measure the future cost of future medical care obligations so as to justify huge bonds and to interfere with matching costs to the budgets that exist today.)

    PDXAPE.US would oppose a state mandated health plan for school employees.

  • Sally (unverified)

    Ron, you are frighteningly versed in this. I have the rather unusual distinction, it would seem, of being at least marginally interested from a lay or taxpayer's point of view. I was not aware that I was advocating for a state-mandated or chosen health plan. I was attempting to advocate for a cap on the ridiculous costs of the Portland teachers' plan, whose negotiations downward have not fared at all as they were promised a time or two a year or two back.

    From my living room view, it still seems this is an unresolved situation. I'm not sure how large this little elephant is. As I have said, it seems also from my readings that PERS contributions are set to swallow upwards of a fifth and even a quarter of state budgets. This seems vastly out of line with either other states or private industries.

    That "medical plans and pensions must remain within the realm of negotiations over collective bargaining rights" is not of concern to me if the public has better representation at the table. It seems to me that the farm was given away in the 90s, and now it's a bit like an interest-only loan where both the interest rate and the principal keep growing.

    It still seems to me that it is the (rogue) elephant that Oregonians keep straining around rather than meeting.

    Do correct me on the generalities if I am wrongly inclined.

  • ron ledbury (unverified)


    The public does not have better representation, at the bargaining table.

    The local budget law requires that the money spent matches the money available. There is a legislatively designed exception, all the crap from PERS (inclusive of the medical stuff than gets lumped into pension plan stuff) is carefully sculpted out such that there is no single entity that is held accountable for anything.

    The public would be well served by removing the exemption for the PERS slush fund stuff (regarding the Local Budget Law) and removing the freedom of lawyers and accountants to point to an outside expert actuary as an excuse for shirking their duty.

    If I were sitting in the shoes of our Multnomah County DA I would already have my indictments for official misconduct lined up and would be in the midst of a wonderfully glorious fight to get The Oregonian on my side in the propaganda war. My list would include various parties fighting for control of PGE, through the mechanism of deceiving the public on the issuance of bonds to cover pension-over-generosity (themselves unlawful at the outset) as part of a scheme to raise funds to make such purchases.

    Don't be surprised that the PERB consideration of the Portland fire and police pension scheme, and whether promises of payment 20 years out need to be funded today through borrowed dollars, is all wrapped up in the City of Portland PGE dealings! When good old Ted announces support for a wholly unsupportable (legally unsupportable exclusive City of Portland purchase of PGE) legal position then there is a billowing cloud of smoke that reveals the existence of a fire of corruption (well, just backroom dealings with the real movers and shakers) yet to be illuminated.

    Who has the power to tell our DA (and the AG) to stare off into the deep blue sea in a deep dark stare in a dereliction of his duty to protect the public from runaway public corruption?

    The rogue Elephant is not uncorrectable, it requires vast and escalating levels of support to sustain it. Any corrupt scheme just grows in intensity and the number of participants until it falls apart. I thought it would all pop this legislative session. I guess I'll have to wait two more years. ORS 238.600(2) says there is zero public liability for PERS stuff beyond the level of funding, which I would say means only the level of lawful funding which does not include one dime of the pension obligation bond money and the demanded "employer contributions." I had clumsily tried to stop the Measure 29 bonds but the political climate was not yet ready for an appeal to the Supreme Court, and I learned a bit about the arguments and tactics that would be needed to succeed.

    As to PAT and negotiations, the district spared the labor folks from the indignity of having to use their only lawful threat, that of striking, by letting the new superintendent call for a strike by promising during the ITax debate to cut school days. That is, the public has no advocate whatsoever . . . if you think otherwise then you are a victim of the well orchestrated propaganda campaign. The position of the public on the medical care issue should be to do nothing more than to be accommodative to individual employee desires about whether they wish to have some portion of their paycheck redirected, like an automatic deposit thing, to some particular provider of their own choosing. It is not the public that is limiting their choice, it is the politically connected forces in Salem that want to get clients and a steady stream of money the easy way rather than appealing to the public employees (as mere citizens rather than a captive market) in the same way they might have to advertise in the open market generally. (The OEA buys support this way, by selling off the liberty interest of their members to accomplish some other legislative goal.)

    Forget pension stuff and forget health plan stuff . . . just think in terms of straight pay within the time frame that matches the time when labor services are offered. Each day is a new day. Did you know that part of the funny business actuarial calculations for issuing bonds for pensions include assumptions of future raises that may or may not arise (they are just assumed). If the tier-one folk's raises do not materialize as assumed then it throws off the prior calculations for bond money? If we lowered the tier-one salaries by 4 percent each year, or did not give any raise, it would mean that we had borrowed too much money and thus could or should demand an immediate return of the excess dollars that had been borrowed. If I were a tier-three teacher I would vigorously say that those millions upon millions of borrowed PERS dollars are on the table today for my pay and for keeping schools open. There is no one that can tell me that the 250 positions that are being sacrificed in Portland are not directly related to boosting the pensions of the tier-one folks (based on formula based minimums and such). It is clear as day, and the tier-three teachers need the protection from their tier-one enemies with whom they are lumped together with (in one bargaining unit) in the so-called demand for more dollars to save, to save what . . to save the positions of the newer teachers? This is really sick stuff.

    I just need one good rich backer for the tier-three teachers that is willing to piss off the cabal of the bond buyers and bond counsels and bond rating folks and the local folks who are financially dependent upon the whims of local government use of bond dollars and the whims of the investment choices of the Oregon Investment Council (even if the motivations and beneficiaries are all clouded by indirection through Credit Swiss and Texas Pacific Group and Kolberg Kravis & Roberts and the like . . . ).

    [Sorry for the long post.]

  • Sally (unverified)

    Don't apologize, Ron; you're a full-time crank and I'm part time. LOL. I endeavor to savvy a bit more larnin'. :=)

    The worst denouncements I have heard of both PERS and the different PE tier plans (also in effect in Southern Oregon where I have a relative or two in gubment work) have been from those inside.

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