Kulongoski's Moment
In one very important way, Ted Kulongoski has a much tougher job than Barack Obama: he can’t print money. The State budget must be balanced. Within the next few weeks, the Ways and Means co-chairs will release a balanced budget proposal for 2009-11 – and it won’t be pretty. There will be terrible cuts; there will be tax increases. And there could very well be a political train wreck. Avoiding a train wreck will require every ounce of the considerable amount of political courage and talent in Salem – especially in the office of the Governor, who has by far the biggest bully pulpit.
Why is a political train wreck a strong possibility? Because – although I have seen no recent polling on this topic – I am quite confident that a large percentage of voters are not aware how limited the choices are. In 2008, the Progress Board’s survey of Oregonians showed that only 27% of Oregonians knew that education is the biggest item in the State budget. In 2003, Citizens for Oregon’s Future hired Davis and Hibbitts to ask Oregonians the question, what percentage of your income tax dollars go to services less important than education, health care and public safety? The average estimate was over 30%. In fact, of course, the answer is less than 10%. But if we assume that voters still believe that over 30% of the budget goes to ‘less important stuff’ – which I think is a very reasonable assumption – they will not see why taxes need to be raised, or education or health care or public safety cut. They will think the politicians are protecting the pet projects of special interests, and failing to address waste, fraud and abuse. And Republicans like Bruce Hanna will do everything they can to reinforce that perception.
I think Ted Kulongoski can do what needs to be done; I think he can set the stage for Ways and Means. There is tremendous courage and talent in the Governor’s office. In his very close 2002 race for Governor, Kulongoski – against the advice of some of his advisers – endorsed Measure 28, the temporary tax increase designed to try to avoid some of the savage cuts that resulted from that budget crisis. (I worked on his campaign, and was very proud that he rejected one out-of-state consultant’s suggestion that he claim that we didn’t need to cut services or raise taxes, we could just ‘cut the waste.’) Meanwhile, Chip Terhune, now the Governor’s Chief of Staff, ran the campaign for Measure 28. It lost – but by a much smaller margin than previous statewide tax votes, and by about 20 points less than it was originally expected to lose. It did better than expected because Chip’s underfunded underdog campaign let a lot of Oregonians know what was at stake.
But so far, in this crisis, I don’t think the Governor has taken full advantage of the bully pulpit. When he initially released his budget, the Governor downplayed the cuts; he shied away from explaining that he was cutting employment-related day care for the working poor, that he was eliminating dental and vision coverage from the Oregon Health Plan, that he was cutting assisted living payments for thousands of seniors with incomes between $1300 and $1900 a month.
Since then, the Governor’s best-reported comments on the budget have been perceived, at least by public employees, as attacks on public employees. He called on teachers to work for free; he’s called for over 20 furlough days for state employees. Now, there is no question that, in one way or another, public employees are going to have to sacrifice in this budget crisis. But the Governor should keep two things in mind when he talks about such sacrifice. One, he should be aware that cutting people’s pay is not something that most employers do lightly, even in recessions. As James Surowiecki of the New Yorker wrote recently,
“Even during the early years of the Great Depression, manufacturing workers actually saw their real wages rise, and wage cuts have been scarce in every recession since … After the 1990-91 recession, the economist Truman Bewley interviewed managers and labor officials at more than two hundred companies and found that most believed that wage cuts wreck employee morale and eat away at productivity. Whatever money they’d save by cutting wages, bosses assume, would be cancelled out by the decline in effort and the breakdown of trust that wage cuts would create.”
Two, he should recognize that public employees are a lot like everyone else; they don’t necessarily know the budget all that well, either, don’t know how narrow the options are. I have heard State employees say, in all seriousness, that they think the Governor is proposing lots of furlough days in order to punish SEIU for endorsing Jim Hill in the 2006 primary. I don’t think there’s a shred of truth to that. But in the absence of a full-court press to get everyone to understand the scope of the budget crisis, that’s the kind of reaction you have to expect. And yes, that’s damaging to morale.
There is still time, before Ways and Means presents its budget, for the Governor to prepare the voters – including but not limited to public employees, K-12 parents, and seniors - for what’s coming. I am not a subtle man, so for what it’s worth, here’s my unsubtle suggestion.
The Governor could schedule visits to every television station in the state. He could assemble a group of people to come with him on each visit. The group could include, for example:
• A home care worker who works with seniors
• One of the seniors that home care worker serves
• A parent who uses employment-related day care
• A day care worker
• A teacher
• A parent with a child in that teacher’s school
• A drug treatment counselor
• A prison guard
• A child protective service worker
• A foster parent
• A doctor who serves Medicaid patients
•
• A student in a state university
• A student in a community college
• And the state economist.
(I have not suggested having foster children / school children / day care children along, because it might seem somewhat exploitative, but maybe I’m being silly; maybe they should be there.)
The Governor could introduce the group, show the TV people a pie-chart of the State budget, and say: “These people ARE the state budget. This is what State government does. When the economy goes bad, people pay less income taxes, and the State loses money. When we lose money, these are the people immediately affected. I have already proposed, in my initial budget cutting services for thousands of people like [senior] and [day care parent], which means people like [home care worker] and [day care worker] lose their jobs. It also means that we lose money from the Federal government – every dollar we spend on caring for people like [senior] is more than matched by the Federal government, so when we spend less, we get less from Washington. And, as Mr. Potiowski will tell you, when these workers lose their jobs, it has a ripple effect throughout the economy; it means they spend less money in their communities, just like when private sector workers are laid off. Oh, and we also cut funding for drug and alcohol treatment – so [drug treatment worker] may lose her job – which will probably mean more crime, because as [prison guard] will tell you, a huge percentage of convicts are addicts and alcoholics.
“In my initial budget, I tried to avoid major cuts to schools. But unless we can raise new revenue, it looks more and more likely that there will be major cuts to schools next year – which means either that a lot of people like [teacher] will lose their jobs entirely, and we’ll increase class sizes, or we’ll cut the school year, so [teacher] might still have her job, but her pay will be cut.
“I shouldn’t forget that another significant part of the State budget is investigating complaints of abuse and neglect and taking care of abused and neglected kids. Our caseloads are already too high, and reimbursements for foster parents are too low; [case worker] has a hard enough time looking after the children he’s responsible for, and [foster parent] can barely afford to keep caring for his foster child. Again, without new revenue, we’re likely to cut caseworkers, which means the caseloads of those that are left will go up – and we’re likely to cut foster care reimbursement rates, which means that some people like [foster parent] won’t be able to do this anymore, which means it will be harder and harder to find suitable foster parents.
“Meanwhile, tuition for [university student] and [community college student] is going up. And I forgot to mention [doctor]. She’s one of the shrinking number of doctors who treats poor children and families on the Oregon Health Plan. We will probably wind up cutting her reimbursement rates, which means even more doctors will stop taking Health Plan patients like [child]. And again, every State dollar we spend on Medicaid is matched by more than a dollar and a half in Federal money – so when we cut her reimbursement rate, we’re giving up Federal money, it’s lost to our economy.”
I don’t know how many of the TV stations would use how much of that. But I am confident that some of them would use some of it. When I was with Citizens for Oregon’s Future, and we did “Where Your Tax Dollars Go” events on April 15, I was surprised at how receptive the TV news people were. If you made it TV-friendly, they would use it.
And of course it would be easy enough for the Governor to YouTube that presentation, and send it out into the world.
If the Governor can get through to people, the budget still won’t be pretty, but at least the politics won’t be disastrous. In fact, the Bruce Hannas will be the ones who look bad. I very much hope that Ways and Means will address some of the budget shortfall (only some; these measures only get you so far) by: (1) adopting a temporary 11% bracket for single people making over $250,000 a year and couples making over $500,000; and (2) at least temporarily, raising the tax on corporate profits from the 6.6% rate that currently applies to the 9% rate that applies to most of the taxable income of most Oregonians. (For a variety of reasons, I prefer that to any ‘corporate minimum’ proposal.) If the Democrats propose asking people and corporations who are still doing well, even in a bad economy, to help address the shortfall, the Bruce Hannas are sure to oppose it – which, if voters understand the alternative is even deeper cuts in education, health care, and public safety, will ultimately not redound to the political benefit of right-wing Republicans.
To anyone who knows me – I apologize for being a broken record. I’m obsessed with this letting-people-know-where-tax-dollars go business. But the fact is that people really don’t know. I don’t think we in politics have done enough to explain it to them. And it is absolutely vital, in a budget crisis, that we step up our efforts to give people that information.
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March 25, 2009 |
Steve Novick | Comments (69 so far)
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Posted by: Dave Porter | Mar 25, 2009 11:04:21 AM
Yes, I agree entirely. More public info on how the state spends it monies. And those are good ideas for Gov K.
The confounding, confusing aspect to our state budget dilemma is the federal stimulus package. I still do not understand what budget holes it did or did not fix. And, I predict, there will be a second stimulus package, maybe in the fall. So presenting the need for taxes increases to cover state budget holes will face the need to explain what a second stimulus package might cover. Seems we need our Congressional delegation speaking to that now.
Posted by: George Anonymuncule Seldes | Mar 25, 2009 11:16:31 AM
What do you think of this from Wiser and Tax Fairness:
Dear Friends of United for a Fair Economy in Oregon,Tax Fairness Oregon — UFE's economic justice partner in OR — has launched a creative postcard campaign to prevent crippling budget cuts by making corporations and wealthy Oregonians pay their fair share of taxes.
Send your post card and help improve Oregon's broken tax system!
As Tax Fairness Oregon puts it in their Action Alert:
Our state is in trouble. We are facing a $3–4 billion shortfall in our budget. If we do nothing, the state will have to lay off thousands of workers and undertake deep, painful cuts to schools, state troopers, courts, parks, and programs for the disabled and seniors.
Tell Salem NO to crippling cuts!
Times are tough, and we all understand the need for shared sacrifices — including sensible cuts across all sectors.
But to avoid gutting our basic public services, we will have to raise additional revenue. That is why we have signed onto the Fair Share Tax Reform campaign.
We want our elected officials to know that we can balance the budget without crippling cuts — if corporations and the wealthy pitch in and shoulder their fair share of the cost of government.
Send a postcard to your lawmakers demanding that corporations and the wealthy pay their fair share.
Oregon has shifted the responsibility for taxes away from corporations and onto individual taxpayers and small businesses over the last 30 years. Corporations used to pay 16% of all Oregon income taxes; today they only pay 6%.
When hard times have hit Oregon in the past, wealthy Oregonians were asked to step up and pay their fair share. During the recession in the early 1980s, taxes were raised on upper–income Oregonians. Today, however, working families and the very rich pay the same tax rate.
Click here to send a postcard demanding Fair Share Tax Reform.
Working families should not bear the brunt of the budget crisis alone. Let's get through these hard times the only way that's right — by asking everyone to pay their fair share.
Sincerely,
Jody Wiser
Tax Fairness Oregon
Posted by: Jenson | Mar 25, 2009 12:24:40 PM
The last tax hike failed during the last recession because all they did was raise the tax rate. Our 9% rate starts at $7,600 of taxable income for an individual, while the personal exemption credit barely serves a purpose.
If we want to raise taxes without seismic backlash from the middle class, then it becomes imperative to raise the tax brackets as well. Novick suggests an 11% tax rate for amounts over $250,000. Hello? Can nobody see the massive gap between $7,600 and $250,000 that needs to get filled?
Where are the tax brackets in between? Look at California's income tax code for a better structure.
Posted by: Rickety | Mar 25, 2009 12:56:38 PM
Steve, right on the money. It is also correct that the time for Tax Code Progressivism is now. If people start to understand that the last 30 years have merely been the Great Tax Shift, from Corporate to Personal, and from Really Big Income to Really Small Income, the Governor's task should be relatively easier.
And lets talk about new classrooms, new labs, new media and technology learning centers, new open campuses for the out of work and new approaches to learning. We need the time and money to develop educational strategies and personnel which can get us out of this slump. Its been 40 years of slump, hidden by massive borrowing.
Thanks Mr. Novick.
Posted by: Kevin | Mar 25, 2009 1:11:29 PM
I think TJ makes a fair point. The power of the bully pulpit is weakened by disuse.
Posted by: Noah Heller | Mar 25, 2009 1:19:48 PM
Thanks George for posting the email from Tax Fairness Oregon.
We have just launched the Fair Share Tax Reform campaign to address the concerns Steve Novick outlined.
Oregon can balance the budget without crippling cuts — if corporations and the wealthy pitch in and shoulder their fair share of the cost of government.
Please send a postcard to your elected officials to tell them to responsibly balance the budget by requiring corporations and wealthy Oregonians to pay their fair share.
http://www.taxfairnessoregon.org/fairsharetaxreform
-noah
P.S. If you want more information about the Fair Share Tax Reform campaign, check out the website:
http://www.taxfairnessoregon.org/fairsharetaxreformactioncenter
Posted by: Jamais Vu | Mar 25, 2009 1:34:26 PM
Courage and coherence both seem lacking to date; the bully pulpit requires both.
PR campaigns are useful later in promoting a consensus once it is reached; unfortunately, the governor has been largely silent on solutions and remiss in bringing even the Democratic super majorities in each legislative branch into a discussion of solutions. The legislators I've spoken with, especially in the senate, appear to be riding off in different directions without guidance.
You said there should be cuts and tax hikes, but I've seen no evidence that the governor is trying to bring the Democrats together to use the opportunity to implement true tax reform. Why is it left to Ben Cannon and not the governor to propose a beer tax? Why is there no effort at all in promoting the sales tax every economist and most voters know the state must have to stabilize our finances?
The bully pulpit would be useful for getting voters not to support the inevitable ballot initiatives to stop intelligent and sustainable tax policies from going into effect, but the governor needs to start by building a coalition on his own side of the aisle. Otherwise we're going to lose a unique opportunity to undo 20 years of stupid ballot measures as we go on fiddling while Rome burns. Just where, exactly, does Kulongoski propose to lead us? It would be nice to know.
Posted by: Miles | Mar 25, 2009 1:35:52 PM
Steve is, predictably, right on the money with this advice. The Governor could even simplify the presentation by just carrying around a large pie chart that shows where the money in the state budget goes. Every time Bruce Hanna says, "We can just cut the waste" the Gov and Democratic legislators should hold up the pie chart and ask "From where?" Part of the problem is that we always let the Rs make generic claims without demanding specifics. We need to demand the list of specific cuts. And they will come up with a few million, maybe even tens of millions since there IS waste in the budget, and when they do we need to say "Thanks, you've now filled X% of the gap, what about the rest?" Even if they come up with $100 million in waste, that's less than 4% of the total $2.5 billion (and growing) shortfall.
My recollection of M28 is that while Kulongoski endorsed it, neither he nor many Dems actively campaigned for it. Whatever tax increases are passed this session will be referred to voters, guaranteed, and I hope that the entire delegation campaigns strongly for them. Tax increases will always be political losers, and some Dems will inevitably lose their seats over this, but politics shouldn't be about winning reelection it should be about making the right decision even when it's difficult. With enough leadership we can survive the referral and get back to building a more stable fiscal foundation for the state.
Posted by: Abby NORML | Mar 25, 2009 1:53:27 PM
And what per cent of the State's budget goes to imprisoning non-violent marijuana offenders? Like you say, political courage is required.
Posted by: De Admiraal van Gent | Mar 25, 2009 1:58:32 PM
Put another way, we have to stop criminalizing behaviors that aren't otherwise criminal, for no net social gain. It's a far broader phenomenon, and it's an imperial luxury this state can not afford.
Posted by: Mrs.Todd | Mar 25, 2009 2:07:37 PM
It is IMPOSSIBLE to go to prison for user amounts of drugs in Oregon and this includes OVER an ounce of marijuana. Drug crimes are ranked as a category 1 on the sentencing guidelines meaning that even with 100,000 dope convictions the presumptive sentence is 10-30 days in jail. Even a departure sentence based on persistent involvement is 6 mos in county. Manufacture of Marijuana is a category 4 crime- meaning most people do no more than 60 days in jail (and that requires a finding that there is jail space otherwise it is 20 days). If you have say three murders on your record then your sentence as a 4-A would be 10-11 months which is not even prison- which has to be more than a year.
Trying blame the state's budget problems on enforcement of the drug laws is based on emotion and not reality. Now, having the govt. exclusively cultivate and tax the hell out marijuana is something worth talking about.
Posted by: Douglas K. | Mar 25, 2009 3:05:13 PM
I want to echo the need for greater progressivity in our income tax structure. We need to set up meaningful brackets 5%, 7%, and 9% brackets and index them to inflation. Right now, nearly everyone -- including full-time minimum wage workers -- winds up in the 9% bracket. Offering meaningful tax relief to a majority of Oregonians would make higher taxes on a small number of wealthy people more palatable at the ballot box.
having the govt. exclusively cultivate and tax the hell out marijuana is something worth talking about.
I think that "taxing" marijuana would require some other party sell it, which is illegal under federal law.
Now if the State of Oregon cultivated, harvested, distributed, and sold marijuana, with everything done by state employees on state property, it would be a State function and the federal government couldn't do a thing to stop it. (Well, not directly anyway; they could cut off federal highway money as a punitive response.)
Posted by: mp97303 | Mar 25, 2009 3:22:08 PM
I see this line all the time with this issue: Corporations used to pay 16% of all Oregon income taxes; today they only pay 6%.
Does anyone know if this is possible due to population growth exceeding corporation growth?
Posted by: Torridjoe | Mar 25, 2009 3:25:44 PM
Douglas, I believe that's what the billl currently in the Leg provides for, although I'm not 100%.
Posted by: mp97303 | Mar 25, 2009 3:25:45 PM
Please send a postcard to your elected officials to tell them to responsibly balance the budget by requiring corporations and wealthy Oregonians to pay their fair share.
Can we once and for all state explicitly what their "fair share" is? Either a percentage of state revenues or some specific dollar amount. This never ending call for "fair share" cannot even be discussed until "fair share" is defined in concrete terms.
Posted by: torridjoe | Mar 25, 2009 3:54:11 PM
MP--how about what their share used to be in the 70s--18.5% instead of the current 4% or so? Hell, I'd settle for 10%, these days. So let's say explicitly, 10%. You want to write the bill, or should I? ;)
Posted by: Joe Hill | Mar 25, 2009 4:02:36 PM
What is the fair share of corporations and wealthy individuals?
Divide the WEALTH (not the income) of the corporation / individual into quintiles.
Tax the bottom 20% at 0.
Tax the next quintile at 3%
Tax the middle quintile at 10%
Tax the next quintile at 17%
Tax the highest quintile at 25%.
I believe that this will come close to funding the state's obligations, including what we should be spending on education.
Posted by: mp97303 | Mar 25, 2009 4:27:21 PM
@Joe Hill: by wealth do you mean net worth (assets - liabilities)?
Posted by: Frank | Mar 25, 2009 4:35:30 PM
Oregon has the LOWEST corporate tax rates in the nation. If Oregon just raises the corporate tax rates to the national average, there no need for any state budget cuts of any kind.
Posted by: Joe Hill | Mar 25, 2009 4:52:02 PM
Yes. Wealth = net worth. See Krugman et al. for the hyper concentration of wealth in the top .001%, a redistribution of wealth toward the top end of the top quintile that has been going on since about 1968 and accelerating since the Reagan era.
As Yogi Berra says, "You could look it up."
Here, for example, is an OK article (now a bit outdated and hence understated) about the wealth tax.
http://bostonreview.net/BR21.1/wolff.html
Posted by: mp97303 | Mar 25, 2009 4:56:53 PM
@Frank
Cali has some of the highest corp tax rates in the country and yet...
Posted by: mp97303 | Mar 25, 2009 5:15:01 PM
@ Joe Hill
Very interesting article. Although, I suspect that the only thing that would accomplish is to boost the financial planning industry. You can rest assured that they would find a way to move their assets off shore and I suspect they would leverage the hell out of their homes.
Posted by: Frank | Mar 25, 2009 5:26:01 PM
mp97303 "@Frank
Cali has some of the highest corp tax rates in the country and yet..."
And yet... WHAT? And yet California is having some budget problems WHILE paying for
- a nearly free community college system,
- one of the cheapest AND finest public university systems in the country,
- a massive CA state committment to affordable housing for low income people,
-mental health care,
-and dental care and glasses for the poor on the CA versions of medicare and medicaid.
Posted by: LT | Mar 25, 2009 5:52:28 PM
Even if Ted Kulongoski had the persuasive skills of Barack Obama and could convince even half of all Oregonians of calling at least their own legislator and then also 2 friends asking them to call their own legislator and repeat exactly what Steve Novick would have them say, there are legislators who would refuse to listen.
Many Oregonians are very busy in their lives. And the ability of legislators to agree with differing opinions varies widely.
In the end, even with the most persuasive Gov. possible, it is legislators who vote on the budget.
I called a number of legislative offices today after reading this:
http://www.statesmanjournal.com/article/20090325/LEGISLATURE/903250434
Republicans offer own economic stimulus plans
March 25, 2009
Provide matching funds for federal grants to improve airports, $7.7 million to obtain $128 million.
<<
I asked the Republican offices where the $7.7 million would come from--it has to be paid for somewhere. Some said "you make a good point" when I said any legislator who could identify $7.7 million sloshing around in the budget should provide that information to Ways and Means. One anti-tax Republican staffer reacted by saying "Oh, so you like ---'s proposal better?" in a hostile voice.
When I said, "No, any duly elected legislator whose salary comes from the taxpayers should not propose something that is not paid for, and if that legislator knows where $7.7 million can be found in the budget, it is that legislator's duty to inform Ways and Means, esp. when a co-chair was on the radio yesterday saying all agencies should prepare for drastic cuts if the May forecast is a lot worse than expected".
All the staffer said was something like OH!
Reality of 2009 is that some working families are 2 income families with an infant or toddler--how much time do they have to watch TV? How many households are multi-generational these days--not just parents and children but maybe also a grandparent? What about the people who travel for work--long distance commuters, outside sales people, etc. ? How about the folks working weird hours (retail, child care, any split or untraditional shift) or multiple jobs?
Here's a suggestion: there is a big wide world out there of people who don't necessarily watch much TV outside of sports and a few shows, don't blog, but are very involved in work, family, church (which these days may include working in a food pantry run by the church) as well as household chores, hobbies, etc. I spent time this weekend with my grandnephew, his Mom and his Grandma--all too busy to follow the ins and outs of politics. I found their state rep.'s name for them in case they had any concerns.
If everyone here who blogs, reads columnists, and/or is a political activist would spend time with such non-political folks and listen to their concerns, it might be very educational. Lots of Oregonians either know someone who has been unemployed in the past year or has been themselves. They don't have to be told what effect that has.
There are people who have been reminding Republicans for years that in the end they didn't come out looking great after Measure 28 & 30. There WERE budget cuts!
A W & M co-chair from those 5 special sessions is now the State Treasurer, while the Mystery Money crowd who said "don't worry, there is money in the budget to avoid drastic cuts " has largely faded from the scene. "The voters spoke" loudly in the 2006 and 2008 elections.
Personally, I'd like to see a comparison somewhere between the Fair Share Tax Plan and the work of the Revenue Restructuring Task Force. I have seen no serious pushback when I have said to legislators and others that I thought the Revenue Restructuring Task Force work should be debated openly.
And there are apparently a couple different efforts to review the Tax Expenditures in this state--members as diverse as Chuck Riley and Sal Esquivel.
Posted by: Richard | Mar 25, 2009 6:12:37 PM
Do any of you know the size of the budget hole that needs addressing?
Among many other cuts, there is no question there must be teacher pay cuts to keep students in school.
Increased co-pay for health care and dumping of dental and optical may be needed too.
That sounds just horrible but the OEA is not going to find the money for it's members to keep the status quo.
Now get this.
Rumor has it that the Governor has informed legislators that he's been warned that the May forecast could show a deficit of $6 Billion.
That's twice the $3 billion the Oregonian editorial chin rubbed about and well out of reach of Novick's supposed remedy.
Now my question to you Democrats is,
Are you going to be recycling the Gov. Barbara Roberts, "All the cuts have been made. We need more revenue or people will die on the streets" routine?
Posted by: Steve | Mar 25, 2009 7:48:09 PM
"this letting-people-know-where-tax-dollars go business."
You have my vote. For all of the politics that go in, there is this assumption that the voters either don't need to or want to know how tax dollars are spent.
It is such a poor markeintg job Kulongoski has done, he needs to accept some of the blame for the failure of any tax increases. I am not against, paying more taxes, but knowing that the taxes are spent wisely makes it a lot easier sell.
Posted by: LT | Mar 25, 2009 8:24:51 PM
"Among many other cuts, there is no question there must be teacher pay cuts to keep students in school.
Increased co-pay for health care and dumping of dental and optical may be needed too.
That sounds just horrible but the OEA is not going to find the money for it's members to keep the status quo. "
In December, the E Board made cuts to school funding.
In January, the Salem Keizer School Board went along with the Supt. and gave top administrators pay increases and a car allowance.
Richard, I would like you to explain what role the OEA had in these administrative pay increases:
http://www.statesmanjournal.com/apps/pbcs.dll/article?
AID=2009901140434
Think back to the leader in the 5th special session around the turn of the century who said in answer to a question, "The reason we are having trouble balancing the budget is that Gov. Roberts was right in everything but the timing". Was that member of Republican majority leadership run out of town on a rail, or did that statement impress ordinary people?
There wasn't a recession the years after Measure 5 passed, but there was early in this decade.
Are you looking for solutions, Richard, or just looking for an opportunity to bash Democrats?
Posted by: confused | Mar 25, 2009 8:30:06 PM
Can someone please clarify the difference between SPENDING money vs. ALLOCATING money? The state budgeting process does not spend money -- it allocates money. You can't just simply say that "X" percent of the budget is spent on education, because it's not. It's ALLOCATED to education.
Let's take a hypothetical situation as an example: If the state allocates 50% of the budget to education and the various school district administrators then take that money and spend half of it on hookers and cocaine, did the state spend the money on education? No, they did not and it's disingenuous to say otherwise.
Whether you want to admit or not, the state ALLOCATES a huge amount of money to education that is subsequently spent to provide blue-ribbon health and retirement benefits to workers, which last time I checked, had absolutely nothing to do with educating children.
So, let's please stop with the child's game playing with numbers and pie charts. The tax payers' can see the truth through the lies and misrepresentations and all it does it obfuscate what's really going on at the SPENDING level vs. the ALLOCATION level.
Posted by: mp97303 | Mar 25, 2009 8:30:38 PM
@Frank
Calling what CA went through "some budget problems" has got to qualify you for understatement of the year.
On Jan. 24, 1848, James Wilson Marshall found gold at Sutter's Mill, in Coloma, Calif., sparking a mad rush of some 300,000 people desiring to strike it rich. San Francisco grew from a tiny hamlet to a boomtown in no time, and in 1850 California entered the Union as the 31st state.
With this history at their back, state leaders might have understood that people have a propensity to get up and move when a better life is to be had elsewhere. But no. After more than 150 years of being a destination, California is becoming a place entrepreneurs, investment capital and the hardy workers who made it a global leader in agriculture, technological innovation and scientific research are fleeing. This exodus is the marker of something deeper than a national recession. It's a sign that the attempts by state leaders to spend their way back to prosperity are killing California.
While it has the sixth highest tax burden in the nation, according to the nonpartisan Tax Foundation, California is facing a breathtaking $40 billion budget deficit this year. This comes on the heels of a decade-long spending spree. Last year the state budget was $131 billion, up from $56 billion in 1998.
Citizens are burdened by all manner of state regulations. To mention just one example, this year a new law enacted by ballot initiative bans cages chicken farmers use on the grounds that it is inhuman to put birds in cages that prevent them from spreading their wings. Complying with the new law will cost farmers hundreds of millions of dollars, which will force many to leave the state. And that will force us to buy our eggs from other states and, possibly, others nations, such as Mexico...
source
Posted by: john springer | Mar 25, 2009 8:53:42 PM
OK, at the risk of being labeled an idiot, here's what I think: Dump the General Fund.
No-one knows what's in it; no-one wants to spend money on some nameless cause.
I learned something many years ago when Santa Clara county tried to pass a sales tax increase and failed several times, until they finally said "this tax will fund these items." Then it passed. People are willing to spend money on something if they know what it is.
So I think on the bottom of my income tax return I should be entering
x% of agi for schools,
y% of agi for health systems,
z% of agi for courts and prisons.
$c contributions for cool non-profits
My total tax: $t
Everyone knows what they're spending money on because they write it down on their own tax return.
The second shoe to drop is that every bill .. most especially initiatives .. needs to include the revenue source that pays for the bill. No more free lunches. No more nameless "general fund".
Posted by: Frank | Mar 25, 2009 9:08:11 PM
mp97303 "Calling what CA went through "some budget problems" has got to qualify you for understatement of the year.
On Jan. 24, 1848, James Wilson Marshall found gold at Sutter's Mill yadda yadda more long-winded neo-con "tax cuts are the solution to all government problems, business problems, drought problems, bowel regularity problems, etc." yadda yadda yadda.
---------
The solution to biggest part of California's budget problems is a national single payer health insurance program. Single payer health insurance reduces the cost of health care on the economy to half it's current cost.
Much of the rest of the solution is going to have to come from DC. California was hardest hit by drop in house values caused by the mortgage mess. There's going to have to be some short term help from DC to cover the loss of the tax base that happened when house values dropped.
Posted by: alcatross | Mar 25, 2009 9:59:02 PM
Frank says: Oregon has the LOWEST corporate tax rates in the nation.
eh... no
http://www.taxadmin.org/fta/rate/corp_inc.html
and
http://www.taxfoundation.org/publications/show/22917.html
Nevada, South Dakota, and Wyoming have no state corporate income tax. Oregon may have the lowest corporate minimum tax ($10) but there are 15 to 20 other other states that have corporate income tax rates as low as or lower than Oregon.
Frank also says: If Oregon just raises the corporate tax rates to the national average, there no need for any state budget cuts of any kind.
Source for this claim, please?
Posted by: Siabh | Mar 25, 2009 10:34:07 PM
You're so full of crap Steve (and I voted for you as marginally the least of the odious, so screw off with any typical ivy-league arrogant response). Your attempt to sound gubernatorial by offering irrelevant, pompous advice to a governor who has been nothing except a shining example of self-serving juvenile incompetence that knows no party in our time, is so transparent it makes you look anything but gubernatorial.
The train wreck has already happened and the perfect shit storm that is coming in 2010 from the pissed off masses (exactly what the Founders feared, by the way), is either going to be the end of our liberal democracy as we know it or, just maybe, exactly the watershed event we need to save it. For sure, we don't have a chance unless the people vote out most of the arrogant old farts in Salem and DC, along with the younger fatheaded punks who were elected only because they are well suited to the utterly dysfunctional condition of our state and national government.
For those of you who deserve to be slapped around more by reality because it's the only way you'll learn (that counts out most of you ignoramuses here who are incapable of learning), read Tiabbi's piece in The Rolling Stone. And note carefully his comment in the 13th graf about the bi-partisan support for the Gramm-Leach_Billey Act of 1999 repealing Glass-Steagull. Wyden and Smith both voted for repeal in the Senate, as did Hooley and that biggest ignoramus in the Oregon delegation Blumenauer in the House.
Posted by: alcatross | Mar 25, 2009 10:35:15 PM
Frank says: California was hardest hit by drop in house values caused by the mortgage mess. There's going to have to be some short term help from DC to cover the loss of the tax base that happened when house values dropped.
If not the hardest hit, California was certainly among the hardest hit, true. But California's problems started long before and are more deeply-rooted than just the mortgage mess (think: decline of a once-thriving manufacturing sector replaced by service sector jobs generating less tax revenue, aerospace and automotive plants folding up and leaving, former Gov Gray Davis budget deficits, the dot.com bust, and rising outmigration of skilled middle-class households, etc)
These are serious structural problems. It's going to take more than national single payer health insurance and other 'short-term help from DC' to fix California's $40B+ budget shortfall issues.
Posted by: torridjoe | Mar 25, 2009 10:49:56 PM
"Source for this claim, please?"
He's referring to the COST study, which was funded by some of the major world multinational corporations. You may find fault with their methodology, but it's certainly a business--interested model. They found Oregon's tax burden to be 49th, actually, just ahead of Connecticut.
It was OCPP's claim--just math, really--that if Oregon's rate were the national average, it would represent a difference of 1.6bil per year. With a projected 3bil deficit for the next biennium, it would actually yield a $200mil surplus!
So there you go.
Posted by: Frank | Mar 25, 2009 11:34:30 PM
Alcatross "Frank says: Oregon has the LOWEST corporate tax rates in the nation.
eh... no
http://www.taxadmin.org/fta/rate/corp_inc.html
and
http://www.taxfoundation.org/publications/show/22917.html
Nevada, South Dakota, and Wyoming have no state corporate income tax. Oregon may have the lowest corporate minimum tax ($10) but there are 15 to 20 other other states that have corporate income tax rates as low as or lower than Oregon.
Frank also says: If Oregon just raises the corporate tax rates to the national average, there no need for any state budget cuts of any kind.
Source for this claim, please?"
----------
Eh, no yourself, Alcatross.
From a post Chuck Sheketoff put up here March 3
"Oregon Business Taxes: We’re number 2 (lowest)
A new study funded by big corporations found that Oregon has the second lowest state and local business taxes among all states and the District of Columbia and that businesses get a better deal for the taxes they pay in Oregon than just about anywhere else in the country.
The study’s data suggest that Oregon’s state and local business taxes are so low that the state could raise business taxes by $1.6 billion annually and still be in line with state and local business taxes nationwide.
In the study, Oregon tied with Connecticut for the second lowest business taxes — state and local taxes combined — as a share of the state economy among all states and the District of Columbia. Only North Carolina has lower business taxes than Oregon, according to the study.
The accounting firm Ernst & Young conducted the study on behalf of the Council On State Taxation (COST), an association of over 600 multistate and international corporations that lobbies on state tax policy. COST does not disclose its membership list, so it is not known which multistate or multinational businesses operating in Oregon are members of COST.
The big business lobby says that Oregon is one of the cheapest states in the nation when it comes to taxes. Their study finds that businesses in Oregon pay state and local taxes totaling 3.7 percent of the private economy, compared to 4.9 percent for businesses nationwide."
http://www.blueoregon.com/2009/03/oregon-business-taxes-were-number-2-lowest.html
Posted by: LT | Mar 25, 2009 11:44:47 PM
It would be interesting to know how Oregon ranks in regard to tax breaks.
There are those who say we are drowning in them, more money going out than coming in, which may be why there is a bipartisan effort to examine each and every one. Maybe even get rid of some of the ones which have outlived their usefulness or otherwise can't be justified.
Posted by: Roger That | Mar 26, 2009 1:38:43 AM
I don't disagree with you, Mr. Novick. We've been here since 1990 when Ballot Measure 5 put a constitutional limit on property taxes, and Barbara Roberts was elected governor. We've been having the same fight for nearly twenty years. We're not idiots, and we are equally frustrated. You are preaching to the converted here, which is somewhat excusable at blueoregon, but you're also talking down to folks, and applying a buttload of "should"s to our governor.
Here's what I'd like to see you do:
Get your tax increase proposal written up as an initiative. Get out there and gather the signatures. And spearhead the campaign to pass the initiative yourself.
You obviously have considerable talent advising campaigns, and, from what you said in your post, you saw Chip Terhune's efforts to pass Measure 28 from up close -- so no one's better prepared to lead this campaign than you. And you've already laid out in your post just how to make the case to Oregon voters.
Individuals vote -- not corporations -- and a vast majority of those individuals make less than $250,000. After the Bush/Wall Street meltdown, the time may be ripe to put such an initiative before the voters.
Plus, an active initiative push may be just the thing to leverage some real results out of Salem.
So how about it, Mr. Novick? Are you willing to go out and do what you say the governor should do?
Posted by: Torridjoe | Mar 26, 2009 8:44:46 AM
Roger, I don'tthink anyone could fairly accuse Steve Novick of not putting his effort where his mouth is. Even his Senate race was basically predicated on the concept of "if you won't do it, I will."
Posted by: alcatross | Mar 26, 2009 9:20:20 AM
Frank says: Oregon has the second lowest state and local business taxes among all states and the District of Columbia
Frank, you did say 'LOWEST corporate tax rates in the nation' - not lowest business tax burden, receipts, or whatever... Most people would interpret 'LOWEST corporate tax rates' to mean corporate income tax rates - not immediately the rather arbitrary definition of business taxes coined by this COST study. It would have helped if you had provided the reference link initially - and, per this COST study, your 'LOWEST' claim isn't precisely true - but no matter...
The big elephant in the room here is obviously Oregon's lack of any general sales tax - which accounts for over 22% of the total state and local 'business taxes' as defined by this study. If you subtract sales tax out, you'll find that Oregon's other 'business taxes' (property, excise, corporate income, unemployment, etc) are already pretty much in line with the national averages per this study.
Regardless the definition of this study, many (myself included) would argue that a general sales tax is more a tax on individual consumers than businesses.
If you think Oregon is ready to absorb $1.6B in general sales tax (which would largely come out of your and my pockets - not businesses...) to get ourselves totally 'in line with state and local business taxes nationwide' - go for it!
(But expect to meet some popular resistance...)
Posted by: Roger That | Mar 26, 2009 11:43:17 AM
T. Joe...Jeff Merkley did it. Maybe you forgot.
And Novick sent out a campaign flyer a week before the election alleging Merkley had failed to provide health care for Oregon's children. His mouth was active for votes, but when Merkley and other Dems were working their rears off trying to get it done (which required 5 Republican votes in the House), Novick was pretty quiet, and when the cigarette tax to provide health care for children was put on the ballot, Novick didn't actively campaign for it.
So I think it's fair to say that sometimes Mr. Novick's efforts have been at odds with what he suggests others should do.
And I think it's a little too easy sometimes to put on a costume and sing "If I Were King of the Forest."
Mr. Novick has plenty of advice to offer -- indeed, I quite expected to see an invoice attached to the end of his post.
Still -- I don't disagree with his tax increase proposals, and I'd love to see him take action on his own advice and put an initiative before the voters. How about it, Mr. Novick?
Posted by: Torridjoe | Mar 26, 2009 12:16:28 PM
Uh, no Merkley did not "do it;" he got into the race months after Novick, and as the 8th choice of Chuck Schumer. Novick got in when DeFazio and Blumenauer wouldn't take the risk.
Novick's message on OR-SCHIP was accurate--Merkley failed to get health care passed, by stupidly making the bill a Constituional referral. It did not need 36 votes, as an opinion Merkley held but did not proffer indicated. It wasn't a revenue bill at all; it was a voter referral. And the prospect of a GOP House member suing the Leg for asserting that fairly obvious point is absurd. The bottom line is that Merkley knew how many seats he had when he promised he'd get it done, so that's no excuse.
Again, it's absurd to talk of Novick as all talk. Or do you forget him almost singlehandedly forcing cuts in retail shares of lottery funds? His work turning the Senate towards the majority it now enjoys? Really, now.
Posted by: steve Novick | Mar 26, 2009 12:22:58 PM
Roger - just so you know, I personally knocked on doors for the cigarette tax increase- raised money too. Best, Steve
Posted by: Kevin | Mar 26, 2009 1:33:44 PM
1. Some of us disagreed with BOTH Steve and Jeff on the regressive tax funding scheme for OSCHIP. Similarly, as I recall there was no shortage of advocates for the regressive concept who agreed with the reasons for it being referred to the voters.
2. It seems unreasonable not to mention illogical to assume that Steve Novick or any other public figure somehow does nothing beyond what gets reported by the media.
3. It seems to me that Novick's suggestions in this post rise or fall on their own merits. What happened in past political campaigns doesn't change that one way or the other.
Posted by: roger that | Mar 26, 2009 2:37:20 PM
I appreciate your update, Mr. Novick. If you knocked on some doors for the cigarette tax, then thanks -- you did actively support the measure. You were already campaigning for the senate, as I recall, when that measure came before voters, and I don't recall any long posts here at blueoregon by you advocating for its passage, or that the issue was highlighted by your senate campaign. But I agree with kevin above -- that the media doesn't report everything you do.
Still, what troubled me was mischaracterizing Merkley as having failed on this issue, in a last ditch campaign flyer, when you know he only had 31 Democrats in the house, and you know every measure to raise taxes put on the ballot generally fails. It's seems too easy for non-office holders to nitpick at the records of office holders, and say on Monday morning what they "should" have done. Do you regret that flyer now, or will we see more of the same for your Democratic opponents in the future?
And was that a non-answer on spearheading an initiative?
Posted by: Roger This | Mar 26, 2009 6:34:16 PM
And Novick sent out a campaign flyer a week before the election alleging Merkley had failed to provide health care for Oregon's children. His mouth was active for votes, but when Merkley and other Dems were working their rears off trying to get it done (which required 5 Republican votes in the House), Novick was pretty quiet, and when the cigarette tax to provide health care for children was put on the ballot, Novick didn't actively campaign for it.
"Roger That' is an example of the smug, ignorant, low-class people who are destroying the Democrat Party in this state.
The reality is that Merkley and a bunch of arrogant, elitist limousine liberals refused to actually work for sustainable, moral funding for health care for children. Instead he joined with a bunch of economically comfortable interests who he was courting to support his run for U.S. Senate as his next self-centered career move, and who he wasn't going to think about taxing, to put forth a regressive tax. When the tax and Merkley's morally bankrupt values were soundly rejected in the Nov. 2007 election, Merkley saw his election chances slipping away. Advocates for health care for children got in the elitist face of Princeton graduate Merkley and the Democratic leadership in the Senate to actually raise taxes to fund SCHIP in a progressive way, Merkley personally thumbed his nose at them and ordered that no such legislation be brought forward in the 2008 special session.
Posted by: Kevin | Mar 26, 2009 7:36:35 PM
Sheesh... I can hardly wait for Spring Break to be over and all the children go back to fighting on the playground and shooting spitwads at each other...
Posted by: rlw | Mar 26, 2009 8:19:39 PM
Include that State Economist ONLY if it's not that horribly precious chap who talked in poorly-rhymed and cutesy ditties back in 2000 and babbled on about jobless recoveries... while PC attendees scooped salmon and endive and did not notice there might be terminally-jobless in the room, NOT feeling the recovery any time soon. Let's please not be precious about THIS deepening of the crash-boom of Oregon's hemorraging economy.
Posted by: rlw | Mar 26, 2009 8:27:18 PM
Also, regarding the tobacco tax. The ceremonialists who live among you, the ones who travel far to make hard prayers, they are abuzz with the fact that now, the cheapest loose tobacco (doubtless the stuff they sweep off the floors) we buy at 22-25 bucks a 1 - 2 lb bag to tie in prayer ties and make as prayer offerings for our ceremonies, will be forty dollars a bag after April 1. Multiple sources have weighed in to verify this as fact!
I find it magnificently par for the course that the legislators have been true-blue culture-blind in this legislation. NOBODY much smokes that crap, folks. Except the homeless and the really, really poor. Honestly! The rest of us are using this for our prayers that do not involve smoking.
Many of us really do not know how we will continue our cultural life in the face of this reported doubling in price, coupled with gas prices that have rendered the travel to ceremonies a matter of saving year round, year after year. Is it legal to import seeds and grow tobacco? We hope so. We are researching it. Is it legal for us to send to our relations on the reservations to hope for lower prices for our non-sin-useage? It appears not. We are researching it.
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Posted by: torridjoe | Mar 25, 2009 10:41:59 AM
We have a governor? Wow, I'd forgotten. That's how visible he's been lately. He'll need to come out of hibernation before he can fulfill Steve's mandate.