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Chuck - Much appreciation for that ITEP report - eye-opening and excellent graphical representation of tax structures.

While Mr. Roberts makes some good points, I would argue that this "short term fix" will rob us of the long term solution we need. Maybe this is part of the reason he couldn't get full support even from Republicans. I understand the Democrats in Congress voting for a terrible piece of legislation, the Health Care Bill, because they believe this is the one window they will have. By passing a health care bill, they believe they will set in motion the actions that will eventually end up reforming a medical system that they don't like. I think they are wrong, but that is a different argument. They are taking political advantage of having enough votes. I think in the short term they may get what they want. Long term I think they are creating a disaster that will come back to haunt them. Somewhat similarly, I think the "No on 66/67" faction is taking political advantage from the Recession to kill tax increases. The short term result will likely be very painful but it could possibly change the legislature's propensity to spend beyond their means. Maybe that is wishful thinking on my part. I have seen parents of teenagers trying to curb their children's spending with every manner of bribe, incentive, cajoling, etc. Only when they take the credit cards away do they get results. I see 66/67 as (at least temporarily) taking the credit cards away from the kids in Salem. Thanks for the ITEP Report. Interesting.

"short term fix" Um, I believe the tax increase will continue beyond the "short term". If your argument is that we need a sustainable tax base, I agree. A modest increase for those well compensated who have benefitted from prior rollbacks and antiquated (low) contribution levels seems fair. The need for more revenue will be felt by all income levels in the increased cost of govt. services. Everyday things like licenses, registering titles,business names,filing law suits, parking in the woods, permits, applications, renewing all the foregoing. To the extent we consume certain taboo products we will all be pinched a bit more significantly. What I can't fathom is how we expect to avoid inflation?

I wish the Oregon GOP would have given us Roberts instead of Mannix and Saxton as a choice for Governor. Once upon a time there were always two legitimate candidates for that office.

Jack for Governor. We need a new political party, since the best possible candidate can't feasibly run in either of the current ones.

Carla,

You said, "What that is..is untrue. The legislature can't spend beyond their means. It's against the law. Oregon has a balanced budget requirement."

Does that mean you believe our legislature can't spend beyond its means because of the law? That sounds like saying drivers can't exceed 55 because there is a sign posted.

Our legislators and those of most states can commit to spending for which they do not have the funds, and they do.

Your saying "The legislature can't spend beyond their means", is just plain silly. If they make commitments to long term programs, they need income to cover those programs. If that income is dependent upon passing bills and defeating referral ballot measures, after committing to the programs, they are spending beyond their means. It is like buying a new car to be paid for with the raise you hope to get.

@ Steve, Does that mean they can refuse to fund the PERS commitments?

@ Dan
You said, "The legislature did fund the programs. The only way they will not be funded is if 66/67 are defeated..."
Did they not pass bills that would tax back to 1-1-09 to cover the cost of losses in the programs carrying over from the previous budget?

"Does that mean they can refuse to fund the PERS commitments?"

PERS commitments aren't paid out of the General Fund, but from OPERF.

As for GF commitments, of course the state can refuse to continue to fund ongoing commitments. But it's stupid and if we did, then no one in the finance community would ever want to play with us again and we'd be a backwater state with no capital infrastructure.

If these measures pass, will businesses and "the rich" finally be paying their "fair share?" If not, can you please state specifically what amount as a percentage of either sales(income) or taxable income that might be.

As a business owner who would like to try and make some plans for the future, any info would be greatly appreciated.

Thank you.

I understand jack's issues and agree with most of them. Last go round I voted in favor of M30 and wold have gladly voted again for temporary tax increases across the board. I share the questions Jack does and wonder if our elected officials in Salem will EVER get the political courage to truly tackle reforming the state tax system.

As yet I am undecided. I understand what my 'No" vote would mean. I think I know that my 'Yes' vote would give temporary respite and allow business as usual once the rebound occurs. That bothers me because our state can not continue with the current tax/revenue system. It is unsustainable.

Thanks Jack! I may not be a Republican, but that party's flirtation with the whole Tea Party movement has been disturbing. We are all improved by having better, more responsible opponents.

"wonder if our elected officials in Salem will EVER get the political courage to truly tackle reforming the state tax system."

If there are Democratic legislators who want to put off discussing kicker reform (after some of them said "wait until Feb." during the 2009 session), they should say so publicly and not just hide behind their caucus.

There might be constituents who would like to mount a primary challenge---someone not afraid to discuss kicker reform.

And Steve is right: the current legislature can no more obligate future legislators to do anything---any more than Speaker Minnis could have obligated Speakers Merkley or Hunt to a particular action.

Even though I often disagree with him, I have long considered Jack Roberts among the most thoughtful regular commentators on this website.

I nominate Jack Roberts to be a contributor to Blue Oregon. Although I doubt he would accept, Blue Oregon would benefit from a worthy devil's advocate.

Does that mean you believe our legislature can't spend beyond its means because of the law?

Tom, Once the economy started tanking, agencies made cuts, layed off state workers and backed out of any obligations they could to end in the black. Yes, the legislature can't spend beyond its means...

PS Tom, using an effective date of 1/1/09 does not mean the changes were used to cover 07-09 obligations. These changes did not go into effect until the Governor signed them and the 07-09 budget was rolled up by then. I believe it was done that way because it is more efficient to use a calendar year for tax purposes. Most of us follow a calendar year and most tax law changes are effective the beginning of the year. The ones that aren't are onerous to administer.

@ Ms Chan,

I appreciate your insights and I could be all wrong in my feeling that the legislators used 1-1-09 to cover losses that they would carry forward to the 2010-2011 budget. I still think that collecting taxes from the year past, or even part of it, indicates covering overspending from the previous budget. Often that is covered by cutting maintenance and deferring it to the next cycle. I've seen that happen in school district budgets and in the private sector. Appreciate this discussion. I am hearing some things that never seem to come out in the 66/67 conversation.

Mr Roberts - So how do we hold the legislatures feet to the fire? Every time we don't have enough money the answer is to raise taxes and NEVER cutting anything besides schools.

THe refrain two years from now will be the same as it has been bin-annually for the past 30 years:

If we can't raise taxes, we'll close the schools.

We;re going to be Cali without the good weather or jobs pretty soon.

"the legislators used 1-1-09 to cover losses that they would carry forward to the 2010-2011 budget"

Tom, you mean they anticipated the taxes would not pass?

Why such a deep distrust of legislators?

Here's an idea:

Go to http://landru.leg.state.or.us/index.html

which is the legislative website.

Click on Legislative Audio Video tab and find the Ways and Means committee audio.

Listen to either subcommittee or full committee hearings---all right there out in the open. This was maybe the most open legislative session in 2 decades.

I respect all the members of the Ways and Means subcommittees and full committee whether or not I agree with them. This was a long hard slog for them, whether they were freshmen or experienced measures. One freshman member I know said that the people complaining about the process in June sure hadn't been talking to Ways and Means members back when it was cold and they were doing the foundation work on the budget.

If you are willing to actually listen to hearings, let us know what you think.

And if there are one or more down revenue forecasts from one budget to another, in what way does that justify your remark about "overspending from the previous budget"?

You do know there were $2 billion in cuts in 2009, don't you?

W & M members worked very hard in 2009. At the very least, people who are going to complain about their work ought to listen to at least some of their committee hearings.

So how do we hold the legislatures feet to the fire?

I would suggest voting.

Every time we don't have enough money the answer is to raise taxes and NEVER cutting anything besides schools.

Thank Kevin Mannix, his unfunded mandate, and the rest of the dittoheads who think being tough on crime should trump everything else regardless of cost. Look no further than the kids at NWRepublic for a good example.

Thank you Sportland.

Not only voting, but actually campaigning for the candidate of your choice.

Of course, that requires real work and actually interacting with other people.

Maybe blogging is all some people want to do.

The only "permanent" tax increase would be one that is put into the Constitution, and with Oregon having such an active initiative system for amending the Constitution, even that wouldn't really be permanent, just harder to change.

Thus, the "we'd be for it except they went and made it permanent" is just more eyewash. Every time the Legislature meets they can change the tax rates -- thus, any tax changes made are only as "permanent" as the next Legislature wants them to be. What drives the anti-66/67 folks crazy is that the Dems didn't cooperate and lay their heads on the chopping block for the change by setting up the exact same fight a few years down the road. Nice to see, a refreshing change.

Did y'all ever expect to have the Oregonian, Tribune, Statesman Journal and Bulletin go against you. I know, I know, they are too stupid to know what is good for them. yadda yadda yadda

LT

Will try to find time to listen to some of it over the weekend. Thanks for the web link.

Jack Roberts commented: And when was the last time we raised taxes to cover a budget shortfall? That would be 1982--almost 28 years ago.

eh... to borrow a phrase from Kari here: 'a little specificity would go a long way' - I think you mean 'and when was the last time we raised income taxes... Besides property taxes, there are myriad other niggling state/local taxes and fees that have been instituted/increased during that time - a few million here, a few hundred million there and pretty soon we're talking real money, you know... And it's not like the Oregon Legislature hasn't TRIED to increase income taxes during the last 28 years.

The Oregon GF budget was cut in the 2001-2003 budget cycle (mostly offset by a significant increase in lottery $) and the total GF/lottery funds budget held steady 1999-2006. The Legislature may have had to cut the amount they WANTED to spend in the early 1990s, but I can't find any evidence the GF budget was cut - increasing from ~$4.5B in 1989-91 to nearly $7.0B 1993-95. One budget cycle that cut spending a small amount plus 2 that held it steady do not make up for 10 budget cycles that steadily increased spending - 27.5% just since 2005 alone!

The overall Oregon GF/lottery funds budget has sextupled from ~$3.0B to ~$18.0B in the last 30 years while the population has increased by ~45% - so it defies any sort of real-world (i.e., non-politician) logic to try to imply that somehow Oregon state government lives on a shoestring and hasn't increased spending a dime in the last 30 years.

Jack Roberts' insight: "I respect everyone's right to support different responses to this problem but it is not helpful to misrepresent the problem or to be in continued denial of the facts."

I hope he takes that message, properly generalized to apply to all political strategizing, to the Republican party. It is the basic problem resulting from hyperpartisanship from which no party today is exempt, but seems to have become the modus operandi of the Republican leaders of today. It is a grave threat to the welfare of our country.

Kudos for saying it aloud, Jack.

I think that Jack's editorial was a fair and reasonable argument. At least he didn't insult us with "fairness" or "class warfare" talking points like the ads on TV.

I'll still be voting no because I don't see any reason to fund increased spending and I don't like the targeting of the measures. If the increased spending is supposed to be for everyone's benefit then the tax should be broad based. It is unwise to shift the burden to just a few people to pay for wants of everyone. I'm surprised that Jack didn't find those targeted tax increases more disturbing.

So Andy does not see the need for increased spending in the face of falling revenues due to the recession. Your ignorance is showing!

He is also ignorant of the policy the country has been indulging for a good while of shifting the tax burden consistently away from the wealthy and onto the middle class. He does not care if the burden of taxation falls hard on low-income people when the needs (not 'wants') of everyone call for more revenue when budget cuts have impacted those dependent on government services harshly. Your hauteur is showing!

Jack Roberts commented: ...state and local taxes, computed either per capita or as a percentage of gross state income, was above the national average in the 1980s and is now below the national average.

Another fact for consideration: Oregon per capita personal income is now ~$4000 less than the national average - a gap 4x what it was 10 years ago...

With due respect to you and Carla, many if not most of us great unwashed out here in the private sector have foregone raises and/or taken pay cuts (including me for 2 years now) - with some losing their jobs all together. The concept of 'cost-of-living' and 'step' increases is foreign to many of us. The stock market crash has impacted ALL of us - not just PERS for state employees. So why do some still seem to think state employees (with their relatively generous benefits including 100% publicly-funded 'cadillac' or near-'cadillac'-equivalent health care benefit plans) must be immunized from the travails of the rest of us? 10-14 furlough days over 2 years is ~1 day per month or less than a 1% pay cut annually. I dare say most of the aforementioned great unwashed in the private sector who have taken pay cuts or lost their jobs would have been happy to get away with just a 1% pay cut.

I'm not denying there will need to be cuts if M66/67 fail - some that will be painful. But frankly, I'm now of the belief that only a real crisis and real pain will goad/steel the Legislature to enact and voting public to accept the type of measures (including possibly the elimination of some programs we just can't afford anymore) and broad structural tax reform necessary (those magic words forever mouthed by many Oregon state legislators past and present, far and wide...) As I've commented previously and someone essentially repeated above, passage of M66/67 would just paper over the problem for now, people will forget about the issue and go back to business as usual, and we'll be hearing similar if not the same wailing about lack of revenue in 2 or 4 years accompanied by the usual pissing and moaning about a targeted minority of taxpayers not paying their 'fair share' - the latter of which the definition continues to be maddeningly elusive.

Thank you, Jack.

" nor can I blame the Democratic majority for looking for an alternative to what has been rejected before. And the truth is, the business community were unable to deliver the votes necessary to pass a bill making these proposed tax increases temporary rather than (in part, at least) permanent."

If voters really wanted "don't ask Republicans for alternatives because blaming Democrats will solve all problems", the Republicans would still be in majority.

Until Republicans realize that folks in the great middle want common sense like we see from Jack rather than attacking everyone who doesn't support the GOP party line, Democrats will deserve to continue winning elections.

Alcatross posts one vote in favor of another Great Depression! That's a new low...

We're already in another Great Depression, government is still trying greatly to ignore reality/paper over the problems.

Nice snark JS, but perhaps you didn't know anyone traumatized by growing up in the 1930's. What we have going now is a blip in comparison, although we have skated close to the edge.

This would be credible if he addressed taxing gross receipts. That is a sea change. This is informative, though, why he would throw in with the feigned support that seems so popular.

I have a theory. Most people pay their Federal, go to their Oregon return, write off the Federal, which is usually more, and effectively pay little or none to Oregon. By taxing gross receipts the process will be reversed. Ricky's point that I can't remember anyone bothering to address though he's raised it constantly, about "doesn't this fly in the face of how Obama is trying to stabilize the economy" takes on new vigor, if you think I'm right.

So, this is good news, if I'm right. The beginning of the end of the Bush admin. came when Carl Rove tried to give the Rs a permanent majority. A lot of seemingly invincible political machines come unhinged when they get that heady sense of ultimate power, and decide to finish the game once and for all. How about Nixon after his big win? Reagan never had any pressure for his antics until he allowed 41 to set up a shadow government in the basement. 43 couldn't resist that favorite fascist plan to rid America of democracy by creating a financial panic. So, if the Oregon lege think they're going to permanently eat the fed's lunch, that's probably the last mistake they'll make. You mention the key. He's the only one that has been on the inside. It belies the fact that the party moniker is purely for the voters' consumption. It's like religion. Methodist, Jewish, Catholic Ph.D level theologians agree as much among themselves as between themselves, but they don't let the faithful know that. They would be shocked, so they play the "we're a separate religion" card.

The theory certainly explains one thing. It's more than a little odd how this blog has taken on the guise of the play-within-a-play in Hamlet, with Novick playing the King and Carla playing the queen. I'm left like Gertrude in the opinion that "methinks the lady doth protest too much".

My favorite sentence in Roberts's piece is this one:

"I've never understood the economic reasoning of those who wring their hands when a private business reduces its employment but clap their hands when government lays people off."

Why do conservative Republicans insist on seeing the economy as a zero-sum game in which every dollar that goes to the public sector vanishes from the private sector, never to be seen again? Why can't they understand that the public sector recycles money back into the private sector to pay employees (who in turn buy things in the private sector) as well as to buy goods and services directly from the private sector?

Or is it that they just don't WANT to understand?

"many if not most of us great unwashed out here in the private sector have foregone raises and/or taken pay cuts (including me for 2 years now) - with some losing their jobs all together."

How does it make you better off to make other workers (state employees) worse off?

If you're envious of the pay and benefits state employees enjoy, form a union and win better pay and benefits for yourself instead of carping about what somebody else gets.

Well said! Don't whine - organize...

"they cut over $2 billion from the budget "

Something also lost in the discussion" 07-09 Allfunds = $48B 09-11 Allfunds = $53.76B

Saying you only spent $5.76B more instead of $7.76B more is a cut I guess, but more like just being less greedy.

Dartagnan - If you're envious of the pay and benefits state employees enjoy, form a union and win better pay and benefits for yourself instead of carping about what somebody else gets.

Kurt - Well, there are several critical factors that point to a private entity union never being able to bargain what public employees have:

1. PECBA mandates binding arbitration when public entities and their unions are unable to agree at contract time. The basis of PECBA arbitration is no unbargained moves backward - EVER.

2. Retirement bargained contracts can not be undone unilaterally, even if they threaten to bancrupt the state or the underlying public entities. they only substantive changes that may be made are those going forward - the courts have re-iterated this.

3. Many private unions have the right to strike, most public employee unions do not - hence the arbitration clause.

4. The public sector has held onto COLA minimum guarantees of 2% and step increases guaranteed while the private sector moved away from this years ago.

5. The Caddilac health insurance tax will hammer public entity bargained health coverage and preclude that from private entity union contracts as well.

<h2>I apologize for not spelling "Cadillac" correctly. Obviously I've never been able to afford one :-)</h2>