Medford Republican State Rep. Sal Esquivel Claims there are Millions

Paulie Brading

...collectively in reserve and carry over funds of individual departments of the state government that have not been tapped. His buddy Russ Walker of Keizer, vice-president of the Oregon Republicans said action by the state Legislature could free up some of those funds rather than raising taxes by passing Measure 66 and 67.

With a little help from my friends I took a look at Esquivel and Walker's claims. Most of the funds they both claim they can capture in lieu of taxes are currently obligated to balance the 2009-2011 budget. They are funds that cannot be touched, that do not really exist or that backfill General Fund programs creating a political shell game. The changes they seek will require a simple majority for approval.

Here is a list of some of the funds Esquivel and Walker support being moved to the General Fund. In most cases the funds are continously appropriated agency funds.

Sources: Documents supplied by Sen. Brian Boquist and Sen. Larry George from the House/Senate Republican Office. Legislative Counsel, and Legislative Fiscal Office.

Most of the monies that the Republican minority caucus would target are funds that cannot be touched.

I am still waiting for Republicans to come up with a way to address the state's loss of revenue which has affected services such as public education and public safety. Raiding obligated funds isn't anywhere close to a solution. Passing Measure 66 and 67 is a solution that finally takes into account tax fairness.

  • Miles (unverified)
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    This just shows that even Republican legislators don't understand the "color of money" issues when it comes to public funds. Or maybe they understand and just prefer to lie to the public in order to further their political arguments.

    Conservative rhetoric aside, there are significant legal restrictions on many types of public funding. And even if the funds can legally be freed up for general fund purposes, you have to ask whether it's sound fiscal policy to do so. Take OMIP, the first on the list. I'm no expert on this program, but my understanding is that every employer in the state has a surcharge on their health plans that goes into the OMIP program. So if OMIP has "excess reserves", can those employer funds legally be reappropriated to a non-OMIP purpose? Even if the legislature can legally do that, is it fair to take money that is paid to the state for one specific purpose and spend it on something else? Isn't that a violation of the public trust?

    Public funds can sometimes be loaned from one fund to another, so maybe the Republicans are saying we should loan the excess funds to the GF, and pay them back in the future. I almost hope they are, because that would be the most fiscally irresponsible thing you can do. It's like Enron accounting, taking from Peter to pay Paul and then hoping that everything turns around in time to pay back Peter before he needs the cash. This is really just punting the shortfall down the road instead of making the hard decisions.

    There is no magic bullet to this crisis. You either cut programs or you raise taxes or you come up with some artful combination of the two -- which is exactly what the last legislature did.

  • Scott in Damascus (unverified)
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    This manufactured crisis has been brought to you by the Oregon Republican Party.

    Fresh out of ideas since 1987.

  • Steve (unverified)
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    "don't understand the "color of money""

    Sure, I do - It's green. When I pay it I don't get to say lets spend this on schools and not Iraq or streetcars. A lot of these color of money things are manufactured to ensure pet projects go ahead.

    As far as a govt dept giving back money - HAHAHA!

  • Rob (unverified)
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    The color of money, which I first heard termed from mayor Katz (of whom I was not a supporter), is little understood, but essential for us all working together in a representative democracy. The misunderstanding spans parties. Grasp of the concept is withing reach of all. Unfortunate that elected representatives do not understand it. Doubly so that every representative is not explaining it to Oregon citizens.

  • Ricky (unverified)
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    @ Paulie

    I enjoy your posts because they aren't designed to flame or instigate reactions like Carla spends all her effort doing.

    I wonder if you listened to Barack Obama's Jobs Bill speech today where he proposed cutting taxes for businesses in order to create jobs? Seems to me Measure 66 & 67 are going directly against what Obama's economic advisors are proposing as a way to create jobs and fix the shortfall in our state revenue, trickling down from federal tax cuts to create jobs.

    Our state economist even blamed the short fall in the general fund that you post about on the unemployment rate and lack of consumer spending on items that get taxed and go to the general fund.

    So why is Obama sending signals that he wants to cut taxes on business while Bluesters are attempting to tax them? Do you see the faulty logic with these measures? Why are we working AGAINST Obama through these measures?

  • mp97303 (unverified)
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    So why is Obama sending signals that he wants to cut taxes on business while Bluesters are attempting to tax them?

    Next thing you know, BO'ers will be calling the President a DINO.

  • FactBot 4000 (unverified)
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    This is the same tired story that the R's have been pushing since the legislative session.

    As I've said before, this is the same as paying with a check at the supermarket, then looking at your bank account when you get home and spending that as a "reserve." Just because your check hasn't been cashed yet doesn't mean that you still have that money to spend.

    It's a wonder that these guys can manage their personal finances.

  • AdmiralNaismith (unverified)
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    It's a wonder that these guys can manage their personal finances.

    Hint: they can't. Hence the current financial crisis.

  • LT (unverified)
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    At least they are being specific. And anyone who has had experience with inappropriate use of funds and the consequences thereof (SAIF funds court decision in the 1980s which required paying the money back with interest, WESD head recently fired and one of the issues was co-mingling of funds) can point out the pitfalls.

    Interesting thing is with Hanna's potential Gov. campaign: will he endorse these ideas or listen to the more rational folks who warn about the pitfalls?

  • Observer (unverified)
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    from behind the Bend Bulletin's firewall:

    Possibility of untapped millions gets a new look Bend Sen. Chris Telfer has championed the idea; now, budget analysts are checking the state’s finances to see what might be there to help fix the budget

    By Nick Budnick / The Bulletin Published: December 05. 2009 4:00AM PST

    SALEM — For months now, state Sen. Chris Telfer, R-Bend, has been saying the state has untold millions — hundreds of millions, in fact — that are stashed in bank accounts, ready to bail out the state’s schools, social services and prisons if two tax measures on the Jan. 26 ballot fail.

    And in two months time, Oregonians could learn whether she’s right.

    On Feb. 1, the Legislature is planning to reconvene, primarily to revisit the state’s two-year budget. Of primary concern will be whether two tax increases survived the scrutiny of voters. Measure 66 would increase the tax rate on an individual’s income above $125,000, or on joint filers’ income above $250,000. Measure 67, meanwhile, would increase corporate taxes.

    If the measures are voted down, it will cut a hole in the state’s two-year budget of about $730 million. That comes on top of a roughly $200 million gap that has opened up since the Legislature shut down in June, thanks mainly to declining revenues.

    Democratic lawmakers have seized upon a list of possible budget moves — including closure of prisons and deep cuts to schools and social services — as evidence that voters essentially have only two choices: vote yes or watch Oregon go down the tubes. As House Majority Leader Rep. Mary Nolan, D-Portland, put it, “The state budget is balanced on a razor’s edge. ... If we change course now, the results would be devastating.”

    However, Telfer and two other senators have been arguing that there is a third place to go to balance the state’s budget: money that state agencies receive other than personal and corporate income tax, dubbed “other funds.”

    The state reports having more than $2.5 billion of these non-tax monies, generated from fees and other sources — and Telfer and her allies want the state to tap it.

    When she joined with other Republicans to broach the idea in May, she was widely ridiculed by Democrats who said her ideas were a red herring thrown up to defeat tax increases. And officials in several agencies said the money in their accounts isn’t available. For instance, money in the state’s roads fund can only be used on roads, and many fees collected by the state have other strings attached by the laws authorizing them.

    In a press conference after the Legislature shut down, Gov. Ted Kulongoski called Telfer’s focus on these funds “a great idea” and vowed to look at it closely — though he predicted cuts would still be necessary if the tax measures fail.

    Today, with the tax votes just weeks away, what had been an abstract debate is now becoming more real. Budget analysts for the Legislature and for the executive branch are burrowing into the state’s finances, trying to figure out how much of that stashed-away money is available to balance the budget.

    George Naughton, director of the Budget and Management Division of the Department of Administrative Services, is essentially Kulongoski’s top budget guru. He said his office is working with the Legislature’s budget analysts to help prepare a backup plan of options for lawmakers when they return in February. And the funds Telfer has targeted could be part of that plan, as well as cuts, reserve funds, and elimination of vacant positions in the bureaucracy.

    Kulongoski has continued to track the “other funds” issue behind the scenes, Naughton added.

    “The conversations we’ve had with him, absolutely this has been one of the conversation points,” Naughton said. He added that while the state wants to avoid unnecessary cuts, it also wants to preserve agencies’ operating reserves to deal with unforeseen problems.

    Similarly, Ken Rocco heads lawmakers’ budgetary brain trust, the Legislative Fiscal Office. He said his budget analysts are doing the same thing. He pointed out that the idea is not new — in fact, lawmakers “swept” more than $110 million from agency accounts to balance budgets earlier this year. And he tends to doubt much more money is out there to be swept.

    Rep. Peter Buckley, D-Ashland, as co-chairman of the Joint Legislative Ways and Means Committee, is one of the lead budget-writers for the Legislature. He noted that when Democratic lawmakers conducted the first of two fund sweeps in March, they were attacked by Republicans. In a floor speech, House Minority Leader Bruce Hanna, R-Roseburg, called it a “bait and switch” which sent a message that it “is OK to fool taxpayers into believing that they are supporting specific services with their contributions and fees when in fact the money is actually going to pay for something entirely different.”

    Buckley called the contradiction ironic, saying, “Obviously, you can’t have it both ways: You can’t have it that it’s a bait and switch on the people of Oregon and (also that) it’s a reserve fund that’s available for the taking.”

    Telfer, who also voted against that sweep, said Republicans were mainly concerned about the use of license plate fees that Oregonians’ thought were going to support the Oregon Cultural Trust.

    Overall, she said the objections to using the other funds are largely “bogus.”

    If a law states that a particular fee is intended for one purpose, then “the Legislature can change that anytime it wants,” she said.

    For more information, go to the “Other Funds Account Balances” page at www.leg.state.or.us/ comm/lfo.

    Nick Budnick can be reached at 503-566-2839 or at [email protected]

  • LT (unverified)
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    "SALEM — For months now, state Sen. Chris Telfer, R-Bend, has been saying the state has untold millions — hundreds of millions, in fact — that are stashed in bank accounts, ready to bail out the state’s schools, social services and prisons if two tax measures on the Jan. 26 ballot fail."

    Telfer was a member of the committee which wrote the ballot titles for 66 & 67.

    Buckley is right--they can't have it both ways. "Buckley called the contradiction ironic, saying, “Obviously, you can’t have it both ways: You can’t have it that it’s a bait and switch on the people of Oregon and (also that) it’s a reserve fund that’s available for the taking.”

  • LT (unverified)
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    Face it! Republicans have lost their way the way the Democrats did after the 1984 Reagan landslide (Mondale was the ideal candidate! Why did he lose?) and it will take internal debate and soul searching before they regain their previous power.

    Why was it that when Hatfield, McCall, Clay Myers, Vic Atiyeh were younger and active there were so many more elected Republicans (and few independents) than now when the true believers yell RINO at everyone who doesn't accept their view of the revealed truth?

    Telfer does not have the fiscal common sense of her predecessor.

    What is going to be interesting is to see what happens with Dudley and Hanna. Even if one of them were to win the primary, standing for this kind of nonsense is unlikely to win over those swing voters/ independents who are tired of political games and by golly want their questions answered, not just more preaching by ideologues.

    Correct me if I am wrong, but as I recall not every Republican legislator believes in Back to Basics or any of the other "base" ideas of the Republican leadership.

    http://www.oregonlive.com/news/oregonian/steve_duin/index.ssf/2009/12/remembering_republicans_winnin.html

    is an excellent column about Denny Miles knowing what a Republican victory looks like because he worked for Atiyeh.

    Vic was more pragmatic than being an ideologue--whether or not one agreed with him. He actually had lots of press conferences, explained his views, listened to others. Besides all the things he did publicly, he did unsung things for veterans and others. Someone coming from a family business and an immigrant background saw life differently than the right wing religious fanatics (one of which said Republican activists should be Christians and Atiyeh replied that was an insult to all the Jews supporting his campaign).

    That 1982 campaign was nasty, but there is a forgotten element. It was well known in the fall of 1982 that the losing candidate lost volunteers to other campaigns---in great part because that candidate spent less time talking about what he was FOR than about what was wrong with the incumbent. "OK suppose you win. What the incumbent did wrong does not tell us what you would do!". Not only in 1982 but in 1984, the refrain "if you can't talk about yourself, only your opponent, other campaigns are a better use of my spare time" was common.

    Nothing passes the legislature without at least 31 votes in the House and 16 in the Senate. 31+16 is the rule no matter who is in the majority. Can Sal count on all the votes of Republican legislators, or are there some who think for themselves?

    There is a Republican Ways and Means subcommitte co-chair who has previously gone on record saying some cuts which hit needy Oregonians would never leave a subcommittee she chaired; who brought LFO and LRO experts to a town hall meeting and told the story of the SAIF funds and how the state was required by court decision to pay those funds back with interest because the money was sent to SAIF to pay for insurance, not to balance the state budget.

    If Sal can't win that state senator's vote, it doesn't matter what Sen. Telfer says.

    Does Sal understand how much he sounds like Dan Doyle and the "mystery money" crowd of several years ago? Magical funds to balance the budget without pain weren't there then and I doubt they are there now.

  • ameliahumphrey (unverified)
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    You can get full medical coverage at the lowest price from http://bit.ly/7XH2ka

  • JJ Ferguson (unverified)
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    More evidence that Americans are faced with a choice between tax and spend and just spend what you don't have.

    In the last decade, major corps haven't grown by growing, but by constant reorganizations, leveraged buy-outs and other "shell games". The business of America is business and the way that business gets done in major corps, more often than not, is fraud. This is more heritage of the Reagan Revolution. When people thought that making government more like business was a solution, anyone with a clue had major reservations. Nearly all forget, that, before Baby Bush was the "wartime President", he was largely accurate in characterizing himself as "the CEO President".

    So, I guess the good Mr. Esquivel is admitting that he could have added to the debate that led to the lege punting this to the voters, and didn't.

    I've a modest proposal, for the future. When the lege debates something, comes to no conclusion, and refers it to a referendum, the session must be extended for at least the number of days spent in the debate, and legislators' pay be docked for time wasted in the debate.

    This whole stupid affair is more evidence that the TEA people and such are empowered by Democratic policies. Are Party leaders at the State level so hapless that they couldn't see the monumental waste of time, energy and advertising dollars (double waste) this would lead to, or do they really think TEA rhetoric could unseat them from office if they had passed M66/67 on their own? What about all those "unassailable districts"? Is that overblown or is something else going on? I think it's clear. You've elected a lot of "Dems" that, on a personal level, are TEA people. They put forward the Dem position- "oh, well, guess I gotta do it...wait, we can refer it!- but, personally, wouldn't mind it failing, grubbing after every dime of personal "worth" they can.

    As long as you continue to accept American business ethics as valid, elect those people to the lege, and refuse to consider that being an elected rep should not be a career, all you will get it the best hucksters and avaricious self-servers the country has to offer. When I have been in the presence of these people, the diff between Dem and progressive is stark. The Vegas "political bloggers" convention a few years back was a great example. Progressives would have a slightly constipated look on their face, as if to say, "yuck; do I really have to deal with this to make a difference"? The average Dem's expression could only be called adoring hero worship. I have never been so disgusted as I was watching this blog's editors drooling and scraping for the feckless Harry Reid, discussing climate change, in a city that outranks all for environmental irresponsibility.

    Posted by: ameliahumphrey | Dec 9, 2009 2:43:04 AM

    You can get full medical coverage at the lowest price from http://bit.ly/7XH2ka So much for the link spammers "only showing up on older posts". Until further notice, nothing is off-topic, until you can find the time in your busy day to at least do the level of blog management that most people do for their 5 hit/month freebie blog. This goes to the "do they manage their own money". The constant refrain is, "you don't understand, it's not that easy". Yet, we manage with fewer resources. That horse hockey will never stop until people learn to simply respond, "No, you can; go do your job".

    You may see more spam because I'm no longer obsessively deleting spam on an hourly basis - and do it now every few days. Got more important things to do in life (and most of the spam appears on months-old posts.)

    No, you can; go do your job. If your paid work is more important, hand this off to someone that can manage it. What about the listed editors that haven't posted in weeks? You've found time to include at least three pseudonyms in the spam filter; how is it that adding "film izle" is a major drain on your time? More important, how is it that those you label as trolls trump link spammers? Another example of pandering to blatant materialism...but ideas can be dangerous! Maybe it's very simple. Link spammers=more hits. non-PC speech=fewer hits. More hits=more paid work. This blog is fast becoming to anarchist hackers what the World Trade Center represented to terrorists. "We can handle them". Where have I heard that before?

  • Jason (unverified)
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    I know the best way to raise revenue for the state's budget: raise taxes and put more control in government hands.

    That always works.

  • Ricky (unverified)
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    I still don't understand how we can support passage of Measure 66 & 67 given Obama's Jobs Bill speech where he calls for tax cuts and incentives to business in order to create jobs and reduce shortfall revenue.

    It's as if Obama has given opponents to the passage of the measures an endorsement. I wouldn't be surprised to see Obama's proposed bill being used in advertisements urging us to vote NO on 66 & 67.

    Time to wake up.

  • LT (unverified)
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    "So, I guess the good Mr. Esquivel is admitting that he could have added to the debate that led to the lege punting this to the voters, and didn't."

    The legislature DID NOT "punt this to the voters".

    The legislature passed a balanced budget which included taxes (which infuriated the Freedomworks crowd) written in a way other than the business lobbyists wanted (which led a lobbyist from AOI on the front page of the Sept. 27 Sunday Oregonian to say this was going to be all out war and was going to get ugly.

    Any lobbyist knows that if the measures don't pass, the legislature will be required to rebalance the budget---and regardless of what Sal thinks, he will not be able to get his ideas passed in the Feb. session unless he convinces at least 30 other state reps. to agree with him. Sen. Telfer won't be able to get such an idea passed in the Senate without the votes of 15 other Senators. Given that they are both minor members (not leadership) of the minority party, that could prove tricky.

    Oh, and Ricky, a presidential speech does not affect how a state balances the state budget.

  • Miles (unverified)
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    I still don't understand how we can support passage of Measure 66 & 67 given Obama's Jobs Bill speech where he calls for tax cuts and incentives to business in order to create jobs and reduce shortfall revenue.

    This is a good question, and I think I have an answer. Obama is generally correct that tax increases on businesses during a recession tend to limit job growth and the recovery. But what Oregon is debating in M67 is a much different kind of tax change. Raising the corporate minimum from $10 to $150 is the kind of change that will generate revenue, but will not have a substantial impact on most businesses. Tax policy is complicated, and it's impossible to use one blanket rule-of-thumb in terms of what will or will not happen. Raising business taxes in a recession is often -- but not always -- bad. I believe this is a case where the positive impacts are larger than the negative ones, and I think Obama's economic advisors would agree.

    The individual income tax increase, of course, is exactly what Obama's been preaching since he started running. Taxing the wealthy at incomes over $250k, as the Oregon legislature proposes, simply adds some progressivity to the tax structure. These families BY DEFINITION are still employed and doing well, and they are being asked to take on a larger share of the burden of ensuring a safe, peaceful, healthy society.

    <h2>The Bend Bulletin article was great. I think it's worth avoiding the extremist trap when talking about the state's fiscal situation. It is possible that there is still a little bit of excess reserve funding that could be used to help balance the budget, and it's appropriate to look at that issue. But anyone who thinks we can take $720 million from "excess reserves" either doesn't understand the state's budget or is being fiscally reckless.</h2>

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