Home Opinion Editorials Find another way to make up state shortfall

Find another way to make up state shortfall

Written by Observer editorial reports January 11, 2010 03:32 pm

Measures 66 and 67 that appear on the Jan. 26 ballot have resulted in a divided state. We have the Legislature to thank for that, since apparently it had business groups saying they could support a temporary tax on high-income individuals and an increase in corporate taxes. But the Legislature went ahead with a permanent tax increase anyway. The opposition rose up, passed around signature petitions and forced a veto vote onto the ballot.

Caught in the middle are the kids in public schools, college students, public safety services and recipients of public social services. If Measures 66 and 67 go down on Jan. 26, the state will be lacking about $733 million a year that was included in state budgets for the 2009-11
biennium. Opponents of the measures, who say the time just isn’t right for tax increases in light of the recession, claim the Legislature has alternatives and can find a better way. They point to $4.4 billion in reserves held by state agencies, only 25 percent of which is dedicated and untouchable. They point to the possibility of privatizing liquor sales in Oregon, which could save the state the cost of operating the OLCC. Some say that going back and making the tax increases temporary could even be a possibility if other choices don’t pan out.

What is clear to us is the fact that — at least looking at our situation in Union County — we can’t take any more big hits right now. Not in the private sector and not in the public sector. So Measures 66 and 67 really don’t provide any solution whatsoever. Excuse our French, but we are damned if we do and damned if we don’t. That’s not a good situation.

If the measures fail and no other solution is found, Eastern Oregon University stands to lose about $1.6 million.
La Grande schools will lose about $1.2 million. The other schools in Union County will lose another million dollars. That’s going to result in more job cuts. Our economy will take another big hit. But already class sizes are up. Most of the districts are bare bones. And, contrary to what the proponents of the measures say, most government employees — certainly in our area, anyway — have taken pay freezes and are giving up several furlough days a year.

The private sector has been hit in the recession to the extent that, in Union County, hundreds of jobs have been lost. Employees have taken pay freezes, pay cuts and are taking furlough days beyond what has occurred in the public sector. Raising taxes and fees for corporations — actually, for anybody right now — doesn’t make sense. It would forestall the kind of rebound we need in 2010.

Oregon is in a terrible predicament. Some segment of our society loses however the measures go on Jan. 26.

Voters should reject the two measures and demand that the Legislature, in its February special session, find a solution that is fair for all concerned. Our public services can’t take additional hits right now. Class sizes have grown too large, books are getting old. Public services are spread too thin. And Eastern Oregon University, which is seeing tremendous growth in enrollment this year, would be dealt a serious blow.

The Legislature could tap whatever reserves are available. It could consider a temporary tax increase as a last resort. But it must come up with something. And then for the longer term the Legislature will need to bite the bullet and consider reforming the state’s tax kicker law, so that money received in excess of projections goes into a rainy day fund to help bridge the gap when recessions hit. Oregon’s tax system is in need of some serious repair.