FOR STATE, IT'S TIME TO TOUGH IT OUT
The Oregon Legislature is a great example of a group that just can't get it right and is always trying tax shortcuts to get back on track.
Over the past two decades the Legislature has consistently failed to keep government spending in check and failed to create a savings account that would protect the system from breaking down in lean times.
The Legislature's example is played out every day in too many of Oregon's households, where people live above their income levels and fail to save for the difficult times that come in our cyclical economy.
The current downward spiral of Oregon's economy has brought the problem to the forefront.
Over the past dozen years, state government hasn't grown in the number of employees. In 1990 there were approximately 39,000 state employees and there are the same number of slots today. And currently 7,000 government positions are vacant. So what contributed to the financial problems the state has now? The burden of funding education shifted from local property tax to the state general fund in the early 1990s. The additional revenues that the state general fund received from a booming economy went into paying more benefits and guaranteed returns on retirees' retirement plans. At the same time the Legislature continued to return millions in tax dollars to taxpayers through the kicker law. This money, instead, could have gone into a rainy-day fund.
As every new economic forecast shows today, the state's economy is not improving and the Legislature cuts away at those programs that face the smallest amount of lobbying pressure from constituents.
Now it seems that some Republican senators and representatives are ready to stop cutting and look to find ways to increase revenue for the state's general fund. One such measure recently passed in the Senate would disconnect Oregon from the federal tax code. If this effort is successful, it would mean that taxpayers would see their annual tax bills increase, creating $90 million to $140 million of new revenue for state government to spend. This kind of approach shows the failure of the Legislature to have a long-term plan.
It is the wrong time to nickel-and-dime the next two-year budget by finding places to make up the shortfall. We do agree that someone needs to take the lead in crafting a new plan that would create a fair tax system for the future of Oregon. Even though our legislators should be in the forefront of this kind of effort, we don't trust them. For now we should tough it out and live within our means.
Picking the pocket of every taxpayer through disconnecting from the federal tax code would only take money out of the hands of consumers who are best able to spend their money at local businesses. The Legislature has proven that a dollar given to them for the state to spend will likely fail to create any new jobs and most likely be lost in the morass of government wages, benefits and retirement guarantees.