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Home arrow Opinion arrow Our View arrow NO QUICK FIX TO STATE'S FINANCES



It would appear at first glance that Monday's economic summit in Portland attended by top political and business leaders didn't come up with any significant new ideas on how to solve the state's tax woes. Why should anyone be surprised? Oregon has created a monster in several arenas of government spending. There is no quick fix.

OREGON'S educational system is eating away at the general fund faster than an out-of-control train, while on the horizon is a retirement system that has promised a minimum return on investment of 8 percent annually even when it lost money. The Public Employees Retirement System, with 300,000 members, has a liability of over $15 billion, and the number is growing. PERS could end up draining every participating government entity. Balancing the fund would require $5,000 from every taxpayer.

So what is our political leadership suggesting to do to right the ship and create more tax revenue, which is being interpreted as creating more jobs in Western Oregon? Here is the list:

EVALUATE FEDERAL RESEARCH funding and grant opportunities that could create significant jobs or new companies in Oregon; seek a new federal-state partnership with the Bush Administration that gives the state more flexibility to manage critical environmental and natural resource issues; seek federal funding to bolster engineering education in the state; create a business recruitment strike force with representatives from the offices of senators, the governor and the economic development department; meet regularly to discuss trade promotions; form a team to identify untapped federal education grants; tap federal funding for job training, self-employment and microenterprise programs.

From business leaders, the advice is to create a sales tax. Ron Parker, CEO of Hampton Affiliates, shared the idea of a sales tax. At the same time, John Harker, CEO of InFocus Corp., said the Wilsonville-based company remains the industry leader in making projectors for computer presentations but continues to shift much of its manufacturing oversees. Harker said it is distasteful but is what companies have to do to stay competitive.

The state is looking to the federal government for money or solutions and business owners think we can tax ourselves out of the current crisis or move more production offshore.

OREGON'S REVENUE WOES were created by governors and legislators spending too much too fast and making promises to PERS members that were unrealistic. Oregon benefitted from low-priced industrial land and economical labor costs. While we grew, leaders forgot that bad times eventually come — and that means less revenue. Why weren't our elected officials heeding warnings that government was spending too much too fast?

There will be no quick fix to the state's general fund problems. Borrowing from the future would be like paying the bills of one credit card with another credit card. The lottery is already being over used. And taxing ourselves more won't solve the problem.

The state needs to take on each problem one at a time, starting with PERS. A commitment on the part of labor unions and government employees to reduce the cost and change the system to be more equitable for taxpayers would go along way in rebuilding the public's trust in government. Dealing with the educational system, kindergarten through higher ed, could help reduce the general fund imbalance without cutting all the other departments the state operates. At the same time we must find businesses that will create new jobs in Oregon that pay well. Finally, as we come out of funk we are in, we need to set aside a billion dollars for future downturns.


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