Progressive Viewpoints

Oregon one of 10 states in 'greatest fiscal peril' | Politics & Elections

Tax reform -- broaden the base, save the "kicker" in a reserve fund.  Broaden the economy.

Oregon one of 10 states in 'greatest fiscal peril' | Politics & Elections - - Oregonlive.com.

Even though the national economy has begun to rebound, Oregon is likely to have a harder time coming up with enough money to pay for schools and other public services -- or finding enough places it can cut back its spending -- than it did when patching together a balanced budget for 2009-10, said Susan Urahn, managing director of the Pew center.

Her reasoning: Oregon's unemployment will remain high, causing tax revenues to stay low; federal stimulus money to bail out state budgets has largely run out; and voter mandates including long sentences for repeat criminal offenders mean some budget cuts are off limits.

In the long term, states like Oregon would benefit if they diversify their economy, give lawmakers more latitude to make tax and spending changes and reverse voter mandates such as Oregon's unique kicker rebate that prevents the state from building reserves when times are good, Urahn said.

But lawmakers don't have time for a long-term fix when they must balance budgets for 2010-11 and 2011-12 and it's unclear how states including Oregon will keep from going over the cliff, she said. The January vote on whether to keep or reverse $735 million in higher taxes on corporations and high-income individuals will be one key decision point, she said

The nonpartisan Pew Center on the States is funded by the Pew Charitable Trusts and aims to conduct rigorous research on state policies to determine what works and what does not.

Beyond California: States to Watch (Oregon)

Beyond California: States to Watch.

Oregon: The downturn has severely affected some of Oregon’s leading industries, such as timber and computer-chip manufacturing, and exposed the state’s reliance on volatile corporate and personal income taxes—the result of voters rejecting a statewide sales tax nine times. State revenues plummeted 19 percent between the first quarter of 2008 and the first quarter of 2009, a reflection of Oregon’s heavy reliance on income taxes. Lawmakers this year approved more than $1 billion in new taxes to make sure the state can pay its bills. But voters in January 2010 will have the final say on $733 million in new income taxes that are part of that package, and the electorate historically rejects tax hikes at the polls. Download the report on Oregon.

Novick looks forward to joys of another campaign

Steve Novick discusses possible run for Oregon governor in 2010.

Novick looks forward to joys of another campaign:

"Government doesn't create new business," he added. "What it can do is get the fundamentals right and that produces a good business climate."

In Novick's view, getting the fundamentals right means having a well-funded government. For years, he has argued that taxpayers tend not to realize that the vast majority of taxes they pay go to services they value.

Novick is also once again talking about the need for higher taxes, just as he did during his Senate campaign.

"We're going to need to raise more revenue," he said, "and the most obvious place to go is that businesses in Oregon pay 24 percent lower taxes across the board than the average state in the union."

Novick also said he would support a temporary increase in income taxes for upper-income taxpayers to help fund services during the recession - and he wants to divert most of the "kicker" income tax rebates into a rainy-day fund.

[Jeff Mapes on Politics - OregonLive.com:]

Video: Oregon's 2009-11 biennium faces about $3 billion shortfall | StatesmanJournal.com | Statesman Journal

Grim news, but no surprise to me.  Here's what I said 1 1/2 years ago (September 2007) about the Oregon economy and recession:

Oh -- in Oregon, the market hasn't been hit as badly.  Some people say that's because we have a different economy here and it didn't get overblown and we won't be hurt as badly.  BS.  We just have a have trailing economy so the boom started later, won't go as high, and will end later.

I just forgot to add: and hit us harder, as it usually does.

Oregon's 2009-11 biennium faces about $3 billion shortfall:

"The perfect storm is here, and Oregon is feeling the recession more than other states," State Economist Tom Potiowsky said to lawmakers assembled in the House chamber.

Potiowsky said Oregon's economy may reach bottom sometime this year, but is unlikely to see much recovery before well into 2010.

“We’re basically falling into a pit, and we will hit the bottom sometime this year,” he said.

Oregon Republican leaders obstruct efforts to reconcile budgets

Oregon Republican leaders obstruct efforts to reconcile budgets:

“For a time, we held off the national economic tsunami brought on by the failures of Republican governance.  For a time we were able to avoid the effects of a conservative ideology that gave tax cuts to the rich and allowed corporations to operate without boundaries,” said House Majority Leader Mary Nolan (D-Portland).  “But now that tsunami is at our shores and Democrats must craft responsible solutions to the problems caused by an irresponsible Party.”

Despite comments to the contrary, Democratic leaders have made a good faith effort to include Republicans in the current budget process.  Both parties participated in discussions about potential cuts due to rapidly falling revenues.  The Democratic co-chairs of Ways and Means have met with both Republicans and Democrats, seeking out input, and giving both sides of the aisle the same briefings about potential cuts to state government.

“Democratic leadership has extended opportunities to our colleagues across the aisle to work with us productively to find a resolution to the state’s financial crisis,” said Devlin. “We sincerely hope that they will decide to contribute constructively to these discussions.  As yet, they have not.”

Devlin and Nolan said the Republican Leadership has not offered a list of specific cuts or specific sources of new revenue to balance the budget, nor have they said how they plan to fund education, healthcare or public safety.  So far this session Republicans spoke against the state’s economic stimulus plan and against measures to protect the state’s budget.

“Right now, we are dealing with the mess created from years of disastrous economic mismanagement by Republicans in the White House on down.  Now they are sitting on the sidelines throwing more garbage on the pile while we try to clean it up,” said Nolan.

The mission continues

The mission continues:

[Oregon’s Governor Ted Kulongoski said,] "When it comes to fighting climate change, recently I’ve been hearing a chorus of naysayers singing a three-part harmony of – too costly, too burdensome, and too soon. But this chorus is out of tune – and out of touch – with Oregon’s future.”

Governor's General Fund Budget 2008 - 2011

From the Governor's Revenue Summary:

State forests face hard choice on logging - Oregon Environment News - Oregonlive.com

So although the state is harvesting unsustainably, they want to cut more to boost revenue.  This is taking from Peter to pay Paul.  In this market you can't make up in volume because the price is so low.  The revenue will be low no matter what.  The problem is that expectations are too high, not that harvest is too low.

Re: State forests face hard choice on logging:

But it hasn't worked. The latest evidence: Calculations by the state show it has been logging more trees than the state forests can sustain under the 2001 strategy that also set ambitious goals for improving fish and wildlife habitat.

The findings deal a serious blow to the 2001 blueprint, which was billed at the time as a revolutionary way to satisfy increasing demands on the state lands in the Coast Range.

State forest officials are now recommending that the Oregon Board of Forestry lower its expectations for providing large, older trees valuable to wildlife. They say that would allow a small increase in logging, but still not enough to provide as much revenue as cash-strapped coastal counties have hoped for.

Clip: Update to the “state of the Oregon GOP”

Clip: Update to the “state of the Oregon GOP”:

Republicans are now at an historic low point as a share of the Oregon electorate, at least back to 1964, which is as far back as the online records go for the secretary of state. Last point: the key swing bloc remains that “other” category. They play the biggest role in determining whether Democrats or Republicans win election in this state.

Have Principles Become Too Inconvenient? - The Oregon Catalyst

Re: Have Principles Become Too Inconvenient?  - The Oregon Catalyst:

It is convenient for those that want to limit development without paying for the reduced value to ignore equal protection and to set-up two classes of citizens through a ballot measure. The inconvenient route would be to treat all property owners the same and pay the compensation where preservation is warranted and to allow the development where it is not.

The problem isn't the principles, it is that in today's world they aren't as simplistically easy to apply as he asserts.

After all, Measure 37 gave rights to people who purchased property 36 years ago that don't apply to people who purchased theirs 35 years ago.  Even though the vast majority of property owners purchased in the last 35 years.

So Measure 37 didn't provide “equal protection”.  It gave “special rights” to a favored few while diminishing the value of the majority who bought their property in the last 35 years with different expectations.

Furthermore, as we pretty much all know, the argument about no compensation doesn't hold water anyway.  I live on two 20-acre lots and pay but $55/year for one because of the special  tax treatment as part of the SB100/SB101 land-use package of land-use laws/compensation.  That lot is contributing about 1 hour of teaching for 1 student at our local elementary school, which is pretty much a free tax ride.  Think about it: in the 35 years since, that lot would finally pay for about 1 week of 1 student in school, cumulatively.

Technorati Tags: land_use, Measure_37