Oregonians: Can You Handle the Truth?

By Representative John Huffman

The session ended June 29th and for virtually every Oregonian, that was not a day too soon. The old adage really is true that “your money is not safe as long as the legislature is in session”.On the House floor and in private meetings with leadership, I was told the same thing that the rest of Oregon was told, “We are facing a $4 billion deficit and our state revenue will be down.” We were told that, “drastic cuts were necessary to balance the 2009-2011 budget.” We were told, “Taxes must be raised to offset the state’s projected Decline in revenue.” This is the story that Oregonians in and out of the legislature have been told for the past 6 months.

Here is a much different story””the truth about those specific numbers:

First of all, our general fund revenue, a fund supplied by income taxes, is expected to increase from $13.2billion to $13.4b this biennium due to the taxes they passed against Oregonians during the last session.

Second of all, the state spent $49.1 billion in the 2007-2009 biennium and the legislature just adopted a $53.7billion budget for the 2009-2011 biennium, which represents a 9.3% increase in spending”¦spending money that we don’t have and we’re using hard-earned Oregonians’ money to cover it.

To be perfectly honest, it was like trying to find the pea under dozens of budget shells. In fact, if it weren’t for the work of Senator Chris Telfer, Senator Ted Ferrioli, Senator Brian Boquist, Senator Larry George and Senator Jason Atkinson, we wouldn’t have discovered these numbers to work with before session ended. As a part of the Senate and House Republican Back To The Basics Budget, this group worked with legislative fiscal and legislative revenue to identify agency end of fund balances.

We were told that as of June 2008 there were $4.9 billion in agency balances and 71.5% of those funds were fungible, in other words could be directed to the general fund to pay bills. 71.5% represents a little over $3.5billion. Our back to the basics budget was only going to use $500 million of that $3.5 billion and we could fund agencies at the 2007-2009 levels and not raise taxes to do it.

The responses we got from Governor Kulongoski and the House and Senate leadership were that, “It’s baloney,” “It’s not that easy,” “A lot of those ending balances are protected funds that cannot be touched, by law.” The truth is that the protected funds were the difference between the $4.9 billion and $3.5 billion. As legislative fiscal and legislative revenue stated, the rest could be used to pay bills.
Oregonians have been lied to and the result is that families will pay more at the grocery store and to fill their tank with gas and to raise the kids. Businesses will pay more in numerous business taxes and fees that passed on nearly party line votes. One of the most egregious taxes that passed is the “gross receipts tax.” A business will pay .0015% on sales/revenue over $500,000. On a $3 million crop, the surcharge will be over $3,700 and that is in addition to an increased corporate minimum tax that also has nothing to do with the profitability, of a company.

Who’s lying and who’s telling the truth? Ultimately, though truthfulness is critical, I think the real problem that continues to plague Oregon is that we are trying to do and provide too much, as a state. We have gotten way too far away from the principles of Adam Smith and Thomas Jefferson who believed that Government should provide very few services.

As Jefferson said and as I strongly believe Legislators should legislate, “Government should not take from the mouth of labor the bread it has earned.” There are efforts underway to put some of these tax increases before the voters in January and let the voters decide if the Legislature reached too deep into the pockets of all Oregonians.

Somehow, we have to find the courage to reduce the size of state government. We have to educate people that the government should not take care of us from cradle to grave and ultimately, find a way to instill the principle of personal responsibility as a necessary part of our permanent recovery plan.

Representative John Huffman (R””The Dalles) represents nearly 60,000 people living in Wasco, Sherman, Gilliam, Wheeler, Jefferson, most of Grant, and small portions of Deschutes, Clackamas and Marion Counties. During the 2009 legislative cycle, he served as the Vice-Chair on Business and Labor Subcommittee On Work Force Development, Education Committee, House Human Services Committee, the Ways and Means Subcommittee On Transportation and Economic Development, as well as on the Oregon Work Force Investment Board. He was recently appointed to a task force on SB 767 to make recommendations on virtual and charter schools. Representative Huffman has managed small businesses for over 30 years in a variety of sectors while living in The Dalles with his wife Korina and raising their eight children.

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