Measures 66 & 67: A New Report But An Old and Bogus Story


Gov. Kulongoski and his Democrat colleagues in the state legislature have released a document prepared by the Legislative Fiscal Office designed to show the effects on state government if the voters reject the massive tax increases passed by the legislature in 2009. It’s bogus.

The Legislative Fiscal Office (LFO) is generally described as a non-partisan body whose job is to give accurate budgetary information. However, the LFO is just like a computer — garbage in/garbage out. In this instance the LFO has simply cataloged the amounts given to it by Kulongoski’s administrators in state government. In other words this is not the independent recommendations of how to best reduce government spending. It is simply a mathematical computation of a highly partisan administration, which has designed its responses to impose the greatest burden on Oregonians while maintaining and expanding the employment and benefits of the public employees unions who provide most the campaign financing for Kulongoski and the Democrats in the legislature.

The documents supporting the compilation by the LFO are available on line. As usual, and by design, the layman’s ability to wade through these is severely compromised by the mind-numbing series of funds, programs, abbreviations, and bureaucratese. The budgeting process is never meant to illuminate, rather it is designed specifically to confuse and protect the domains of political appointees.

The most difficult thing to determine in any of these reports is whether and how many public employees are being reduced. (The primary exception is the Department of Corrections where the response is designed to horrify the populace by closing the Mill Creek, Columbia River, South Fork, Shutter Creek, and Santiam facilities and releasing 1800 convicted felons on the general populace.)

I say that because since Gov. Kulongoski began his second term — not quite two years ago — he has added 2,400 people to the state payroll. In the meantime, over 130,000 private sector jobs have been lost. In the few instances where state employee jobs are mentioned, the reductions are not from existing employees but rather from refraining from hiring even more employees. Take for instance the response from the Department of Human Services:

“CAF – Targeted Non-program/Administrative budget reductions: Due to budget shortfalls in the 2007-09 biennium, DHS CAF implemented hiring delays, selected non-direct service position freezes and stringent limitation or elimination of out of state travel and further restrictions in all other nonpayroll cost categories (supplies, professional services, etc). These actions were continued into 2009-11 due to the 4% Personal Services and 2% Services and Supplies reductions that were taken by the 2009 legislature and to cover other necessary costs. To achieve further reductions at the 1.5% level, CAF may need to expand hiring delays to direct service staff. To achieve the second 1.5% it will be necessary to expand hiring delays to direct service staff. Delays and other impacts on direct service and non-direct service staff wil affect services provided by CAF to the citizens of Oregon especially when combined with the impact of rising caseloads and office closures.”


I noted in a previous column:

“Roughly eighty-five percent of the state general fund and lottery budget is spent on personnel. You cannot achieve budget reductions without reducing the number of personnel. . . .

“I am told by legislators that the “rule of thumb” is that $50,000 is the rough equivalent annual salary. Add to that the twenty-four percent surcharge for PERS (eighteen percent required by PERS plus the six- percent contribution by employees that the state has agreed to pay on their behalf) and that figure becomes $62,000. There is another 7.65% for FICA and Medicare which brings the total to $65,825. Add to that the approximately $1200 per month paid for the public employees Cadillac health insurance plan and the total now becomes $80,225. By rolling back the total number of state employees to the January 1, 2008 levels, the state budget can be reduced by $192,540,000. If the current state government administrators are unable or unwilling to make such reductions, then new administrators should be found who can and will.”


That is $192.5 Million per year or $385 Million for the biennium — that is one-half of the so-called budget shortfall.

So here’s what you have to ask yourself. Has your life improved over the past two years because of the addition of 2,400 public employees? Were the Mill Creek, Columbia River, South Fork, Shutter Creek, and Santiam facilities closed before Kulongoski hired an additional 2,400 public employees? Where were those 1800 convicted felons that Kulongoski wants to release prior to hiring the additional 2,400 public employees? Did the addition of 2,400 public employees have any impact on the number of businesses that closed or the 130,000 private sector jobs that were lost?

If you are to believe Gov. Kulongoski and the Democrat legislature, if Oregonians fail to accept the massive $733 Million tax increases, the prison doors will be thrown open, schools will close, children will be denied food and medical care, and the elderly will be found wandering the streets fighting feral cats and dogs for the remnants of a Burger King dumpster. This is the same parade of horrors that former Gov. Kitzhaber, now Gov. Kulongoski and the Democrats used to try to scare the beejeezus out of voters in 2002 and again in 2003 when similar massive tax increases were passed, then referred to and rejected by voters. These scare tactics are so routine and predictable that only the government class who initiates them believes in their veracity.

There is a simple solution to the budget problem. Roll back the number of public employees to the levels at the beginning of Kulongoski’s second term. Recapture the gratuitous 5% salary increase that Kulongoski gave to the public employees unions — an increase in addition to the bargained for annual salary increases and step raises. Eliminate government benefits (welfare, healthcare and educational) for illegal aliens. None of these actions will impact benefits and services to Oregonians — no prisons will be closed, no schools will be closed, and no Oregonians will be denied food or medical care as a result. But the sum total of these actions can reduce state government spending by over $1.4 Billion* for the biennium — more than enough to cover the so-called “shortfall” AND introduce private sector incentives** to create and grow jobs in Oregon.

_________________

*
ï‚· $385 Million from the rollback of government employees
ï‚· $296 Million from eliminating the gratuitous 5% salary increase
ï‚· $800 Million from terminating government services for illegal immigrants

**
ï‚· Create a tax free capital gains for all investments made for the next ten years and couple that with a reduction on capital gains tax to one-half of the current rates phased in over the next five years.
ï‚· Accelerate depreciation schedules for all capital investments made to at least equal those utilized under federal income tax laws.
ï‚· Create a tax credit for one-half of the amount that wages exceed federal minimum wage standards for each new job created from November 1, 2009 until January 1, 2012.
ï‚· Create a series of utility corridors throughout the state that will a) result in energy being transported from where it is generated to the state’s metropolitan areas, and b) in which the permitting process will be determined within a six month process.

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Posted by at 06:00 | Posted in Measure 37 | 30 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Reper

    I question whether you can capture something that has already been spent.

  • Rupert in Springfield

    When I was in High School there was a cover on National Lampoon magazine. It was of a hand holding a revolver to a Dalmatians head. The headline read “Buy this Magazine or We Will Shoot This Dog”.

    I was disappointed when, after not buying the magazine and checking back every few weeks I saw nary an issue with dog brains scattered across it. I knew I had been tricked. My innocence lost I gradually entered adult hood.

    That’s the situation with our state government. No matter what the issue, unless they get more money, our kids will starve, old people will die and convicted felons will be set free to prey upon us.

    Its as predictable as what will happen one week after this articles post. We will hear endlessly about ” well where would you cut?” from the crowd that loves to raise taxes. Articles such as this one, suggesting specific cuts appear here on at a minimum a bi weekly basis. Yet we will constantly hear the refrain from the tax raisers and government praisers that no one ever suggests where to cut. Its ludicrous.

    Of course the jails were not staffed by those 2,400 new workers. But clearly Ted would rather set felons free to attack the citizenry rather than fire the 2,400 roll back staff to previous levels, eliminate the raise etc.

    Firing the 2,400 might hurt those in political power. Setting the felons loose might hurt you.

    I guess Teds choice, setting the felons free, should tell you a lot about the priorities in Salem.

  • v person

    No more taxes. I was just out pricing a thong for myself and have noticed the prices have gone up 25% for the ones with the tassles. We can’t afford new taxes when neccessities like this are going sky high.

  • Reper

    Too much information!

  • ThinkOregon
    • v person

      You are asking the impostor v person, not the one and only. She is just having some fun with you.

      I shop in lots of places. Depends on what I am shopping for.

    • v person

      I like to shop at the many gay venues that downtown Portland offers.

  • retired UO science prof

    “So here’s what you have to ask yourself. Has your life improved over the past two years because of the addition of 2,400 public employees?”

    Well, Larry, probably some of those 2400 new employees work at Oregon public universities that’s OUS system, where enrollments are up 5% or so this year. That’s about 4000 students. Maybe their lives have improved.

    One thing is almost sure: if the tax cuts don’t pass, the higher education budget will be cut, along with everything else. I don’t know how the prisons will be affected, but tuition will be raised on 80,000 students to (partly?) make up the difference.

    By the way, if there are any illegal aliens among the students, kicking them out won’t make any difference in costs.

    • Steve Plunk

      Most of those freshmen are being taught by overworked grad students while the professors sit in their offices networking with other “academics”. A good portion of the new hires in higher ed are administrators as well. Sorry professor, the academics from the 60’s, 70’s, 80’s and the baby boom generation is trying to bankrupt us. Fiscal discipline is needed now.

      There’s plenty of fat in the higher ed system to cut before any tuition raise is needed. Like Rupert pointed out it’s another dog and gun threat.

      • eagle eye

        Really? Do they have grad students teaching there at SOU? They claim that all their courses are taught by professors.

        Do you think that tuition will not go up at SOU?

        • Moe

          Right, professors who are overworked and underpaid no doubt.
          What a joke.
          That whole place is a joke. And so are the “professors”.

          • sensible moderate conservative

            Moe: Don’t go there. And stop it with the attitude!

      • current UO student

        My two cents: I am a current student at UO and I can assure you that none of my “freshmen” classes were ever taught by grad students. Yes, some intro classes employ Graduate Teaching Fellows, but these are few and far between and to suggest that the GTF’s are the primary instructor in those circumstances would simply be untrue. I have been pleasantly surprised thus far by the quality of my professors (at UO), and while I would be dishonest if I said I didn’t feel that a few of them were less than committed to their students, those individuals are most definitely the exception, not the rule.

        And, being that you seem to be unaware, tuition already went up for the 2009-10 school year (and that was after February 2009 budget cuts). If M66 and M67 don’t pass, there will be a significant tuition increase again next year. I get it that you and the Oregon Business Council don’t have any use for “higher ed” (other than as something to pay lip service to), and I get it that libertarian business folk like yourself resent carrying any tax burden whatsoever, but please, do all of us debt-burdened-no-income-having-going-to-graduate-into-a-barren-job-market-not-because-of-poor-legislation-but-because-of-incompetent-unimaginative-business-people students and our already underfunded education system a favor and STFU.

        In terms of administrators, I agree. I never could figure out how Dave Frohnmayer was worth $750,000/year to UO? What’s that about?

        • Moe

          I suspect if they had not paid this guy that much your tuition would not be so high.

          • retired UO science prof

            Actually, the better part of his pay came from the UO Foundation, which is funded by private gifts. His public pay also comes from athletics, research grants, dorms, etc.

            Probably tuition costs were about $5 per student.

      • retired UO science prof

        Well, tuition will be going up when and if the tax increase goes down. Don’t like it? Don’t think it’s worth it? Don’t go to one of the “public” universities. Quit the whining!

        to current student: I was not a fan of Dave F, but his $750K his last year involved, I think, a good chunk of deferred compensation i.e. pension contributions he had earned in earlier years (when he made a lot less). The new guy Lariviere makes I think something like $500K. You may or may not think that’s too much, but it’s what the market says such guys are worth these days. Yes, the market, these libertarian types should understand that. Try to hire someone for less, and you see the results in the applicant pool, I saw it myself on a few search committees.

        And of course, $500K is chicken feed compared to what a lot of those Wall St. losers will be making this year. Even compared to a lot of Oregon business execs.

        • Anonymous

          I could be wrong, but I’d wager that Frohnmayer is above reproach in this neck of the woods. He is a Republican after all.

  • matthew

    you know whats funny i called for all illegal aliens and their anchor babies to be cut off all state services and blueoregon.com a pro liberal site has blocked me from posting on their site for staing that.i love oregoncatalyst.com.just think how much our lives have really improved with 2400 more state workers.just think more pers money eating up resources.the higher ed budget will still be very generous even with cuts.why should we spend any more money on higher ed and k-12 when ever increasing pers costs will suck up darn near all of it?could one of you education advocates pleas give me a solid reason on that?education dont gurantee you anything in this bad economy and thats what you education advocates fail to realize.what good is an educated workforce if they cant find a job?what did that education get them?

    • current UO student

      “why should we spend any more money on higher ed and k-12”

      Sing a different tune already, buddy. Nobody was advocating for fiscal irresponsibility. We “education advocates” were merely pointing out that tuition will rise if M66 and M67 do not pass. There was nothing political about it, just an observation of cause and effect.

      “could one of you education advocates pleas give me a solid reason on that?”

      Believe it or not, matthew, universities make more of a contribution to our society than just educating young people (and that’s a pretty significant contribution).

      “education dont gurantee you anything in this bad economy and thats what you education advocates fail to realize.”

      I think you’re mistaken actually. We’re all very well aware that education does not come with guarantee of employment, but thanks, very insightful.

      “what did that education get them?”

      Are you seriously asking that question? If yes, then the value of education is so far beyond your ability to comprehend that it isn’t even worth discussing with you.

      By the way, you seem like you might have an anger problem of some kind. You might want to talk to somebody about that, it could improve your quality of life. Think about it.

  • sensible moderate conservative

    The retired prof, the student have it about right. Tuition will go up, the students and their families be paying even more of the share of costs at the public universities. I hear it’s about 75% already. Those who want these services will be paying for them, and those who don’t think it’s worth it can do without. The whiners who think government education services are not worth the money can take their complaining to the bank.

    A lot of these so-called conservatives are really right-wing fanatics who think they are superman types, above the law, but really, they’re losers. Sizemore a poster boy. Some of them run marginal businesses that are constantly getting clipped by government, fines for breaking the law and such. They resent people making good money at professions, people with an education. Small-timers with an attitude.

  • matthew

    tuition will continue to rise regardless if this measure passes or not.i dont fall for the same old tired scare and extortion scare tactics the liberal education advocates use.you guys never mention ever how much we really spend per pupil.oregon very generously funds k-12 and higher now and has forever.i am tired of being asked to pay more and more taxes just to maintain the ever increasing pers pension and health care costs of state workers including all education workers and teachers.i am mistaken that education dont gurantee you anything?sorry i am correct?why dont you liberals try telling that to all the college graduates who are struggling like crazy to find jobs in this economy now?what did that 4 year degree get them?especially you liberals who always promise to help these kids find jobs after they graduate but 9 times out of 10 that never happens.you liberals might want to start telling us the real truth about education funding and how much schools really get for once instead of name calling and questioning whether i have an anger problem.you liberal education advocatesc are real whiners and i am tired of the nonstop whining about fund from you guys.10,000 bucks a pupil is more than enough money to give k-12 and college students a quality education.you might want to get some real education about real school funding so you liberals can comprehend things better.

    • current UO student

      Well, matthew, I stand corrected. You sound like a very pleasant, educated and reasonable man. I promise to never lie about the value of education, to myself or anyone else, ever again.

      • retired UO science prof

        Look on the bright side, student. When the meager state support for UO — about $3000 per student per year, including the out of staters who receive no state support — is finally eliminated, these people will have no further grounds for their dumb, angry complaining.

        And, if the money is used instead to pay for prisons, which is all they seem to care about, there at least will be a spot waiting for high-profile tax evaders, and other criminals!

        • Anonymous

          The bright side is bleak, prof.

  • Ron Morgan

    Huss touts Arizona’s policies on undocumented immigrants as salvation for Oregon’s budget woes and leaves out the part where their Republican Governor and Republican controlled legislature face a $3 billion deficit next year. The Republican governor suggested a referendum to raise their sales tax but was defeated by her own legislature. Instead, the Senate President is suggesting four-day school days, and more furloughs for other state workers (too bad if these workers provide services you need, like in the courts, or the DMV. I guess you can just take a number). Arizona’s budget crisis is second only to California’s in terms of percentage of their budget.
    You want scare tactics, look no further than the Republican Republic of Arizona. That’s our future, and not too distant, if M 66 and 67 fail.

    • Garnet

      As a retiree who spends a few months in Arizona and a few months in Oregon each year, I can attest to the fact that Arizona is not doing well since the construction and real estate markets were hit by the recession. As we drove back to Oregon two days ago, the cuts in Arizona were visible to us by the numbers of rest areas that have been shut down. Businesses of all types have been closing in record numbers in Arizona, as they have in Oregon, but Arizona does not want to increase taxes to help schools, businesses, or ADOT. The only construction visible in AZ is what the stimulus money is funding.

      Finally, after two years of Arizona’s employer sanctions law, the first business is just now being charged with hiring illegal immigrants. Why so long? Apparently. it’s much easier to simply drive around Maricopa County and pick up anyone who looks like a Latino. Why pick on the workers? They would not come to the U.S. unless there were employers who would hire them.

  • bonney

    I recently read this via the Oregon Bus mag daily email,

    Agencies outline effects of cuts

    http://www.oregonbusiness.com/high-five/10-high-five/2697-state-agencies-lay-out-cut-effects

    http://www.registerguard.com/csp/cms/sites/web/news/cityregion/23926913-41/story.csp

    As we can see, the highly visible jobs are on the line. I’m focusing on the 118 jobs for the OSP to make a point here..

    ” Oregon State Police said it would eliminate the equivalent of 118 full-time positions, along with making nonpersonnel cuts, such as reducing fuel purchases for patrol cars.”

    How many people are employed by the state? 15,000, 20,000 or more or less? Does anyone have this number?

    118/15,000…. Where are all the other non visible jobs? You get my point regardless of my denominator value..

    This is good work too: Note to Obama: Only Private Sector Creates Wealth, Jobs

    http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2009/11/30/note_to_obama_only_private_sector_creates_wealth_jobs_99341.html

    The stimulus failed chiefly because it was designed more to reward the president’s political allies than to fight the recession. But the stimulus failed also because stimulus funds were used to preserve jobs state and local governments could no longer afford because of falling tax revenues. The private sector has borne more than 100 percent of the job loss because state and local governments have added 110,000 jobs, according to an August report by the Nelson A. Rockefeller Institute of Government.

    Federal government civilian wages averaged $79,197 last year, according to Free Enterprise Nation, compared to the average private sector employee’s wage of $49,935. When benefits are included, federal workers have pay packages twice those of private sector workers, on average.

    • eagle eye

      I think there are something like 75,000 state jobs.

      re Federal salaries — few of them are for burger flippers. If you work for NASA or the IRS or the FAA, you’re probably doing a pretty high level job. Compare apples to apples.

      Why just civilian wages, by the way? Do you really think a fighter pilot deserves more pay than a cab driver? Or even a truck driver? Should someone in the infantry make more than a security guard?

  • Miato

    COMMENT_DELETED

    • eagle eye

      And starting off the week with brilliant blue skies and sunshine is fine!

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