Senator Brian Boquist: Democrat leadership owes Oregonians an apology

Despite repeated denial, state report proves billions in “other fund” monies are still available
By State Senator Brian Boquist

Salem, OR — For almost a year, Senator Brian Boquist (R-Dallas) and other Republicans have been stating that state government has billions of dollars available in agency accounts that could be used to help balance the budget. Democrats have consistently turned their backs on these funds in favor of other revenue sources, flatly denying their existence. A recently released state report again clearly states that billions of dollars in “unreserved, undesignated fund balance”¦ was available for spending.” [1]

“Democrat leadership owes Oregonians an apology for ignoring these funds,” said Boquist. “Families are hurting, and important services are being threatened. It is unconscionable to think that special interests might have been driving leadership to deny the facts so other revenue options could be pursued.”

Democrats have made it a habit to bash the idea that government might have enough money to pay for the services that matter most to Oregonians:

Sen. Brian Boquist , R-Dallas, combed through agency budgets and met with legislative fiscal staff to come up with a list of about $1.5 billion in extra money that agencies have in their budgets. Of that, the Republican plan uses $500 million.

House Speaker Dave Hunt , D-Gladstone, questioned the legitimacy of most of Boquist ‘s findings, saying the so-called agency reserves are more of a “snapshot” of their accounts. At any one time, those funds could be far below what Republicans are counting on to pay for other state programs, Hunt said.

The Oregonian, GOP offers an Oregon budget free of new taxes, May 13, 2009,

Michael Cox, a House Democratic spokesman, says this claim is a farce.

The Republican spending plan relies on $1 billion in new revenue that he says is “plucked out of thin air,” and that if the Democrats actually had that money, they “could do a lot better for education” than the Republican budget does.

Bend Bulletin, In Salem, 2 budget plans and plenty of politics, May 25, 2009

The state reports having more than $2.5 billion of these non-tax monies, generated from fees and other sources – and Telfer and her allies want the state to tap it.

When she joined with other Republicans to broach the idea in May, she was widely ridiculed by Democrats who said her ideas were a red herring thrown up to defeat tax increases.

Bend Bulletin, Possibility of untapped millions gets a new look, December 5, 2009

The CAFR, prepared by the State Controller’s Division at the Department of Administrative Services to analyze the position of the Oregon’s fiscal affairs, states:

“As of June 30, 2009, the State’s governmental funds reported combined ending fund balances of $4.4 billion. Of this amount, approximately 25.1 percent was reserved for nonspendable items, such as inventories and permanent fund principal, or for specific purposes, such as debt service. The remainder was classified as unreserved, undesignated fund balance and was available for spending, subject to statutory and constitutional spending constraints.” [2]

The CAFR was released under the authority of Governor Theodore Kulongoski and bears the signature of Secretary of State Kate Brown who are both elected Democrats who served in the Legislature earlier in their political careers.

“Any Democrat who calls me a liar now will be calling the two most prominent elected Democrats in the State a liar too,” said Boquist. “What an ironic turn of events. Yet again, another “˜snapshot’ of state fiscal affairs shows large sums of money unreserved and undesignated. How many snapshots is it going to take?”

Early in the 2009 Legislative Session, former Senator Margaret Carter – Democrat, then the Co-Chair of the Ways & Means Committee, issue a memo to all Senators saying the Legislature had the authority to spend or transfer any statutory ending fund balance as it saw fit. It was backed by a legal opinion, and used as authority in to re-program a small amount of other funds while billions were left untouched.

Senator Boquist then introduced SB 931 calling for the creation of an Other Funds Reserve based on billions in ending fund balances. The bill was opposed by the Democrat majority in the Legislature thus did even get a hearing. The “red hearing” response was some of the ending fund balances were required by the Oregon Constitution. While a small amount does fall under the Constitution, the Legislature has the power to refer changes to the citizens of the State for a vote. Senator Boquist plans to re-introduce a bill creating an Other Funds Reserve in the so-called February 2010 Emergency Session as the Governor’s CAF Report claims an ending fund balance of $4.4 billion.

Other Funds are comprised of fee revenue and other funding streams that don’t include the income tax. Agencies generally have an ongoing authority to collect and spend Other Funds. The legislature has abdicated much of its budget authority to agencies in the arena of Other Funds, giving only a cursory examination on a bi-yearly basis but for the most part trusting agencies to manage their fiscal affairs.

Attached is an extract from the Comprehensive Annual Financial Report release this week by the Governor and signed by the Secretary of State.

####

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  • retired UO science prof

    House speaker Dave Hunt sounds about right to me, from my own local experience in higher education. Most of those “ending balances” are actually already committed to something else. The department that recently employed me carries a balance, generally. That money is already committed for future operations. If it were stripped away, we would literally have to curtail operations, pretty drastically.

    My guess is if the state ever tried to yank these funds, there’d be a pretty quick run on the bank. i.e. spend the money before it disappears, even if it’s not the best use of the money. If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies, do what you have to do.

    • Steve Plunk

      The CAFR states clearly that most of these ending balances are not reserved or encumbered. Always some excuse by the tax and spenders. The fact is the state is sitting on money while crying poverty.

      • retired UO science prof

        The fact is you don’t know what you’re talking about, at least when it comes to university finances, department finances. I’m in a far better position to know than you are, since when it comes to the latter I actually work(ed) in the real world, rather recently it turns out.

        The funds may not be legally reserved or encumbered, but their use is definitely planned. (Example of legally reserved would be a federal research grant; even that might not yet be completely “encumbered”.) I’m telling you, if they strip those “balances”, my former department will be cutting programs, the university will be cutting programs and/or raising tuition. As the kids would put it, the department will be ——, and then they (the students) will be.

        It’s no wonder the public doesn’t trust you guys to run things, or guys like Brian Boquist. I guarantee, I know far more about how my former department works than either of you. I admit, I’m not an expert on the state budget, but neither are you, nor I dare say is Brian Boquist. But I never claimed to know about more than what my own work experience enables me to know very well.

        You can sneer all you want at “excuses of the tax and spenders”, the fact is, you don’t know what you’re talking about. I hope you’re not as reckless with your own business — trucking, right? — as you are about other operations (like my recent one). Not only reckless, but obtuse to the point of being pigheaded. You say elsewhere you passed the CPA exams; I’m glad you’re not doing any accounting for me. I think you’d have a lot of trouble trying to have your own accounting business.

        • capor

          I am certain that Senator Boquist is alot more in tune with department budgets and carry overs than you will ever be. Brian has been dogging this hide and seek scheme for several years and is finally getting the democrat leadership to weaken to a point of truth. What more of us are afraid of is the “run out and spend” behavior that you just described. Alot of us would not be surprised by that response. You can’t keep it so you will destroy it to keep it from anyone else. A pretty good descriptive of liberal mentality I think.

          • retired UO science prof

            With all due respect, I will claim that I am far more in tune with how my department’s finances worked than almost any outsider could ever be, without hiring a high-priced outside accountant, who still wouldn’t know things like how to run a lab. It’s not “hide and seek” and it’s not to destroy anything, it’s protecting things — like keeping the department running, for hundreds of students, among other reasons — from destructive outside intervention.

          • Harry

            The science prof writes:
            “My guess is if the state ever tried to yank these funds, there’d be a pretty quick run on the bank. i.e. spend the money before it disappears, even if it’s not the best use of the money. If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies, do what you have to do.”
            ===

            capor replies:
            “Brian has been dogging this hide and seek scheme for several years and is finally getting the democrat leadership to weaken to a point of truth. What more of us are afraid of is the “run out and spend” behavior that you just described. Alot of us would not be surprised by that response. You can’t keep it so you will destroy it to keep it from anyone else. A pretty good descriptive of liberal mentality I think.”
            ===

            The prof replies:
            “It’s not “hide and seek” and it’s not to destroy anything, it’s protecting things — like keeping the department running, for hundreds of students, among other reasons — from destructive outside intervention.”
            ===

            LOL. No really, that is totally laugh at loud funny, especially at a science prof who spent so much time establishing his credibility on the subject of budgets.

            You gotta read the professor one more time:
            “i.e. spend the money before it disappears, even if it’s not the best use of the money. If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies, do what you have to do.”

            and then, trying to cover his foolishness…

            “It’s not “hide and seek” and it’s not to destroy anything, it’s protecting things — like keeping the department running, for hundreds of students, among other reasons — from destructive outside intervention.”
            ===

            I got it now, science prof.

            Your science dept is just trying to protect itself from destructive outside intervention, so they go and do crazy $hit like “If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies…” because, you know, you just gotta “do what you have to do.”

            Totally right when the commenter said “same old liberal mentality”.

            What a fool the science prof’s own words have made him out to be.

            A liberal fool.

            Who knows only ONE thing about budgets.

            And that ONE thing: SPEND!!! SPEND!!! SPEND!!!

          • Anonymous

            Methinks you’re taking the professor’s example of “100 tons of xerox paper” a little too literally, Harry. But seeing as you’re such an expert in the public finance game, what pray tell would you, as a libertarian administrator, do in that situation? Allow the money to disappear? Leave your department in the lurch?

        • Steve Plunk

          Typical arrogance from a professor.

          Look science guy, I know accounting and have examined many CAFRs so before spouting off about what I don’t know swallow some humility. I know that’s hard for those used to bullying undergrads but out here we don’t put up with such nonsense.

          Back to your uneducated point I would say sure, they have plans, but plans change when economic conditions change. If those monies are in the ending fund balances they have not been budgeted formally so it’s reasonable to make adjustments. If not legally encumbered these monies can be spent.

          Most of your rant was nothing more than a personal attack on me. Lovely. While you hide your identity I step up in public to discuss and debate public policy like an adult. My time spent on various committees and commissions and given me insight to the public sector and my education the ability so understand what I see. I never offered to do your taxes so don’t throw out that red herring, we’re talking about government budgeting, spending, and the CAFR’s (that’s comprehensive annual financial report in case you didn’t know, what was actually spent rather than budgeted). If personal attacks are the best you got I suggest you go back to school and learn some more tricks perfessor. I don’t start personal flame wars but I’ll damn sure not let old bullies get away with them.

          Now get back to scaring 18 year old freshmen.

        • eagle eye

          prof, I don’t know accounting, and I wouldn’t know a CAFR from a CAFE mileage standard or a cup of coffee, and I don’t care. Let the legislators hammer it out, they are so good at these things. So far, it looks like people believe the Democrats more than the Republicans, but who knows.

          But a while back I caught Mr. Plunk out in a remarkably silly statement about relativity — and that is a subject that I do know something about! Despite my best efforts to set him straight — I actually pointed to references by Einstein that show the errors of his statements — he didn’t show any sign of even realizing how ridiculous his statement was.

          So, prof, don’t be taken in by all the huffing and puffing about CPA tests, CAFR, participation on commissions, etc. etc. (I hope he knows more about those things.) As well as the fake outrage about your “personal attacks”.

          If you say they are counting on the ending balance in your department to buy lab materials for next year, I will believe you before I believe any of the other notables here. Just like I’d probably believe Mr. Plunk knows more about his business than you know about it. But then, I don’t recall you ever claiming to know anything about that.

          By the way, I think I understand about the “run on the bank” business. You have an account with a balance that you are counting on to buy supplies to run your the classes in your department next year. Somebody comes along and says they are going to take that money and spend it on, who knows what? And you say “Yikes! We’re screwed, buy the supplies now, even if we don’t know exactly what we’ll need next September”. Right?

          • Steve Plunk

            Eagle my friend, We’ll continue to disagree about Einstein’s theories. I believe I am still correct so to say you ‘caught’ me is disingenuous. My huffing and puffing is a result of the Prof trying to say I’m out and out wrong yet offering no evidence. He should know better and he should know better than to try bullying anybody but his students.

            The fact stands that ending fund balances can be used. Not all of them, but enough is available to make this tax increase unnecessary. Read what Boquist said carefully and you will see he is right.

            So the kindly retired professor reads it, reads my response, and promptly launches a baseless personal attack on me. Not the message, me. That my friend is an old tactic by those without much of an argument. Fake outrage? No, I’m genuinely outraged by anonymous insults. I’m especially outraged after having the courage to always post with my own name and stand behind my words. If the professor is retired he has no reason to hide his identity while lobbing bombs. You say you don’t recall him making claims of knowing anything about CAFRs yet he infers it by telling me I know nothing. That’s illogical.

            Like I told him, I don’t start these pissing matches but I’m sure not going to let him try an intimidate me like a student in class. He crossed the civility line and needs to apologize and get back on topic. I have my doubts but hopefully he will and then the discussion could continue the right way.

          • eagle eye

            Seems to me the good prof made a reasonable statement, on the face of it based on his real longstanding personal experience, about real consequences of the proposed idea.

            For his troubles, you came back with “excuse by the tax and spenders. The fact is the state is sitting on money while crying poverty.” (By the way, see my musing below about this pot of gold.)

            That seems like a pretty personal attack to me — ‘the retired prof doesn’t know what he’s talking about even though he worked in it most of his life, probably lying, making excuses for his and his department’s profligacy, one of those tax and spenders, falsely crying poverty’ is what I’m hearing. Also, I’ve heard you throw some pretty rotten eggs at professors here before.

            So then when he (she?) comes back with “you don’t know what you’re talking about” and more, it’s hard to blame him.

            If you STILL think you’re correct about Einstein, even with those two papers that were pointed out to you, I have to discount your judgment about other things.

          • Steve Plunk

            Twisting my words to what you hear is childish Eagle. Read what I wrote not what you think I meant. Using “tax and spenders’ is far from a personal insult. Your attempts to excuse his behavior are not working.

          • eagle eye

            Well, Steve, you hear it differently than I do. And your whiny, self-satisfied, passive-aggressive attitude comes through clearly.

            You’re always complaining about other people’s personal attacks on you. But yes, what you said amounted to a kind of personal attack on the professor, maybe “the good professor”, because he tried to make an informed statement here.

            And then with me, it’s “Twisting my words to what you hear is childish Eagle.”

            So now I’m “twisting your words” and being “childish” about it as well.

            And frankly, you are the one who sounds like a big baby. It’s always someone else’s fault, isn’t it?

          • retired UO science prof

            eagle, re the balance stuff — yes, you have it about right. People may think there’s a lot of money sitting in a an account, and there may be. But I can guarantee, there’s a plan for virtually every dollar. Even if the money is not yet formally “encumbered”, as the accountants put it on the budget reports which I looked at for many years.

    • Not Your Friend

      “Run on the banK” professor? You mean like how ALL these state agencies spend every last dime in their bank accounts before the next round of funding? (I’ve seen this done repeatedly during my 14 years in public agencies in another state, by the way – so don’t try to tell me it doesn’t happen in Oregon.)

      • retired UO science prof

        If you really want to know, read elsewhere here what that means.

  • Insider

    Senator Boquist:

    Your proposal will further cut schools, eliminate the vehicles for state troopers, cut more funding from college student tuition aid, cut rural business loans, etc.

    The Republicans who are now in favor of taking fund balances are the same Republicans who opposed the legislative action taking what real fund balances there were last February to re-balance the 2007-09 budget. What hypocrisy.

  • Oliver

    What utter nonsense. The only way funding for state troopers would be cut is because of the dems.
    Nonsense.
    You people are so gullible.
    It makes my stomach turn.

  • Diamond Jim

    Apology not needed. What is needed is for the repubs to get strong and push back on these fools.
    Until that time, this state will remain where it is – one of the least employed in the nation.

  • skippy

    There are significant legal restrictions on many types of public funding. Borquist and Telfers proposals are fiscally irresponsible. For instance, money in the state’s roads fund can only be used for roads and fees collected by the state have other strings attached by the laws authorizing them.

    R- House Minority Leader Bruce Hanna called shifting general funds in a floor speech, “bait and switch” which sends a message to Oregon citizens that it “is OK to fool tax payers into believing that they are supporting services with the taxes and fees they pay, when in fact the money is actually going to pay for something entirely different.”

    The fact is the tax collected on Oregon businesses would still rank Oregon as the 5th lowest out of 50 states. Oregon is currently ranked 3rd lowest.

    Anyone who believes the general funds can be dumped into a big pot and stirred together doesn’t understand dedicated funds, categorical funds or state laws.

    • Steve Plunk

      Boquist understands road fund money can’t be used. He has identified what money is available and can be shifted. By definition general fund money can be stirred together, it’s the mixing of different, dedicated funds that cannot. It’s not bait and switch, it’s responsible use of money we have.

  • Oliver

    Wow – low business taxes. I wonder why, then, so many businesses have fled Oregon as fast as they could?
    Might it be due to the fact that the employees pay some of the highest taxes in the nation?
    Yes, it might.
    Poor people do fine in Oregon, but people who make a good living pay a lot.
    Trust me.
    Dream on you people.
    DEMOCRAT: someone who takes money from someone who works and gives it to someone who does not work.

    • v person

      “I wonder why, then, so many businesses have fled Oregon as fast as they could?”

      What is your evidence for that Oliver? Have more businesses “fled” from Oregon over the past decade than have “fled” from other states? You have data? Please share.

  • skippy

    Erick Erickson, the editor of the blog RedState says no one really knows what a Republican is anymore.

    • Steve Plunk

      And your point is?

  • eagle eye

    This thought crosses my mind.

    You guys are always saying that the state can’t be trusted with a reserve fund, that they’ll spend every last dime they can their greedy, irresponsible fingers on. Pretty dastardly!

    Yet now we’re supposed to believe that there’s a pot of $4.4 billion of unused money sitting around, just waiting to be spent. That the Democrats have been hoarding this money, I guess to trick people into voting for higher taxes.

    Both pretty dastardly!

    But are we to believe both are true at the same time? I’m having a hard time with this.

  • skippy

    Eagle Eye there is no pot of money. Republicans don’t tell us how to fix things just whats bad. This “pot of money” is the latest attempt to bambozzle the voters. The Register Guard says tuition at Lane Community College will rise 9% if the measures fail. The Eugene school district has to cut 18 more school days if the measures fail.

    • retired UO science prof

      Skippy, I read the 9% figure for LCC. At UO, it will be less, because state support is now such a small part of the budget, even the basic operating budget, it’s only about 25% of that. But tuition will go up, or they will cut classes and maybe programs, I guarantee it. I guess it’s fun to pretend that there’s a pot of gold at the end of the rainbow, maybe they even believe it, but it’s just not true.

      By the way, the Democrats are just as shoddy in their own way, it’s just that they have a different way.

  • Harry

    I repost this at the bottom of the thread, rather than lost in the vast middle waste-land…
    ===

    The science prof writes:
    “My guess is if the state ever tried to yank these funds, there’d be a pretty quick run on the bank. i.e. spend the money before it disappears, even if it’s not the best use of the money. If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies, do what you have to do.”
    ===

    capor replies:
    “Brian has been dogging this hide and seek scheme for several years and is finally getting the democrat leadership to weaken to a point of truth. What more of us are afraid of is the “run out and spend” behavior that you just described. Alot of us would not be surprised by that response. You can’t keep it so you will destroy it to keep it from anyone else. A pretty good descriptive of liberal mentality I think.”
    ===

    The prof replies:
    “It’s not “hide and seek” and it’s not to destroy anything, it’s protecting things — like keeping the department running, for hundreds of students, among other reasons — from destructive outside intervention.”
    ===

    LOL. No really, that is totally laugh at loud funny, especially at a science prof who spent so much time establishing his credibility on the subject of budgets.

    You gotta read the professor one more time:
    “i.e. spend the money before it disappears, even if it’s not the best use of the money. If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies, do what you have to do.”

    and then, trying to cover his foolishness…

    “It’s not “hide and seek” and it’s not to destroy anything, it’s protecting things — like keeping the department running, for hundreds of students, among other reasons — from destructive outside intervention.”
    ===

    I got it now, science prof.

    Your science dept is just trying to protect itself from destructive outside intervention, so they go and do crazy $hit like “If it means buying 100 tons of xerox paper instead of spending it next summer on next Fall’s science teaching lab supplies…” because, you know, you just gotta “do what you have to do.”

    Totally right when the commenter said “same old liberal mentality”.

    What a fool the science prof’s own words have made him out to be.

    A liberal fool.

    Who knows only ONE thing about budgets.

    And that ONE thing: SPEND!!! SPEND!!! SPEND!!!
    ====

    …and I re-read it, just to get one more lol from it…

    • I-5 budget balancer

      Harry you’re such a great stylist! A deep thinker too.

      No wonder you folks are so bad at business. You couldn’t run a kool-aid stand.

      I’m glad the retired prof is/was in charge of things, not you.

  • skippy

    Name the two states that have lower business taxes than Oregon. Deleware and Utah. Thats where businesses can move if 66/67 pass.

    • eagle eye

      There does seem to be an awful lot of complaining in Oregon about taxes on the part of small business owners, doesn’t there?

      I know one guy, a successful owner of a small shop for many years. He once told me he didn’t care if he lived or died, because of the taxes in Oregon. I had a hard time believing I was hearing this, the guy has a nice house, a decent family, making a good income. He’s good at his business, too, he’s not in chronic danger of going under, and his hours have been very light for as many years as I’ve know him. He knows how to run his business! He’s also a decent guy, as far as I can tell.

      Recently he has sold the business for a good sum and retired. As far as I can tell, his income and taxes aren’t so much different from mine. Yet of all the things that would make my life no longer of worth to me, my taxes — taxes! — are far down the list.

      I had to wonder, is this guy clinically depressed? But why over his taxes? Seems like he might have a screw loose in some part of his brain.

      But not just him. It’s similar to what I hear from so many business types in Oregon, at least in the press and blogomedia. Is it the type of people that are attracted here? Or maybe the rain does it to them?

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