The Downside of Measure 68

At first glance, Measure 68 on this year’s Oregon Primary election ballot seems harmless enough. It would allow school districts to borrow money for capital improvements, including “land and other assets associated with acquisition, construction, improvement, remodeling, maintenance and repair.” The measure also would allow the state to borrow money and to match bonds approved by local voters.

Southern Oregon Senator Doug Whitsett worries that Measure 68 will enable the state, in effect, to max out its credit card easier than it can now. With the state facing huge financial pressures in the next biennium, he is concerned that we may be “”¦one little disaster away from not having any credit rating at all.”

While the measure thankfully prohibits the state from imposing a property tax to pay back the bonds it might issue, it does dedicate 15 percent of Lottery proceeds toward a new fund to help pay down the bonds.

As Gresham-Barlow school board member Dan Chriestensen suggests, this “”¦appears to add yet another ornament on the Lottery Christmas tree”¦.Given that the state would not be required to match funds”¦this would appear to invite a great deal of cronyism, favoritism, etc. The creation of the school capital matching fund looks like another slush fund for politicians and bureaucrats to play with.”

There is no organized opposition to Measure 68, just individuals like the senator and the school board member quoted above. And just maybe, voters like you.


Steve Buckstein is founder and senior policy analyst at Cascade Policy Institute, Oregon’s free market public policy research center.

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Posted by at 06:00 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Frank

    Childrens are the future and must be treated accordingly.
    No amount is too much.

    • eagle eye

      Is this Jerry? Where ya’ been, buddy?

    • Jon Nigbor

      After being hoodwinked on 66 & 67 Oregon voters shouldn’t ever vote for anything public employees, schools and their union needs again. Their PERS benefits are so out of balance that it seems they use every creative way they can think of to raise more money otherwise their benefits might be compromised.

  • Bob Clark

    Children will probably have to pay back the mounting debt, and all so the teachers union can rake in more bennies. So, #68 is a definite No for me. Yes on #68 is the case of “Do it to the Children,” not for the Children. When our current democratic leaders say do it for the children…you really need to read it as “do it to the children.” If this weren’t the case, children and their parents would be allowed to freely choose how to use their educational monies rather than public teacher unions.

  • Steve Plunk

    The government has proven itself incapable of spending restraint. Though the state and local government can’t deficit spend for current operations they have all learned to defer costs like pensions as well as borrow as much as possible to build facilities. Both put our children at risk of crushing debt and diminished services.

    Government by nature avoids responsibility and defers it’s accountability. It has become immoral in it’s behavior as it saddles future generations with the bills for it’s excess today.

    68 should be a definite no and a small first step to restoring fiscal restraint.

  • rural resident

    After reading the comments by Bob Clark and Steve Plunk, I’m almost beginning to regret my “No” vote on M68.

    However, I still think it’s the correct vote because of the phrase, ” . . . other assets associated with acquisition, construction, improvement, remodeling, maintenance and repair.” This phrase is so vague that it seems to allow schools to finance a wide range of short-term operating expenses, from computers and audio-visual aids to textbooks, with long-term debt–always a bad financial practice.

    I would have more patience with this had the Legislature not transformed the idea of allowing systems development charges for school construction in areas with rapidly growing populations into the “construction excise tax” a couple of years ago. This became a back door way to increase revenues for current operations, and M68 will be used in much the same way.

    Slicing “lottery revenues” up into smaller pieces is also disingenuous. Is this “15%” going to come from the part that already goes to education? I’ll bet it isn’t. If not, it has to come from economic development or some other use, and we need more of a debate about trading off these other uses for additional revenues going to schools. It isn’t as though lottery revenues are automatically going to increase by 15% to accommodate this new use.

    • Steve Buckstein

      rr – While the measure does allow financing of some short-term assets, it apparently prevents districts from financing those assets with long-term debt, based on the following language in the measure:

      “(4) The weighted average life of bonded indebtedness incurred on or after
      January 1, 2011, to finance capital costs may not exceed the weighted average life of
      the capital costs that are financed with that indebtedness.”

      Unfortunately, there doesn’t seem to be the same restriction placed on any state borrowing used to match the local bonds.

      The entire text is at https://portal.sos.state.or.us/division/elections/may182010/military_vp/m68_text.pdf

      • rural resident

        Steve … The problem here is with the phrase, ” . . . the weighted average life of
        the capital costs that are financed . . .” Whether this “weighted average life” is based on GAAP or tax law, there is considerable flexibility in defining the life of fixed assets. A computer could have a “useful life” of a year–or ten years.

        Also, once the debt is assumed, what happens should the district decide to refinance–and extend–it at some point? This could be mixed with other assets (with other useful lives) in ways that would be almost impossible for the average citizen, even one with accounting/tax knowledge, to wade through. How many people that you know would be willing to plow through several levels of such financings to determine whether the regulations were being followed?

        • Anonymous

          rr- thanks for the explanation. I agree with you that there seems to be much room for districts and the state) to continue with irresponsible debt management. This will likely come back to haunt taxpayers.

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