Strategic Budget Reductions

With the rapidly shrinking tax revenues (down $180 million in the February projection and due to drop even farther in the upcoming projections) the principle tasks of the 2009 legislature will be two-fold: 1) rebalance the current budget to account for the growing deficit, and 2) prepare a budget for the ensuing biennium in light of decreased revenue projections.

Oregonians can assume the first task will be made more difficult by the refusal of Gov. Kulongoski to implement any significant spending reductions prior to the meeting of the 2009 legislature; thus ensuring that the entire biennium shortfall must be made up in the final quarter of the 2007-2009 biennium. This mismanagement will make the impact eight times worse than had he appropriately managed spending. It is also safe to assume that Kulongoski and his Democrat colleagues who control both houses of the legislature will refer to the 2009-2011 budget as deep budget cuts when in fact they will represent lower budget increases from the previous biennium. And finally, it is also safe to assume that the solutions that originally proffered by the governor and the legislature will be the ones that induce the most pain and alarm — all designed to convince Oregonians that they need to raise taxes.

What they will never talk about are three simple adjustments that are rarely discussed and the beneficiaries of which would like them to remain unexplored.

First, the state is overrun with illegal immigrants. They impose an enormous burden on the state’s education, healthcare and welfare budgets. By removing the incentives for people to enter the country illegally, you can have a dramatic impact on the budgets without reducing benefits to those that are here legally. Let me repeat that. By removing the incentives for people to enter the country illegally, you can have a dramatic impact on the budgets without reducing benefits to those here legally.

Arizona has adopted the toughest employer sanctions law in the United States. Employers in Arizona face the loss of their business licenses if they knowingly hire illegal immigrants. The results have been dramatic. Illegal immigrant advocacy groups acknowledge that huge numbers of the illegals have left Arizona and returned to their native lands. In twenty-one school districts in Maricopa County (metro-Phoenix) there has been a reduction of almost 6400 students. David Lane, a Mesa school-board member is quoted in the Arizona Republic as saying with regard to the decline in student population: “It’s not entirely unexpected with this immigration law that came on line January 1. . . I have a sense unless the court intervenes, more will leave at end of the school year.”

That’s right, the new employer sanction law only became effective on January 1 and the prosecuting attorneys elected to not enforce it until March 1 to give pending appeals a chance to be decided. (Illegal immigrant advocates have twice tried to overturn the law, once in federal district court and again before the notoriously liberal United States Ninth Circuit Court of Appeals. They have failed both times.) When the full force of the law is felt, it can reasonably be expected that the impact on the schools will be four to five times the initial impact.

But most importantly, it is a permanent reduction in spending that does not impact other students. A comparable law in Oregon would have similar impacts and those impacts would spread from school attendance, to healthcare provisioning to welfare payments. All permanent reductions without impact to those lawfully entitled to benefits.

Second, limit public employees to one raise per year. That’s right, one per year instead of the three that many are currently getting. Under many public employee union contracts, employees are entitled the following salary increases:

ï‚· The annual percentage increases in the collective bargaining agreements.
ï‚· The annual increase for just showing up to work for a year — known as a step increase and seldom, if ever, discussed.
ï‚· An annual increase each time the minimum wage is increased. Many of these collective bargaining agreements peg the wages to a differential between the minimum wage and the bargained for wage. Therefore, when the minimum wage increases so do their wages. Oregon now has an annual statutory indexed adjustment to the minimum wage with a resulting annual indexed adjustment to the union wages.

And third, eliminate all funded but unfilled positions and eliminate all part time positions where there are multiple part time employees in a single department. When budgets are prepared by state agencies they receive funding for a determined number of positions. Administrators routinely overstate these numbers so that they can use the funds for other discretionary purposes. Eliminating these unfilled positions will not result in a reduction in services because nobody is in them currently providing services. Combining multiple part time positions into a smaller number of full time positions will not result in a reduction in services because you will have the same number of hours being worked by a smaller number of people. The savings will occur in not providing benefits to additional numbers of part time employees. The benefits are substantial, including almost $1000 per month for healthcare benefits and a surcharge of nearly twenty percent for PERS.

These are three solutions for reducing the budget without adversely impacting the public. But that isn’t how politicians make decisions, particularly when they are using public money to reward their political constituents.