100 Ways to Balance Budget without TAXES!!!

100 Ways to Balance the State Budget without new taxes!
— There is no need to raise income taxes, business taxes, tobacco taxes or health care taxes.
By Taxpayer Association of Oregon

These ideas have been collected from Oregon lawmakers, think tank groups, taxpayer organizations, unions, policy analysts, Democrats, Republicans and even ideas utilized in states across the nation.   Disclaimer: The ideas collected in this report DO NOT represent an endorsement from Taxpayer Association, the reference sources, nor the various ways a good idea can be amended into a counterproductive piece of legislation. We offer these ideas as a starting point to a discussion by welcoming a diversity of input across the political spectrum.

Your idea requested: This is an evolving report. If you have an idea or current legislation that you wish to have listed in this report, please email us at [email protected]. If you represent expertise on an issue we have listed and wish to be added as a source, please contact us.

BUDGET REFORM

Require Certification of All Spending Bills
(2011 Session) House Joint Resolution 41 would add an important layer of budget accountability by requiring the State Treasurer to certify that all spending proposals are funded with available or estimated revenues. Spending bills that fail certification could not be presented to the Governor. (For more information, contact Rep. Gene Whisnant’s office at 503-986-1453.)

Identify Core Functions of Government
The current budget crisis affords Oregon the opportunity to assess its budget practices and reform its spending habits. State government could establish a task force to help set state budget priorities. Under former Governor Gary Locke, Washington State created a similar taskforce that helped close budget gaps through a clear system of priorities. (For more information see Cascade Policy Institute at cascadepolicy.org or contact at 503-242-0900.)

Prioritize Government Services
Request agencies to divide government services into three categories of priority: high (33%), medium (33%) and low (33%). This proven process helps create transparency. It’s essentially a “Buy Next” and “Do Not Buy” list. Governor Gregoire of Washington used its Priorities of Government (POG) list, created and managed by the Washington Office of Financial Management, to help formulate her balanced, no-new-taxes 2009-11 budget. (For more information, see http://www.ofm.wa.gov/budget/pog/default.asp.)

Fund Priorities First
Agencies should be responsible for allocating their funds according to their established priorities. Following the May revenue forecast, agencies would be given their budget and begin funding at the top of their priority list. When the money runs out, services are de-funded. (For more information contact the office of Rep. John Huffman at 503-986-1459.)

Enact Zero-Based Budgeting
Too much of the state’s budget operates on autopilot with lack of appropriate justification for proposed spending. Zero-based budgeting would require agencies to justify all dollars spent before approval.

Adopt Long-Term State Budgeting
The Governor and Legislature could be required to adopt a ten-year state budget that outlines projected revenues, current-law expenditures, and anticipated future expenses. “The adoption of a long-term state budget that compares on-going expenditures with anticipated income will enhance the Legislature’s ability to make better spending decisions, as well as give the public a better view of long-term program costs.” Associated Oregon Industries. (For more information, see Associated Oregon Industries at www.oia.org.)

Establish a “Real” Rainy Day Fund
The current economic downturn has proven that Oregon needs to better prioritize its commitment to the Rainy Day Fund. To that end, the state could be forced to save money before spending it all. Instead of tying investment in the Rainy Day Fund to ending balances, Oregon could put a certain percentage of incoming revenue into the fund for when the economy runs into a serious recession. (See Interest-based Rainy Day Plan by Oregon State Treasurer Ted Wheeler 503-378-4000. See also State Senator Bruce Starr 503-986-1715. For a Rainy Day Fund tied to a spending limit see the Taxpayer Association of Oregon 503-603-9009.)

Improve Budget Accountability of State Agencies
Each agency could be required to answer the following questions at the time their budget is presented: How many contracts in your department go to out of state vendors? How many “consultants” do you use and how much training time do you provide for them? On average, how many consecutive consultants are employed until a typical project reaches completion? (For more information, contact Rep. Vic Gilliam’s office at 503-986-1418.)

Create an Audit Performance Unit
HB3275 proposed by Rep. Bill Kennemer in the 2009 legislative session would have subjected all state departments, boards, commissions, institutions, and state-aided institutions and agencies to a “performance” audit. Among other things, an audit would streamline state government to reduce inefficiency and increase productivity. A similar program implemented in Clackamas County as much as doubled productivity in one department. (For more information, contact Rep. Kennemer’s office at 503-986-1439.)

Cap Biennium Increases in State Spending
Between 2005 and 2009, Oregon’s spending exploded by nearly 50 percent. The maximum overall spending increase for each budget cycle could be indexed to population growth and the consumer price index. (For more information contact the Taxpayer Association of Oregon 503-603-9009.)

Establish a Six-Year Sunset on New and Expanded Programs
The Legislature could require all state programs to be renewed or ended after six years, and bills establishing new programs or expanding existing programs could then include a six-year sunset provision. At the end of six years, each program would be re-evaluated for relevancy and overall cost-effectiveness.

Require Offsets for New Programs
Before adding new state programs, the Legislature could be required to offset their cost by eliminating older programs of equal value or by demonstrating cost-savings.

Improve Spending Transparency
The 2009 Legislature passed a measure requiring the Department of Administrative Services to publicly post state expenditures. However, descriptions of where and why money is spent are often too vague to be effectively transparent. Improved reporting guidelines need to be established, and the information available to the public should be more user-friendly. The need for improved transparency was underscored in December 2010, when a DC-based public watchdog group graded Oregon an “F” for transparency regarding economic development subsidies. As a reason for its failing grade, the report cited Oregon’s failure to significantly improve transparency after the Business Energy Tax Credit (BETC) program debacle. Past problems with programs like BETC could be avoided if taxpayers know where their money is being spent and whether it’s being spent wisely. (Contact Rep. Kim Thatcher 503-986-1425 or see Show us the Subsidies, Good Jobs First, December 2010)
Link: http://www.goodjobsfirst.org/showusthesubsidies

Reform State Purchasing Practices
To reduce the cost of operating state government, Oregon needs to take a comprehensive look at its purchasing practices across agencies. Reforming state purchasing practices has helped Pennsylvania; for example, reduced the cost of state government by $2 billion over the last eight years. Among other things, they established a competitive bidding process for office supplies and computer contracts, saving some $30 million annually. (Governor Ed Rendell, “Try Smart Shopping,” Wall Street Journal, October 13, 2010.)

Reward Employees for Saving Money
The bureaucratic culture of state agencies offers little incentive to innovate or address workplace inefficiencies. Giving back a portion of savings to agency managers or teams who provide services at a lower cost would inject the sort of innovative fuel that propels private sector companies to do more and better with less. Savings must be proven and service uncompromised.

Eliminate State Funding to the Portland Art Museum
Remove appropriation to the Portland Art Museum from February 2009 forward. The original allocation was $500,000 (House Bill 5054, 2009). Less than 2 percent of their funding is currently public.

No New Funding for CHAMP
In 2007, Governor Kulongoski created the Cultural, Heritage, Arts, Movies, Preservation, and Public Broadcasting (CHAMP) program, which the Legislature funded to the tune of $10.6 million. This money was above and beyond the base budgets of the Oregon Historical Society, Oregon Arts Commission, Cultural Trust, Oregon Public Broadcasting, the Governor’s Office of Film & Television, and the State Historic Preservation Office. In 2009, at the peak of the current recession, the Legislature approved an additional $5 million in new funding for the arts through CHAMP II. While the arts and historic preservation are important, they need not be receiving new money when Oregon’s budget and overall economy are in danger.

Reduce OPIF Funding to Pre-2009 Level – $5 Million
The Oregon Production Investment Fund (OPIF), which gives cash rebates to film producers, expanded in 2009 by 50 percent. Though the program is technically funded through private donors, taxpayers pay donors back more than their contribution through a tax credit worth 110 percent of their donation. The program’s expansion will cost Oregon $5 million in General Fund revenues this biennium.

End Profligate Subsidies for Green Energy Industry
Oregon taxpayers pay hundreds of millions of dollars each year to subsidize green energy projects. They pay and will pay more in the form of higher energy costs as Oregon’s renewable portfolio standard increasingly forces energy providers to use a larger overall percentage of renewable energy. Studies in countries with heavily subsidized green energy sectors raise serious questions about the wisdom of profligate green energy subsidies. According to a recent Spanish study, Spain’s generous subsidies for renewable energy have cost 2.2 jobs for every one job created. In Italy, for every green job created 4.8 jobs were lost in the overall economy. While green energy advocates argue that the industry has created many jobs for Oregonians, a Denmark study found that in its wind industry 90 of those “new” jobs had simply shifted from other parts of the Danish economy (For more information see Nathan Benefield and Katrina Currie, Green Jobs and the Broken Window Fallacy, Commonwealth Foundation, June 11, 2010.)
Link: http://www.commonwealthfoundation.org/research/detail/green-jobs-and-the-broken-window-fallacy

Suspend General Fund Spending on New “Autos & Aircraft” – $5.497 Million
The 2009-11 budget allocated $5.497 million in General Fund revenue for the capital purchases of “Automotive and Aircraft.” Also, consider privatizing the state motor pool by selling inventory and using private car rental services.

Transfer Funds from the State Risk Assessment Account – $13 Million
In 2009, $20.2 million was swept from this fund and the fund is projected to have an ending balance of $63.5 million at the close of the 2009-11 biennium.

Eliminate the Columbia Gorge Commission
Both state and local government have authority over the Columbia Gorge. Taxpayer funding of a third oversight entity known as the Columbia River Gorge Commission is duplicitous. Such an elimination proposal passed the Washington State House 92-6 (03/04/2010).
Link = http://apps.leg.wa.gov/billinfo/summary.aspx?bill=3132

LAND-USE

(2013 Session BILL) SB 357 – (Sen. George) Establishes policy direction for management of state forestlands, including management for timber harvesting. Directs State Board of Forestry to modify forest management plans to reflect policy direction.

(2013 Session BILL) SB 538 – (Sen. Close) Allows two or more counties to petition Land Conservation and Development Commission to establish by rule regional definitions for ‘agricultural land’ and ‘forestland’ for purposes of land use planning in proposed region.

(2013 Session BILL) SB 845 – (Sen. Starr, Sen. Beyer, Rep. Read) Authorizes Governor and Director of the Department of Land Conservation and Development to exempt certain land use decisions from appeal by contract with member of traded sector industry that agrees to acquire and develop large-site industrial use employing at least 500 full-time employees.

Improve Management of Elliott State Forest
The Oregon Constitution requires that Common School Trust Lands be managed for maximum revenue over the long term in order to support K-12 schools. In 1992, Oregon Attorney General Charles Crookham reviewed this mandate and wrote, “Non-economic factors may be considered only if they do not adversely affect the potential financial contribution to the Common School Fund.” A large portion (85,000 acres) of the Elliott State Forest is managed by the State Land Board as Common School Fund lands. As trustee, the State Land Board has a fiduciary responsibility to act solely in the interest of the Oregon K–12 schools who are beneficiaries of this Fund. Department of State Lands management of the Elliott State Forest yields returns of less than 1 percent. Even “risk free” investments, such as U.S. Treasuries, yield higher returns than the state is earning under its management of Elliott. A superior alternative is to sell or lease the forest assets and place the proceeds under the management of the Oregon Investment Council. Even accounting for potentially wild swings in investment returns, this alternative would provide four to eight times as much funding to Oregon schools than current management of the forest provides. (For more information contact Cascade Policy Institute at http://www.cascadepolicy.org.)

Increase Forest Thinning
In Oregon, nearly 13 million acres of federal forests face the threat of catastrophic fire unless they are thinned. An aggressive forest health program would bring enormous benefits to many rural communities. Increased thinning would create 2,500 jobs for every 250,000 acres treated. There would be reduced catastrophic fire risk and improved ecological health. Finally, millions would be saved in firefighting costs. (For more information see Oregon Business Plan)
Link = http://www.oregonbusinessplan.org/pdf/2008%20OBP%20POLICY%20PLAYBOOK,%20INITIATIVE%20AND%20CLUSTER%20GUIDE-FINAL.pdf)

Regionalize the Land Conservation and Development Commission (LCDC)
Under legislation proposed last session (H.B. 3054) by Rep. Bill Garrard, the LCDC would divide Oregon into nine regions. With regionalization, local economic development decisions would be made more quickly and geared toward creating jobs, which would result in higher local and state revenues. (For more information, contact Rep. Bill Garrard’s office at 503-986-1456.)

Sell Surplus Real Estate
Oregon’s state and local governments hold a very substantial amount of real estate that is presently unused and for which there is no near term plan for its use. Disposing of government surplus property would increase the amount of property on the tax rolls and reduce the overall tax burden for all property owners. It stands to mathematical reason that the same level of revenue could be produced at lower property tax rates. Additionally, by disposing of surplus property, public entities could reduce their maintenance costs; these savings could also be returned to taxpayers. The initial task of identifying and cataloging surplus government property is likely to be a major task. However, once the original task is complete, the monitoring and updating of the database should not require significant amounts of funding or time. (For more information see Cascade Policy Institute at cascadepolicy.org or call 503-242-0900)
Link =http://www.cascadepolicy.org/bgc/surplus.htm

Stop State Land Purchases
Enact a moratorium on the purchase of new state lands which also require ongoing taxpayer-funded maintenance. Many states have cut back significantly on new land purchases during the economic downturn. In early 2010, New York’s governor even imposed an indefinite moratorium on new land purchases due to budget pressures and economic uncertainty. (For more information, contact the office of Rep. John Huffman 503-986-1459.)

Establish an Office of Rural Sustainability
A healthy rural economy is vital to Oregon’s recovery, and its long-term economic viability should be given a higher priority—similar to the priority given to urban economic development. An Office of Rural Sustainability could be created and strategically located in a rural area, but employ a “special assistant” working within the Governor’s office who will provide a high-level representative exclusively devoted to rural issues. Among other things, the special assistant could help bring together disparate parties and interests on sensitive environmental, development, and resource allocation issues. The position would also provide full-time staff support for critical job creation and economic development important to rural communities. (Paul Koch www.paulkochconsulting.com)

LABOR REFORM IDEAS

Cut Middle Management
Save $71 million by cutting the number of managers. Oregon state government has a history of high ratios of managers per workers. (Source: SEIU Local 503 budget roadmap)
Link = http://www.seiu503.org/Roadmap_to_a_Better_Way.aspx

Reform Prevailing Wage Laws
Prevailing wage law mandates that are impacting the ability of community volunteers to donate time or materials could be revised to provide greater clarity and opportunity for citizens to improve their communities (League of Oregon Cities). Prevailing wage is bad economic policy. Without wage competition, contract prices cannot be driven down, resulting in a higher price for taxpayers. At a time when taxpayers are demanding more a efficient government, the prevailing wage law stymies any chance of reducing construction costs on public projects. Numerous studies of prevailing wages—32 states have such laws—conclude that the laws enforcing them add to the final price tag of public projects. A law that mandates excessive costs should be scrapped (Evergreen Freedom Foundation).
Link = http://www.orcities.org/LinkClick.aspx?link=Headlines%2fCity-State+Task+Force+Report+web-FINAL-12-28-09.pdf&tabid=798&mid=1588&language=en-US
Link = http://www.effwa.org/

Implement a “Bid to Goal” Program to Increase Efficiency
Under this program, a third-party consultant submits a realistic and competitive “mock bid” based on private sector rates for the services provided by the department. The mock bid is presented to the unions that oversee labor in the agency, who then team up with city management to create a plan that meets or exceeds the savings and service of the mock bid. If the union is unable to make such an offer, the city is free to seek offers from the private sector. In San Diego, where it was implemented in 2003, the Bid to Goal program has wildly exceeded expectation, saving almost $100 million already. Furthermore, the bid process has required union officials to work closely with city management, resulting in fewer labor problems and a much better working relationship between management and labor. In fact, union officials report that labor grievances are down by 75 percent. The Bid to Goal program is easy to replicate in other areas, requiring only a credible third-party consultant to draw up reliable mock bids. It is much less contentious for stakeholders than full privatization, and much more efficient than unexamined government provision of services. The International City/County Association has identified Bid to Goal as a nationwide leader in sensitive privatization efforts. (For more information see Public Contract Operations, Ash Institute for Democratic Governance and Innovation, John F. Kennedy School of Government, Harvard University.)
Link = http://www.innovations.harvard.edu/awards.html?id=53311

Reform the Public Contracting Process
(From 2011 Session ) HB 3488 would reduce costs and barriers incurred by agencies pursuing contracts for state projects. Among other things, the bill would raise the threshold required for a cost analysis from $250,000 to $2 million. Additionally, HB 3488 would eliminate a provision that prevents public contracts from being awarded to less expensive contractors whose savings are the result of paying lower wages. (For more information, contact Rep. Gene Whisnant’s office at 503-986-1453.)

Agency Knowledge Management
In light of Oregon staffing cuts, maintaining knowledge is key to preserving and increasing government efficiency. Virginia is a good example of how this can be done. Two state-mandated workforce reductions in the mid-1990’s hit the Virginia Department of Transportation (VDOT). VDOT was compelled to cut 20 percent of total staff in less than five years, experiencing a considerable loss of productivity and efficiency as a result. To combat this, VDOT created a Knowledge Management Division (KM). Members meet either in-person or via electronic meeting rooms where they share lessons learned and impart best practices which are then chronicled and placed in a repository on the agency Intranet, making them accessible to all VDOT staff. KM was tasked with ensuring that lessons are captured, best practices transferred, and networks established to preserve institutional memory for the benefit of all VDOT employees. Based on conservative estimates of time saved and costs avoided for VDOT compared to the annual cost of funding the knowledge management effort, the KM Division has provided a return on investment of at least 250 percent while developing effective processes for capturing and transferring critical information through employee knowledge networks. A $1.4 million cost savings—the result of resource sharing which negate the need to hire external contractors and consultants—is one example of a cost-avoidance enabled by the KM systems (VDOT Knowledge Management Toolkit, Ash Institute for Democratic Governance and Innovation, John F. Kennedy School of Government, Harvard University).
Link = http://www.innovations.harvard.edu/cache/documents/11767/1176770.pdf

Adopt a “Right-to-Work” Law
Oregon is one of 22 states with no “right-to-work” law. A right-to-work law prohibits collective bargaining agreements from requiring employees to support or belong to a union as a condition of employment. According to the Mackinac Center’s “The Economic Effects of Right-to-Work Laws: 2007,” the economies of right-to-work states grew by an average of 3.4 percent from 2001 to 2006, compared to 2.6 percent for non-right-to-work states. Jobs grew by 1.2 percent annually in right-to-work states, compared to 0.6 percent for non-right-to-work states.

Require Mandatory Furloughs for State Workers in Budgetary Uncertainty
In August 2010, California Governor Arnold Schwarzenegger required 150,000 state employees to take three unpaid days of leave per month until the state could prove that its budget obligations could be met through the end of the fiscal year. The prospect of mandatory furloughs is one way to encourage workers to think about cost-savings and efficiency. (California’s Furlough Fridays are Back, CNNMoney.com, August 20, 2010).
Link = http://money.cnn.com/2010/08/20/news/economy/california_furlough.cnnw/index.htm

Suspend Annual Cost of Living Adjustments for State Workers
As the recent budget deficit has shown, Oregon government is not sustainable at its current levels. Workers will have to be laid off. When you are firing workers, how can it make sense to increase the wages of all your other workers? This creates an imbalanced pay model.

Align State Compensation with Private Sector Compensation – $65 Million
Public employee compensation significantly determines the level of state spending. Historically, state employees have accepted lower salaries than their private sector counterparts in exchange for benefits. The result, however, is not always a lower cost to taxpayers. In fact, Oregon’s Legislative Fiscal Office estimates that 25 percent of state employees have higher total compensation than comparative private sector employees. Of those, five percent enjoy total compensation packages that ar e 20 percent higher than those in comparable private sector jobs. Moreover, Governor’s Reset Cabinet projects that total compensation increases for state employees will soon outpace increases in the private sector. Oregon should consider taking a “total compensation” approach, aligning total compensation for state employees with the private sector (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge its Economy, Americans for Prosperity & Cascade Policy Institute, October 2010)
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality/

Set Employee Compensation Limits
Oregon’s governor makes $93,600 annually (2010). An employee compensation limit for public officers and employees paid from the General Fund can be established in direct relation to the governor’s salary. For example, Minnesota, with the exception of higher education, currently limits executive agency heads from earning more than 95 percent of the governor’s salary. No employee may earn more than his/her agency head.

Freeze New State Hires
Place a hiring freeze on all new, non-critical state hiring, potentially saving taxpayers millions of dollars. To help get its budget under control, Virginia’s state legislature gave its governor authority to order such a freeze. Together with reductions in full-time positions, Virginia’s hiring freeze will trim the state budget by $20 million a year. (Governor Bob McDonnell, “Ever-Higher Budgets Can’t Be the Norm”, Wall Street Journal, October 13, 2010).

Offer a Cafeteria-Style Benefit Plan for State Employees
Private companies and other states have been moving to cafeteria-style benefit plans that give employees more freedom to choose which benefits they wish to purchase. Indiana, for example, has a cafeteria-style plan that has become the choice of 70 percent of state employees and has resulted in savings for employees and the state. (Dennis Thompson, Jr. “Next Governor Will Target State Labor Costs,” Statesman-Journal, October 22, 2010)

Link Minimum Wage Rates to Unemployment
Next to Washington, Oregon has the highest state minimum wage rate in the country. Oregon’s rate will increase by ten cents to $8.50 an hour this year, putting further downward pressure on an already depressed job market. Unfortunately, an approved ballot initiative in 2002 narrowly linked future minimum wage rates to inflation as reflected in the consumer price index. The Legislature could adjust the calculation to account for unemployment rates and the health of the overall economy (Brent Hunsberger, “Oregon’s Minimum Wage to Increase 10 Cents in 2011,” The Oregonian, September 20, 2010).
Link = http://www.oregonlive.com/business/index.ssf/2010/09/oregons_minimum_wage_to_increa.html

Conduct an FTE-Based Agency Audit
Audit every agency to determine how many full-time equivalent positions each agency has on the books that have not been filled for a specified number of quarters or years. Agencies would receive funding for actual employees only. (For more information, contact the office of Rep. John Huffman 503-986-1459.)

Reduce the Number of State Positions
As state revenues shrink, the state workforce continues to balloon—up more than 7 percent since 2005. Despite the fact that his own Reset Cabinet estimated that three out every four General Fund dollars goes to payroll expenses and related benefits, former Governor Kulongoski hired more than 2000 new state workers in 2010. The new governor could set a clear goal for reducing the overall state workforce over the next two biennia. Workforce reduction goals have been tried in other states with good success. (The Oregonian, Can Oregon downsize state government?, Aug, 2010,)
Link = http://www.oregonlive.com/politics/index.ssf/2010/08/can_oregon_downsize_state_gove.html

EDUCATION IDEAS

Give Oregon Universities More Independence
Members of the State Board of Higher Education and presidents of the state’s seven universities want to see the system gain the independence that community colleges enjoy with control over tuition, personnel, health benefits, purchasing, bonding, and other operations. Such a change would enable universities to save millions of dollars and give them more options to raise money, possibly even with taxing authority. The university system also would save money—$12 million for health insurance alone—by not having to participate in state benefit and property and liability insurance plans, all of which it can purchase for less on its own. (as reported by The Oregonian)
Link = http://www.oregonlive.com/news/index.ssf/2010/05/higher_education_leaders_want.html

Manage Higher Education Subsidies Based on Performance
Demand greater results for state dollars and shift from funding enrollments to funding degree attainment. The dominant mode of funding for colleges is based on enrollment and fails to create an incentive to ensure students complete degrees or certificates. Several states—including Florida, Indiana, Ohio, Texas, and Washington—are proposing or have proposed basing a portion of their funding on course and degree completion. When Ohio started funding schools based on their ability to graduate students, the median time-to-degree went from 4.7 years in 1999 to 4.3 years in 2003, holding steady through 2007. Florida community colleges increased degree completion by 43 percent from 1996 to 2007 using a similar approach. England goes even further. The U.K. distributes public funds to universities based on how well they fulfill national goals of improving quality, expanding access, enhancing research, and contributing to the economy. Although this is a national system, it may serve as a good model for states interested in restructuring their funding processes (The Big Reset, National Governor’s Association). This also helps deal with the “perpetual” student problem.
Link = http://www.nga.org/Files/pdf/1002STATEGOVTAFTERGREATRECESSION.PDF

Establish New Leaders for New Schools
Research clearly shows the direct relationship between leadership and student achievement: great schools are led by great principals. With this lesson in mind, New Leaders for New Schools was launched in 2000 in partnership with the Chicago Public Schools. Preliminary findings from a RAND Corporation study indicate that students in elementary and middle schools led by New Leaders principals for at least three years are academically outpacing their peers by statistically significant margins. Other indicators also demonstrate the program’s success. In 2009, New Leaders principals were twice as likely as other principals to oversee twenty-plus point gains in student proficiency scores in their schools. And, in 2007, students in high schools led by New Leaders graduated at a rate of 76 percent compared to an average of 58 percent for the rest of their districts (New Leaders for New Schools at www.nlns.org).

Move Funding to Students Rather than Institutions
There is considerable evidence that when states give money to universities, they use a large portion of the funds for purposes other than those that the policymakers assume the funds will promote. In a model where tuition levels are relatively high but where the state provides financial assistance in the form of vouchers or scholarships to students, schools are likely to be far more student oriented. The bias in favor of research and against teaching which prevails in most four-year universities is likely to be modestly reduced. Schools that are tuition driven will try harder to please their clientele—or lose revenues to competitors. Vouchers can be tailored to meet social objectives. They can be made progressive, as once proposed by Robert Reich. Students from higher income families would receive small or even no vouchers, whereas those from low income families would receive generous scholarships that would lower the cost of college tuition levels at or lower than under the current system. Done appropriately, the progressive voucher approach can lower state outlays for higher education while expanding student access. Vouchers can also be made performance-based. They can be cut off after four years of full-time study—providing enormous incentives for students to finish school in a timely fashion. They can be enhanced for superior academic performance. Student subsidies can be made proportionate to the expected gains the students are receiving from the education (Andrew Gillen and Richard Vedder, Higher Education in Washington: An External Assessment, Center for College Affordability and Productivity, Evergreen Freedom Foundation)
Link = http://www.effwa.org/files/pdf/Higher.pdf

Provide Incentives to Both Students and Institutions for Timely Degree Completion
Institutional subsidies could be cut off for all students with greater than four-year attendance. At the state level, subsidies could be withdrawn for Ph.D. candidates after no more than four years. Charging higher tuition for fifth or sixth year students is another option—these students tend to take large numbers of more costly advanced classes (Andrew Gillen and Richard Vedder, Higher Education in Washington: An External Assessment, Center for College Affordability and Productivity, Evergreen Freedom Foundation).
Link = http://www.effwa.org/files/pdf/Higher.pdf

Reform Funding for Educational Services
The current system in which schools receive pre-funded services exclusively through their Educational Service District (ESD) is not cost-effective. Instead of ESDs and school districts splitting education funds, school districts could receive all the funding with the option of shopping outside of their assigned ESDs for the most cost-effective services.

Establish Universal “Shared Services” for School Districts – $47 Million Annually
Oregon has 197 school districts responsible for educating on average less than 1,000 students. A shared service model of governance in which school districts share certain services provided through their ESD improves efficiency and cuts staff, technology, and a myriad of administrative costs. Current law can be tightened to ensure ESDs provide standard consolidated services and to require school districts to participate in a service plan that clearly outlines which services they must consolidate. The Governor’s Reset Cabinet recommended developing and implementing a shared service model with all school districts participating by 2012. (For more information, see former Governor Kulongoski’s 2010 Reset Recommendations)

Allow and Encourage a Private-Practice Option for Educators
Across the state, schools and communities are looking at new ways of delivering education to students. One option Oregon schools may wish to explore is contracting with a private-practice teacher for instruction. Private-practice teachers are professional educators who provide their services to schools, or other entities, on a limited contract basis. Contracting with a private-practice educator can help school administrators strengthen accountability, cut costs, and increase flexibility. Using contracting, schools can also take advantage of outside expertise and innovation. (For more information, see Janet R. Beales, A Private-Practice Option for Educators.)
Link = http://www.cascadepolicy.org/bgc/teach.htm

Provide Tax Credits for Less Expensive, Non-Public Education
Oregon public schools spend an average of $10,200 annually per student. By contrast, Oregon K-12 private schools spend roughly $7,200 annually per student. The math is simple: Private schools save taxpayers money—particularly since private school families still pay for the public education their children don’t receive. During economic downturns, many families who historically enroll their children in private schools may turn to public education, which increases the cost to taxpayers. New Jersey, for instance, reported that private school families recently turning to public education costs that state $430 million annually. (For more information see Cascade Policy Institute 503-242-0900 and cascadepolicy.org.) In the short term, providing a modest $1000 per child tax credit to families who pursue non-public education for their children could potentially stem the natural tide of historically private-school families enrolling in public schools during economic difficulty. Long-term, it could drive down overall public education costs. More children are enrolled outside the public school system, and the competitive pressure could encourage greater efficiency and higher quality of both public and private schools. (Christine Martin, Education Tax Credits Can Save Oregon Money, Cascade Policy Institute, March 24, 2009; Jeanette Lundquist, “Gov. Christie’s Report Finds Private, Parochial Schools Save N.J. $2.7B Annually”, Newark Star-Ledger, July 20, 2010)
Link = http://www.cascadepolicy.org/2009/03/24/education-tax-credits-can-save-oregon-money/
Link = http://www.nj.com/news/index.ssf/2010/07/gov_christies_report_finds_pri.html

 

PUBLIC PENSION REFORM

(2013 Session Bill) SB 754 – (Sen. Knopp, Rep. Sprenger, Oregon School Boards Assn) Modifies provisions relating to public employee retirement. Directs Public Employees Retirement Board to recalculate employer contribution rates to reflect savings attributable to Act. Provides for expedited review by Supreme Court upon petition by adversely affected party.

(2013 Session Bill) HB 2784 – (Rep. Whisnant) Directs Public Employees Retirement Board to calculate or recalculate retirement benefits of member of Public Employees Retirement System if member is convicted of certain work-related felonies.

(2013 Session Bill) HB 3056 – (Rep. Hanna) Eliminates use of accumulated unused vacation leave and unused sick leave in computation of final average salary for purposes of determining retirement benefit of member of Public Employees Retirement System.

(2013 Session Bill) HB 3057 – (Rep. Hanna) Limits cost-of-living adjustment under Public Employees Retirement System to first $3,000 of monthly benefits.

(2013 Session Bill) HB 3058 – (Rep. Hanna) Eliminates employer pick-up of six percent employee contribution required of members of individual account program of Public Employees Retirement System as of July 1, 2020.

(2013 Session Bill) HB 3059 – (Rep. Hanna) Prohibits Public Employees Retirement Board from paying increased retirement benefits resulting from state income taxation of payments made by board if person receiving payments does not pay Oregon income tax on benefits.

(2013 Session Bill) HB 3148 (Comm. On Business & Labor) Modifies law providing increased retirement benefits to members of Public Employees Retirement System in compensation for income taxation of retirement benefits.

(2013 Session Bill) HB 3202 (Rep. Conger) Limits cost-of-living adjustment under Public Employees Retirement System to first $2,000 of monthly benefits.

(2013 Session Bill) HB 3203 (Rep. Conger) Requires Public Employees Retirement Board to establish rate of return for crediting member accounts. Note: current 8 percent annual return guarantee would be eliminated.

(2013 Session Bill) HB 3204 (Rep. Conger) Limits total retirement benefit payable under Public Employees Retirement System to 100 percent of final average salary.

(2013 Session Bill) HB 3206 (Rep. Conger) Provides that Tier 1 and Tier 2 members cease to be members of individual account program on effective date of Act.

(2013 Session Bill) HB 3207 (Rep. Conger) Directs Public Employees Retirement Board to recalculate required employer contributions to reflect savings from legislation relating to public employee retirement enacted by Legislative Assembly during 2013 regular session.

(2013 Session Bill) HB 3209 (Rep. Conger) Prohibits Public Employees Retirement Board from using assumed interest rate of more than six percent in determining amount of annuity for money match calculation of retirement benefits.

(2013 Session Bill) HB 3312 (Rep. Sprenger) Requires member of Public Employees Retirement System to contribute ___ percent of salary to benefit funding account.

(2013 Session Bill) HB 3313 (Rep. Sprenger) Changes definition of “qualifying position” for purposes of public employee retirement benefits to require employee to work at least 1040 hours in calendar year.

(2013 Session Bill) HB 3351 (Rep. Johnson) Removes exceptions that allow retired member of Public Employees Retirement System to be reemployed by public employer and continue to receive pension payments.

(2013 Session Bill) HB 3329 (Rep. Parrish) Prohibits public employer from agreeing to pay or provide retirement benefit to member of Public Employees Retirement System other than payments required or provided for in statutes governing retirement benefits of members of system.

(2013 Session Bill) HB 3444 (Rep. Cameron) Provides that if public body agrees to pay or provide benefit to retired employees other than payments required or provided for in statutes, public body must create separate account for funding of those benefits and make annual contributions to account in amounts necessary to amortize liability for benefits in 25 years or less.

(2013 Session Bill) SB 445 (Sen. George) Provides that, if public body agrees to pay or provide benefit to retired employees other than payments required or provided for in statutes, public body must create separate accounts for funding of those benefits and make annual contributions to accounts in amounts necessary to amortize liability for benefits in 25 years or less.

(2013 Session Bill) SB 471 (Rep. Barker, Sen. Burdick) Prohibits Public Employees Retirement Board from paying increased retirement benefits resulting from state income taxation of payments made by board if person receiving payments does not pay Oregon income tax on benefits.

(2013 Session Bill) SB 651 (Various) Provides that person appointed or elected as member of Legislative Assembly may not become member of Public Employees Retirement System or participate in state deferred compensation plan as legislator member.

(2013 Session Bill) SB 652 (Sen. Whitsett) Eliminates employer pick-up of six percent employee contribution required of members of Public Employees Retirement System.

(2013 Session Bill) SB 653 (Sen. Whitsett) Requires that employee contribution to individual account program be percentage of salary, be not less than one percent of salary or more than six percent of salary, and be whole number.

(2013 Session Bill) SB 654 (Sen. Whitsett) Eliminates, on and after January 1, 2014, employee contributions, employer contributions and rollover contributions to individual account program of Public Employees Retirement System.

(2013 Session Bill) SB 656 (Sen. Whitsett) Directs Public Employees Retirement Board to use assumed interest rate of five percent in determining amount of annuity for money match calculation of retirement benefits.

(2013 Session Bill) SB 657 (Sen. Whitsett) Requires public employee to pay 50 percent of contributions to Public Employees Retirement System required to fund benefits.

(2013 Session Bill) SB 658 (Sen. Whitsett) Limits cost-of-living adjustments for monthly benefit payments under Public Employees Retirement System to members of system who have at least 10 years of creditable service at time member retires, becomes disabled or dies.

(2013 Session Bill) SB 659 (Sen. Whitsett) Limits cost-of-living adjustment under Public Employees Retirement System to first $2,000 of monthly benefits.

(2013 Session Bill) SB 660 (Sen. Whitsett) Eliminates use of accumulated unused vacation leave and unused sick leave in computation of final average salary for purposes of determining retirement benefit of member of Public Employees Retirement System.

(2013 Session Bill) SB 661 (Sen. Whitsett) Provides that certain persons hired by participating public employer on or after January 1, 2014, may not become members of pension program of Oregon Public Service Retirement Plan.

(2013 Session Bill) SB 662 (Sen. Whitsett) Permits employer to pay all or part of employee contribution to individual account program of Public Employees Retirement System.

(2013 Session Bill) SB 663 (Sen. Whitsett) Increases normal retirement age for active and inactive members of Oregon Public Service Retirement Plan.

(2013 Session Bill) SB 664 (Sen. Whitsett) Modifies calculation of final average salary for members of Oregon Public Service Retirement Plan.

(2013 Session Bill) SB 674 (Sen. Whitsett) Prohibits members of Legislative Assembly, judges and statewide elected officials from becoming members of Public Employees Retirement System or acquiring credit under system.

(2013 Session Bill) SB 738 (Sen. Ferrioli) Modifies provisions relating to public employee retirement.

(2013 Session Bill) SB 748 (Sen. Knopp) Modifies provisions relating to Public Employees Retirement System and collective bargaining by public employees.

(2013 Session Bill) SB 751 (Sen. Knopp) Establishes Fair Retirement Plan for persons hired on or after July 1, 2013, who have not established membership in Public Employees Retirement System before July 1, 2013.

(2013 Session Bill) SB 754 (Sen. Knopp, Rep. Sprenger) Modifies provisions relating to public employee retirement.

(2013 Session Bill) SB 822 (Rep. Buckley, Sen. Devlin) Modifies cost-of-living adjustment under Public Employees Retirement System. $455 million (2013-15)

Alter PERS Benefit Calculation and Eligibility Rules to Lower Payments
A number of states have altered the benefit calculation to lower the annual payment to the retiree. For example, Nevada capped the last two years of salary increases that could be used to calculate benefits, and Georgia prohibited post-retirement benefit increases for newly-hired employees. Rhode Island and several other states raised the retirement age to 62. Additionally, California has passed legislation to prevent “pension spiking,” saving upwards of $100 million annually (The Big Reset, National Governor’s Association; Governor Arnold Schwarzenegger, “Pension Reform Is Key,” Wall Street Journal, October 10, 2010)
Link = http://www.nga.org/Files/pdf/1002stategovtaftergreatrecession.pdf

Move Exclusively to Defined Contribution Retirement System
Oregon’s defined benefit retirement system is too expensive and puts future generations of Oregonians on the hook for today’s promises. For years, large private sector companies have been moving away from defined benefit system towards a defined contribution system, like a 401k.

Eliminate Tax Remedy Payments for Out-of-State Retirees – $23.8 Million
To offset income taxation of PERS benefits, Oregon boosted pension payments for state workers to pick up the tab. Eliminating these “tax remedy” payments for those who relocate out-of-state would save the state millions of dollars in the next biennium—$5.9 million for state General Fund agencies and $17.9 million for schools and community colleges. (For more information, see former Governor Kulongoski’s Reset Recommendations 2010.)

HEALTH & HUMAN SERVICES

Require State Employees and Officials to Pay Same Health Care Premiums as Teachers
The average Oregon teacher contributes $187.07 per month toward their health insurance. According to the Department of Human Services, 47,054 employees receive fully paid health insurance. If each employee paid the same premiums as the average teacher, Oregon would save $211 million per biennium. (For more information see Cascade Policy Institute 503-242-0900 and cascadepolicy.org.)

Limit Funding for State Employee Health Benefits
Limit the state’s contribution to Public Employees’ Benefit Board medical and dental plans to the lowest cost plan available in a given geographic area. (For more information, see former Governor Kulongoski’s Reset Recommendations 2010.)

Remove Retirees from General Health Insurance Pool
Insurance rates for current state employees, which the state fully funds, are determined in part by the cost of insuring the overall pool of people covered under Oregon’s Public Employee’s Benefit Board (PEBB). The system is currently structured to include past employees who retire prior to Medicare eligibility. These employees, on average, will have greater medical needs and are therefore more expensive to insure. Even though these retirees pay the full cost of their own insurance and are charged a monthly premium, the fact that they are considered part of the general insurance pool drives up the overall cost of insuring Oregon’s public employees. Taking them out of the general insurance pool and placing them in an individually-funded pool of their own will help drive down health care costs for current employees. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge It’s Economy, Americans for Prosperity &Cascade Policy Institute, October 2010).
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality/

Require Universal Health Savings Accounts for State Employees
Used in conjunction with high deductible health plans, a Health Savings Account system could help reign in health care costs while meeting the medical needs of state employees. Indiana’s popular HSA system has reduced overall health care costs by 11 percent, saving the state a projected $20 million in 2010. (Governor Mitch Daniel, “Hoosiers and Health Savings Accounts,” Wall Street Journal, March 1, 2010; Thomas Cheplick, “Indiana Government Workers, Taxpayers Saving Big Through HSAs,” Health Care News, May 2010)
Link = http://www.heartland.org/healthpolicy-news.org/article/27312/Indiana_Government_Workers_Taxpayers_Saving_Big_Through_HSAs.html

Introduce Medicaid Health Opportunity Accounts
Health Opportunity Accounts for Medicaid recipients work similar to Health Savings Accounts. Eligible beneficiaries are given an account with an annual dollar amount to be used on medical care. The program injects market forces into the Medicaid system, gives participants more choice, and reduces administrative costs for states. Still in its experimental stages, HOA’s have been pursued in several states as a potential way to get Medicaid costs under control. (For more information see Cascade Policy Institute 503-242-0900 and cascadepolicy.org)

Implement a Florida-Style Medicaid Reform
In 2005, Florida implemented a cost-effective Medicaid reform program that has become widely popular among beneficiaries. Among other things, the program has created a marketplace in which private companies offer diverse and competitive benefits packages tailored to specific needs. It also empowers voluntary, informed decisions about personal medical care and rewards healthy lifestyle choices. (2010 Guide to Health Care Solutions, American Legislative Exchange Council)
Link=http://www.alec.org/AM/Template.cfm?Section=2010_Guide_to_Health_Insurance_Solutions&Template=/CM/HTMLDisplay.cfm&ContentID=12977

Set Stricter Time Limits for TANF Adult Beneficiaries and Reduce Maximum Benefit
Several states have adopted stricter time limits for adults on Temporary Assistance for Needy Families (TANF) than the federally required limit of five years total. Idaho, for instance, cuts off funding for adults after two years and offers a maximum benefit of $309 per month. By contrast, Oregon families of three can receive as much as $528 per month for as long as five total years.
Link = http://www.oregonlive.com/politics/index.ssf/2010/09/hard_choices_something_must_gi.html

Encourage List Billing for Health Premiums
List billing allows individuals to have their employers deduct their health insurance premium from their paychecks, sending the money straight to the insurance company. It makes purchasing health insurance easier and potentially makes coverage more affordable. (2010 Guide to Health Care Solutions, American Legislative Exchange Council).
Link=http://www.alec.org/AM/Template.cfm?Section=2010_Guide_to_Health_Insurance_Solutions&Template=/CM/HTMLDisplay.cfm&ContentID=12977

Create Position of Inspector General for Department of Human Services (DHS)
Establish an Inspector General within DHS to investigate waste, fraud, and abuse, as well as identify process, administrative, and programmatic improvements.

Initiate Department of Human Services Appraisal
Establish a commission to conduct a comparative analysis of all 50 states’ human services departments to learn best practices and determine how well Oregon’s systems and programs line up on select goals such as drop-out rates, number of youth in foster care, teen pregnancies, and per-client costs. The appraisal would also include an assessment of the costs and benefits of providing a common information management system across the department. (See former Governor Kulongoski’s Reset Recommendations 2010)

Advocate purchasing of health care plans across state lines
Oregon could work with other states to change the policies that prohibit the purchasing of health plan across state lines. The more choices a consumer has the more quality low cost solutions they will have.

GENERAL GOVERNMENT IDEAS

(2013 Session BILL) SB 710 – (Sen. Boquist) Modifies definition of “public employee.” Provides that person providing services under time-limited contract with certain public employers is not public employee.

(2013 Session BILL) SB 712 – (Sen. Boquist) Establishes Oregon In-State Loan Fund. Specifies purposes and contents of fund. Directs Oregon Growth Board to manage fund. Allows board to purchase, hold or sell certain loans or participation interests in loans. Establishes January 1, 2014, operative date.

(2013 Session BILL) SB 734 – (Numerous) Classifies certain waters of Columbia River to be used for specific purposes. Reserves specified amount of Columbia River natural flows for in-state use and classifies for specific purposes. Declares management policy for Columbia River. Imposes duties and restrictions on state agencies and public corporations regarding granting and regulation of water use in Columbia River and tributaries. Grants Water Resources Commission rulemaking authority.

(2013 Session BILL) SB 819 – (Numerous) Removes minimum requirements for cost and employment terms for qualifying investment contract. Provides that Governor and Director of Department of Revenue shall negotiate minimum requirements of contract with taxpayer.Removes deadline for entering into qualified investment contracts.

Change Oregon’s Bureaucratic Culture through Charter Agencies
Charter agencies agree to be accountable for measurable results while contributing to the budget fix. In exchange, they are granted increased authority and more autonomy from bureaucratic regulations. Since 2003, the Department of Management of the State of Iowa has been experimenting with the Charter Agency Program, a unique model aimed at improving government. The main goal is for government agencies to enhance their efficiency in exchange for flexibility and authority. The results have been stunning. In the first year alone, the six charter agencies surpassed their collective savings goal by more than $7 million. The projected savings rate for 2006 nearly doubled that, at $40 million. The fiscal savings that charter agencies bring in are not the only benefit, nor even the main one. The Department of Human Services, one of the agencies that opted into the charter program, oversaw a 33 percent increase in the number of low-income children that have access to health care coverage via its hawk-I program. They also increased the number of eligible Iowans receiving food and nutrition benefits by 69,000 (a 44 percent increase) in two years. The Department of Natural Resources, another charter agency, reduced turnaround time for air quality construction permits from 62 to 6 days and eliminated a backlog of 600 permits in six months. (A Tale of Two Deals, Ash Institute for Democratic Governance and Innovation, John F. Kennedy School of Government, Harvard University)
Link = http://www.innovations.harvard.edu/cache/documents/142/14232.pdf

Increase Local Control of Community Colleges
Allow community colleges to make their own program decisions based on local need, and end the requirement for “petitioning” the state for program approvals. This will save time and money. (Paul Koch at www.paulkochconsulting.com)

Improve Agency Organization and Efficiency
The Department of Human Services (DHS) has embarked on a plan to save over $500 million. The plan, called the Transformation Roadmap, has already saved $53 million and DHS can be encouraged to speed up the process. Full implementation of the Transformation Roadmap is expected to bring targeted biannual savings between $269 and $408 million, according to a DHS-adjusted figure based on recent analysis of the Transformation Roadmap. Based on its success, other state agencies could launch similar programs.

Eliminate Duplicate Funding for the Bureau of Labor and Industries – $1 Million
Remove duplicate appropriation from the Bureau of Labor and Industries that was given to the Commissioner’s Office, the Civil Rights Division, the Wage and Hour Division and Apprenticeship and Training. House Bill 5024, from 2009 Legislative Session, originally eliminated the funding. This money is in addition to the $642,861 appropriated to the Department of Justice for Civil Rights work.

Privatize Waste Water System
Oregon currently has over $400 million in waste water needs without the means to make sufficient repairs and improvements. Many local communities are now holders of these unaffordable waste water plants and must foot the bill for expensive solutions. Through public private partnerships, communities and the state could avoid incurring new debt to maintain the system, and competent local government employees could transition to the private sector. Oregon companies currently have the equipment and resources to manage waste water systems in communities for a fraction of the current costs. They would utilize technology to convert waste into bio fuels and fertilizer for sale. Privatization would free cities to focus on more important matters and enable the private sector to strengthen the economic viability of local communities. Additionally, rates would be more carefully controlled and driven less by the costs of over-engineered projects. (Paul Koch www.paulkochconsulting.com)

Creating Cross Agency Collaboration: DAS Duplication
The Department of Administrative Services helps reduce staff through the “Shared Client Services” program where smaller agencies can share administrative staff. The areas to share across smaller agencies are payroll, accounting budget development and procurement. This could save $2 million a year. (SEIU Local 503 Budget Roadmap)
Link = http://www.seiu503.org/Roadmap_to_a_Better_Way.aspx

Create a Privatization Task Force
Form a task force to study, assess, and make recommendations for providing state programs and services through public contracts with private contractors.

Get Government Out of the Liquor Business
The Oregon Liquor Control Commission was created in 1933 by a special session of the Legislature after national prohibition ended. Oregon is a control state with the exclusive right to sell packaged distilled spirits, which are dispersed statewide from a distribution center in Portland and sold in 242 retail liquor stores operated by contracted agents. There is no compelling reason for the state to be in the liquor business. Selling alcohol is not a core function of government. Under the guise of moderating excess consumption, the state has entrenched an unnecessary and costly bureaucracy. It’s also problematic when the behavior the state is trying to limit also provides a sacred revenue source. Currently, 32 states are classified as “non-controlled,” meaning they have ceded their liquor operations to the private sector on a license basis. A 1994 report by the Oregon Retail Liquor Association found that “Oregon taxpayers could save an estimated $100,000,000 initially and $60,000,000 each biennium thereafter if the state government removed itself from the wholesale and retail liquor business. The report also outlined a controlled privatization plan to achieve that savings. (Reo Clark, Joe DeLillo, Bruce Hochstein, Tom “Tiny” Matthews, Controlled Privatization: Progressive Alcohol Management for Oregon, The Oregon Retail Liquor Association, 1994; Hans A. Zeiger, Liquor Control Board: A Case for the State Giving Up the booze Business, Evergreen Freedom Foundation, October 4, 2002. See also, Don McIntire of the Taxpayer Association of Oregon 503-603-9009.)
Link = http://www.cascadepolicy.org/bgc/orla.htm
Link = http://www.effwa.org/inbriefs/v12_n2.php

Get Government out of the Horse Racing Business
The 2009-11 budget for the Oregon Racing Commission is $6,114,165. The Oregon Racing Commission was established in 1933 as part of the Pari-Mutuel Wagering Act. The Mission of the Oregon Racing Commission is to regulate and to facilitate all aspects of the pari-mutuel industry. Horse and dog racing is not a core function of government and frankly is not something taxpayers should be forced to pay for. The private sector needs to support and facilitate its own races.

Get Government out of the Fair Business
The Oregon State Fair is not a core function of government. Legislators and the governor could transfer the money the State Fair receives to the core functions of government. Looking ahead, lawmakers could not eliminate these subsidies, but could sell the 185-acre fairgrounds and Expo Center. Private owners should have the opportunity to either run the State Fair at a profit, or use the property for other purposes.

Get Government out of the Printing Business
The entire office of Publishing and Distributing Services can be privatized, and jobs then would be outsourced to private printing firms. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge Its Economy, Americans for Prosperity & Cascade Policy Institute, October 2010)
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality

Get Government out of the Job Placement Business
Allow private “job search” firms to contract with the state to provide job placement services currently provided by Oregon’s Employment Department. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge Its Economy, Americans for Prosperity & Cascade Policy Institute, October 2010).
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality

Privatize Vehicle Fleet Maintenance
Virginia’s Department of General Services (DGS) first opened vehicle fleet maintenance to private competition in the late 1990s, lowering costs by approximately 25 percent. In 2005, DGS contracted out for a new maintenance information management system that provides 24 hour, on call service and networks for nearly 500 private maintenance facilities (and 77 state facilities) to provide vehicle repairs. The management system reduced preventive maintenance costs by 16 percent, reduced average brake service costs from $228 to $81, and significantly reduced vehicle downtime. (For more information, see The New Jersey Privatization Task Force Report to Governor Chris Christie, May 2010.)
Link = http://www.nj.gov/governor/news/reports/pdf/2010709_NJ_Privatization_Task_Force_Final_Re

Privatize Vehicle Registration and Emissions Inspections
The cost of Oregon’s web of 70 Department of Motor Vehicle (DMV) offices and seven emissions inspections facilities could be eliminated if registration and emissions inspections were handed off to automobile associations, co-operatives, insurance companies, vehicle manufacturers, and other private and not-for-profit organizations. Other states, including California, allow private entities to perform these basic services. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge Its Economy, Americans for Prosperity & Cascade Policy Institute, October 2010)
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality

Privatize Road Construction Projects
User fee programs whereby a private contractor is permitted to charge a toll in exchange for incurring up-front construction and ongoing maintenance costs have operated for years in the Eastern United States. Oregon could pursue similar options to reduce the cost of state transportation projects. The Newberg-Dundee bypass in Yamhill County is a prime candidate for privatization. If a private contractor were allowed to construct the bypass as a toll road, the state’s cost of construction would be significantly reduced. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge Its Economy, Americans for Prosperity & Cascade Policy Institute, October 2010)
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality

Private-Public Prison Options
Private prisons are nothing new. Since 1984, many states have successfully implemented competitive contracting programs. In a December 2007 study by the Vanderbilt Institute for Public Policy Studies, evidence indicates that states can save a substantial amount of money if they use a shared system of both privately and publicly managed prisons. The research showed that during the study period (1999-2004), states were able to save up to $15 million on their yearly corrections budgets by using at least some privately managed prisons. The fundamental conclusion is that, over that six-year period, states that had some of their prisoners in privately owned or operated prisons experienced lower rates of growth in the cost of housing their public prisoners. (James F. Blumstein, “Do Government Agencies Respond to Market Pressures? Evidence from Private Prisons”, Virginia Journal of Social Policy and the Law, spring 2008)
Link = http://papers.ssrn.com/sol3/papers.cfm?abstract_id=441007

Act on List to Reduce Unnecessary Bureaucracy
Former Governor Kulongoski wrote a June 2009 letter urging lawmakers to consider eliminating, suspending, or consolidating 64 state boards, commissions, and agencies. Virtually nothing has been accomplished to that end. Lawmakers could redouble their efforts to streamline government, and Kulongoski’s recommendations are a good place to start.

Privatize Child Support Collection Services
Collection of delinquent child support payments could be ceded to private entities. Private firms could be authorized to collect not only the support payments owed, but also additional money to cover their costs. These firms could be authorized to aggressively take whatever legal means are available, including repossession of assets, to satisfy outstanding child support payments. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge It’s Economy, Americans for Prosperity & Cascade Policy Institute, October 2010)
Link = http://www.cascadepolicy.org/2010/10/13/facing-reality

Permit Corporate Sponsorships for State Parks
One alternative to raising state park user fees would allow parks to pay for themselves through corporate sponsorships. Such outside-the-box thinking is already being tried in several states. Virginia, which five years ago moved to corporate sponsorships of state parks, has raised $5 million. Others states are following suit. Though park advocates typically shy away from anything smacking of commercialization, some increasingly see corporate sponsorships, provided they’re done “tastefully”. They are seen as a viable way to raise revenue and continue providing inexpensive recreational services at a time when vacationing families are trying to cut costs. (Melissa Maynard, “This State Park Brought to You by…,” Stateline, August 17, 2010)
Link = http://www.stateline.org/live/details/story?contentId=506217

Eliminate Taxpayer-Funded Lobbyists
Agency heads, not taxpayer-funded lobbyists should present their case to the Legislature for agency programs and funding, as well as answer lawmakers’ questions. As a matter of principle and economic common sense, Oregon could eliminate all lobbying positions in state agencies and departments, as well as contracts with outside lobby firms and put that money toward frontline services.

Reduce the Business Energy Tax Credit (BETC) Program – $287 Million
BETC costs taxpayers hundreds of million annually in tax credits for companies investing in energy conservation and renewable energy production. From the beginning, the program was ill conceived, allowing companies with no tax liabilities to receive tax credits and lacking appropriate safeguards to ensure that projects were economically viable. A classic example is Mesilla Valley Transportation, based in El Paso, Texas, and Las Cruces, N.M. Under BETC, the company received 752 separate tax credits worth $4.5 million, while creating few, if any, Oregon jobs and doing roughly one percent of its business in Oregon. Though some reforms have been made, BETC can be eliminated in favor of other funding priorities. (Facing Reality: Ideas to Reset Oregon’s Budget and Recharge It’s Economy, Americans for Prosperity & Cascade Policy Institute, October 2010; Ted Sickinger and Harry Esteve, “State Investigates Texas Trucking Company, Oregon Nonprofit over Energy Tax Credits,” The Oregonian, February 22, 2010.)
Link = http://www.oregonlive.com/politics/index.ssf/2010/02/state_investigates_texas_truck.html

Streamline the Department of Administrative Services (DAS)
As state government has grown, so too has the web of administrative bureaucracy. Originally, DAS served as the one-stop-shop for state government’s administrative needs. However, many state departments essentially have their own smaller version of DAS, which has led to a duplication of services and other inefficiencies. State government could take a critical look at DAS and recommend duplicative or otherwise unnecessary services for the budget chopping block. (For more information, contact Rep. Bill Kennemer’s office at 503-986-1439.)

Stop Spending Money Advertising the Lottery
The Oregon Lottery spends about $9 million a year on advertising and marketing, including TV commercials that promote other lottery products, such as scratch-off tickets. For close to 20 years the Oregon Lottery said it wouldn’t air TV ads pushing video gambling, but recently that has changed. According to an Oregon report, there are 47,000 problem gamblers in the state and their average debt is around $30,000 each. For two-thirds of them their game of choice is video poker (KATU news story). Any taxpayer-funded advertising is wasteful spending, but lottery advertising is especially disconcerting: lottery advertising is aimed at deceiving the public in that it attempts to manipulate people into believing they have good odds of winning, or tries to make individuals feel good about acting irresponsibly with their money (“When you play, Oregon wins”). The Oregonian put it well: “It’s imperative for the Legislature to revisit, rethink, and recalibrate the darkest bargain our state has ever struck. Because it’s actually darker even than most Oregonians realized.” (Editorial Board, “Is the Oregon Lottery for Us, or Against Us?” The Oregonian, December 31, 2009)
Link = http://www.oregonlive.com/politics/index.ssf/2009/12/oregon_lottery_lifts_self-impo.html
Link = http://www.katu.com/news/local/80403562.html
Link = http://www.oregonlive.com/opinion/index.ssf/2009/12/is_the_oregon_lottery_for_us_o.html
Link = http://www.oregonlive.com/opinion/index.ssf/2009/12/is_the_oregon_lottery_for_us_o.html

Permanently Reduce Capital Gains Tax Rate
Another capital gains tax rate proposal put forward during the 2010 governor’s race suggested an initial, two-year reduction of Oregon’s capital gains tax rate (from 11 to 3 percent). After two years, the rate would reset and stabilize at 5 percent, helping jump-start Oregon’s economy and making it more business friendly long-term.

ECONOMIC DEVELOPMENT

(2013 Session BILL) SB 231 – (Sen. Hass, Rep. Read) Reduces rate of tax on certain capital gains of personal income taxpayers. Transfers amount equal to estimated revenue from tax on all net capital gains to Oregon Rainy Day Fund. Applies to tax years beginning on or after January 1, 2013.

Reign in State Agency Fee Hikes
Under proposed legislation, agencies would no longer be able to increase or add new fees between legislative sessions. Specifically, HB 3487 requires that such fees adopted following adjournment of the regular legislative session are rescinded unless approved by Legislative Assembly at next regular legislative session. Certain exemptions apply. (For more information, contact Rep. Gene Whisnant’s office at 503-986-1453.)

Require a “Small Business Impact Statement” on All Business-Related Legislation
Bills passed in Salem often have unforeseen consequences on small business owners. A small business impact statement could help prevent such consequences and strengthen Oregon’s overall economic climate. (For more information, contact Rep. Gene Whisnant’s office at 503-986-1453.)

Suspend All Rules and Regulations that Impede Job Growth
Layers of rules and regulations stifle innovation and productivity. The temporary suspension of onerous rules in some local communications has recently had a positive effect on economic development. An across the board suspension could inject new life into Oregon’s struggling economy. (Paul Koch Consulting www.paulkochconsulting.com)

Accelerate the Depreciation Rate for Capital Improvements
This accounting reform would enable businesses to more quickly deduct the full cost of property-related expenses on tax returns, freeing up cash to invest in growth opportunities. (For more information, contact Rep. Gene Whisnant’s office at 503-986-1453.)

Extend Oregon’s Research & Development Tax Credit
Oregon’s R&D tax credit, which must be extended in the next session, helps fuel innovation and create jobs. Importantly, it’s available to innovative enterprises that increase expenditures over a base year. (Associated Oregon Industries www.aoi.org)

Increase Industrial Lands Inventory
The State of Oregon already has an excellent industrial lands inventory program and could easily add to the list if the state worked with small communities to target available lands for economic development. A coordinated effort would bring business leaders and state and local governments together, potentially facilitating quicker land use decisions. (Paul Koch Consulting at www.paulkochconsulting.com)

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