The Fight for Control of Oregon

The 2009 legislative session has ended. The most notable accomplishment was to raise taxes by more than $1 Billion. With the Democrats having a super majority in both houses of the Oregon legislature, the fact that taxes would increase was a foregone conclusion. The general fund budget will increase by nearly $1 Billion while the all funds budget will increase by $5.4 Billion.

Meanwhile, one hundred feet or more from the Capitol Building in Salem, the real world of Oregon is in a deep recession. One hundred thousand Oregonians have lost their jobs. Oregon’s unemployment remains the second highest in the nation at 12.4% – nearly thirty-two percent higher than the national average. Oregon’s personal income fell by 1.5% in 2008 and has continued its decline in 2009. Oregon’s personal income fell to 90.5% of the national average — the worst in the state’s history.

With the help of a renegade Republican, the Democrats managed to avoid referring the tax increases to the voters. Now a group has formed to gather the signatures necessary to allow Oregonians to vote on the largest tax increase in the state’s history.

But let’s understand what is at play in this contest. Sen. Larry George (R-Sherwood) concisely defined the issue when he charged that the Democrats caved to the public employee unions that financed the Democrats campaigns and are the chief beneficiaries of increased government spending.

The battle over the tax increases is really a battle over the power of the public employee unions. The public employee unions, fueled by nearly $60 million each election cycle, collected and remitted by the state and local governments to the unions, will provide nearly all of the campaign financing to retain the tax increases. They have already appointed one of their own to manage the campaign.

And why shouldn’t they? While Oregonians have lost nearly 100,000 jobs the public employees have increased their numbers by 6,000 and, as a result of this budget, will hire at least another 1,100. While Oregonians lost their healthcare benefits with job termination, the Democrats declared that the healthcare benefits for the public employees unions were off limits and, in fact, added $32 million in the final hours of the session, to increase the benefits. And while many Oregonians fortunate enough to retain their jobs during this recession were forced to accept fewer hours and lower wages in order to preserve those jobs, the public employee unions continued to receive their cost of living and step salary increases.

Virtually all of the Democrat’s planning, strategy and orders emanate out of the Second Floor office of Tim Nesbitt, the former head of the AFL-CIO, the parent of most of Oregon’s public employee unions. While he retains the nominal title of Deputy Chief of Staff for Gov. Kulongoski, in reality he is the man in full control of the Democrat agenda and backs it up with the massive public employee unions’ war chest.

With Nesbitt’s assistance, backed by the wealth of the public employee unions, the Democrats have crafted a traditional “class envy” strategy in support of their tax increases. The public employees unions will attempt to sell the tax increase as only a tax on the wealthy — although in this case “wealthy” is defined as anyone making $125,000 per year which encompasses virtually every person who employs another person — you know, small business — the backbone of Oregon’s economy.

But this isn’t really about upon whom the tax falls. This is about any tax increase to benefit a relatively small but influential group — the public employee unions. This isn’t about whether “the rich” can afford to pay more in taxes; this is about whether public employee unions should continue to be enriched at the expense of taxpayers; whether it is appropriate for public employees unions to grow by 7,000 plus members while private employment (including private sector union employment) shrinks by 100,000; whether it is appropriate for the working men and women of Oregon to pay over $14,400 per year per public employee union member for healthcare insurance while they go without; and whether it is appropriate for one special interest group — the public employee unions — to be almost the singular beneficiary of a $1 Billion tax increase while the working men and women of Oregon — those who still have jobs — suffer a reduction in their per capita income.

It is not the increase; it is the purpose for the increase, which should be in question. Oregon voters are going to have to decide whether government exists to serve them, or they exist to serve the government — or more appropriately the public employee unions that control government from top to bottom.

For those managing the campaign in opposition to the tax increases, I hope that you focus on the real issues and not allow the public employee unions to dominate the campaign with their message of taxing the rich.