Measures 66 & 67: A New Report But An Old and Bogus Story

Gov. Kulongoski and his Democrat colleagues in the state legislature have released a document prepared by the Legislative Fiscal Office designed to show the effects on state government if the voters reject the massive tax increases passed by the legislature in 2009. It’s bogus.

The Legislative Fiscal Office (LFO) is generally described as a non-partisan body whose job is to give accurate budgetary information. However, the LFO is just like a computer — garbage in/garbage out. In this instance the LFO has simply cataloged the amounts given to it by Kulongoski’s administrators in state government. In other words this is not the independent recommendations of how to best reduce government spending. It is simply a mathematical computation of a highly partisan administration, which has designed its responses to impose the greatest burden on Oregonians while maintaining and expanding the employment and benefits of the public employees unions who provide most the campaign financing for Kulongoski and the Democrats in the legislature.

The documents supporting the compilation by the LFO are available on line. As usual, and by design, the layman’s ability to wade through these is severely compromised by the mind-numbing series of funds, programs, abbreviations, and bureaucratese. The budgeting process is never meant to illuminate, rather it is designed specifically to confuse and protect the domains of political appointees.

The most difficult thing to determine in any of these reports is whether and how many public employees are being reduced. (The primary exception is the Department of Corrections where the response is designed to horrify the populace by closing the Mill Creek, Columbia River, South Fork, Shutter Creek, and Santiam facilities and releasing 1800 convicted felons on the general populace.)

I say that because since Gov. Kulongoski began his second term — not quite two years ago — he has added 2,400 people to the state payroll. In the meantime, over 130,000 private sector jobs have been lost. In the few instances where state employee jobs are mentioned, the reductions are not from existing employees but rather from refraining from hiring even more employees. Take for instance the response from the Department of Human Services:

“CAF – Targeted Non-program/Administrative budget reductions: Due to budget shortfalls in the 2007-09 biennium, DHS CAF implemented hiring delays, selected non-direct service position freezes and stringent limitation or elimination of out of state travel and further restrictions in all other nonpayroll cost categories (supplies, professional services, etc). These actions were continued into 2009-11 due to the 4% Personal Services and 2% Services and Supplies reductions that were taken by the 2009 legislature and to cover other necessary costs. To achieve further reductions at the 1.5% level, CAF may need to expand hiring delays to direct service staff. To achieve the second 1.5% it will be necessary to expand hiring delays to direct service staff. Delays and other impacts on direct service and non-direct service staff wil affect services provided by CAF to the citizens of Oregon especially when combined with the impact of rising caseloads and office closures.”

I noted in a previous column:

“Roughly eighty-five percent of the state general fund and lottery budget is spent on personnel. You cannot achieve budget reductions without reducing the number of personnel. . . .

“I am told by legislators that the “rule of thumb” is that $50,000 is the rough equivalent annual salary. Add to that the twenty-four percent surcharge for PERS (eighteen percent required by PERS plus the six- percent contribution by employees that the state has agreed to pay on their behalf) and that figure becomes $62,000. There is another 7.65% for FICA and Medicare which brings the total to $65,825. Add to that the approximately $1200 per month paid for the public employees Cadillac health insurance plan and the total now becomes $80,225. By rolling back the total number of state employees to the January 1, 2008 levels, the state budget can be reduced by $192,540,000. If the current state government administrators are unable or unwilling to make such reductions, then new administrators should be found who can and will.”

That is $192.5 Million per year or $385 Million for the biennium — that is one-half of the so-called budget shortfall.

So here’s what you have to ask yourself. Has your life improved over the past two years because of the addition of 2,400 public employees? Were the Mill Creek, Columbia River, South Fork, Shutter Creek, and Santiam facilities closed before Kulongoski hired an additional 2,400 public employees? Where were those 1800 convicted felons that Kulongoski wants to release prior to hiring the additional 2,400 public employees? Did the addition of 2,400 public employees have any impact on the number of businesses that closed or the 130,000 private sector jobs that were lost?

If you are to believe Gov. Kulongoski and the Democrat legislature, if Oregonians fail to accept the massive $733 Million tax increases, the prison doors will be thrown open, schools will close, children will be denied food and medical care, and the elderly will be found wandering the streets fighting feral cats and dogs for the remnants of a Burger King dumpster. This is the same parade of horrors that former Gov. Kitzhaber, now Gov. Kulongoski and the Democrats used to try to scare the beejeezus out of voters in 2002 and again in 2003 when similar massive tax increases were passed, then referred to and rejected by voters. These scare tactics are so routine and predictable that only the government class who initiates them believes in their veracity.

There is a simple solution to the budget problem. Roll back the number of public employees to the levels at the beginning of Kulongoski’s second term. Recapture the gratuitous 5% salary increase that Kulongoski gave to the public employees unions — an increase in addition to the bargained for annual salary increases and step raises. Eliminate government benefits (welfare, healthcare and educational) for illegal aliens. None of these actions will impact benefits and services to Oregonians — no prisons will be closed, no schools will be closed, and no Oregonians will be denied food or medical care as a result. But the sum total of these actions can reduce state government spending by over $1.4 Billion* for the biennium — more than enough to cover the so-called “shortfall” AND introduce private sector incentives** to create and grow jobs in Oregon.


ï‚· $385 Million from the rollback of government employees
ï‚· $296 Million from eliminating the gratuitous 5% salary increase
ï‚· $800 Million from terminating government services for illegal immigrants

ï‚· Create a tax free capital gains for all investments made for the next ten years and couple that with a reduction on capital gains tax to one-half of the current rates phased in over the next five years.
ï‚· Accelerate depreciation schedules for all capital investments made to at least equal those utilized under federal income tax laws.
ï‚· Create a tax credit for one-half of the amount that wages exceed federal minimum wage standards for each new job created from November 1, 2009 until January 1, 2012.
ï‚· Create a series of utility corridors throughout the state that will a) result in energy being transported from where it is generated to the state’s metropolitan areas, and b) in which the permitting process will be determined within a six month process.