Video: Economist debate Measure 66-67 Oregon Tax

Taxpayer Association of Oregon News Update

Here is a video featuring a debate over the Oregon Tax Referendum Measure 66 and Measure 67 which raise business, corporate minimum and income taxes on Oregonians. The video features; Eric Fruits, PhD, is adjunct Professor of Economics and Finance at Portland State University, and has produced studies on economic analysis and financial modeling. Joseph Cortright is President of Impresa, a Portland consulting firm specializing in regional economic analysis. Mr. Cortright is also a non-resident Senior Fellow at the Brookings Institution and currently Chair of the Oregon Governor’s Council of Economic Advisors.

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Posted by at 08:38 | Posted in Measure 37 | 29 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Anonymous

    Oregon has a spending problem!

    Biennium–Total All Funds
    2009-11—-$53,760,031.018—– 9.38%
    2005-07—-$43,220,555,200 —-11.56%
    2003-05—-$38,743,009,114 —–9.11%
    2001-03—-$35,508,990,712 —-16.57%
    1999-01—-$30,462,319,439 —-11.55%
    1997-99—-$27,308,692,023 —-17.62%
    1995-97—-$23,218,655,377 —-15.85%
    1993-95—-$20,042,060,862 —-12.18%
    1989-91—-$15,174,994,031 —-20.72%
    1987-89—-$12,570,014,958 —–4.23%
    1985-87—-$12,060,094,718 —-17.97%
    1983-85—-$10,223,173,163 — 14.34%
    1981-83—–$8,940,741,798 –(-10.88%)
    1979-81—-$10,031,862,751 —-35.08%
    1977-79—–$7,426,493,362 —-42.91%
    1975-77—–$5,196,769,722 — 56.72%
    1973-75—–$3,315,908,507 —-22.15%
    1971-73—–$2,714,651,811 —-27.54%
    1969-71—–$2,128,527,639 —-13.49%

    • David from Eugene

      Your list is interesting but meaning less. Because of inter-fund transfers, federal pass through funding and the state liquor store system the total of all funds is not an indicator of state spending.

      In an effort to more accurately quantify program costs while at the same time take advantages of the economies of scale that result from consolidated purchasing operations the State of Oregon makes extensive use of inter fund transfers. For example rather then each department or agency having its own legal staff, they get their legal support from the Department of Justice. An amount of money is included in a agency’s budget to cover predicted legal expenses. When the DoJ provides such services, money is transferred from the agency, where it is reflected as an expense, to the DoJ, where it is reflected as income. The expenses occurred by the DoJ in the provision of the legal services are reflected on its books as expenses. Because of this system of internal billing of this it is possible evaluate operation of both the agency and the DoJ. This system however does render the “all funds budget” into a meaning less figure, as the legal expenses in the example are reported at least twice; first as the agency’s legal expense and once as expenses of the DoJ. Should mail, an automobile or printing, all provided by the Department of Administrative Services, be utilized during the provision of those legal services then through internal billing additional multiple reporting occurs.

      Some state agencies and departments, particularly the Department of Human Services and the Department of Transportation administer federal funds which are reflected on the Departments books. For example, the Food Stamp program is federally funded and administered by DHS and the additional bridge and rode construction in Oregon that was in the Federal Stimulus is administered by ODOT, in both cases the federal money shows up in their budget as both income and expense.

      As is the case of other retail operations the costs associated with the State Liquor Stores is consumer driven. More sales require more merchandise, more warehouse handling and shipping which increases OLCC’s income and expenses.

      • Anonymous

        There are no cuts, only increases in spending and hiring.

  • eagle eye

    We’ve seen this before.

    It’s the growth of the economy, stupid!

  • Anonymous

    I absolutely do not understand why any dollar amount of minimum tax makes sense.

  • Anonymous

    eagle eye, stupid

    Notice the difference between the 81 recession spending reduction and the current recession spending increase?

    Is it possible for you to apply some thought to that and respond spefically to that, with something specific to that, without diverting away from that into the usual left wing obfuscation and changing of the topic?

    • Anonymous

      Eagle eye can’t respond to the unsustainable spending increases. That is why he does not address them.

    • eagle eye

      It was pointed out here before that the figure for 2009-11 you posted was a preliminary figure. What is the figure now? And how has the general funds budget done?

      It’s called up-to-date information.

      Do you have a link to the figures you quoted here. I can’t even find the top one 53,760,031.018 on the web. Even when I change the erroneous period to a comma.

      • Anonymous

        No kidding? it is not 2011 yet ,thanks for the update.

        The state of Oregon projects income and spending,
        notice that

        2005-07—-$43,220,555,200 —-11.56%
        2003-05—-$38,743,009,114 —–9.11%
        2001-03—-$35,508,990,712 —-16.57%

        **Source: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce

        From the 67-69′ biennium to the 07-09′ biennium Total Funds Budget Increased 2460%

        From the 67-69′ biennium to the 07-09′ biennium Per Capita Income Increased 976%

        Oregon spending is unsustainable!

        • eagle eye

          Right, it has grown with the economy, stupid! Are you really that dense?

          If it’s not sustainable, it won’t be, because Oregon has to balance its budget.

          You should be happy, with the big recession, 2009-11 general fund revenues will probably be way down. Yes, the recession.

          • Anonymous

            I’ll try some simple math on you. If you spend more money than you have coming in, you will not be able to balance your budget.

            Oregon spending is unsustainable because Oregon’s spending, is growing faster than the taxpayers income.

            I don’t expect you to understand.

          • eagle eye

            Hate to break your little bubble, but Oregon has to balance its budget each year, by law.

          • Anonymous

            We know Oregon has to balance the budget.

            That is what most people do, when they live within the budget they have.

            Oregon does not have to spend more money, than is in the budget, but it does, biennium after biennium, supported by the Eagle Eye.

            I’m assuming the Eagle Eye is not seeing as clearly as in the past.

          • David from Eugene

            There are three ways to balance a budget, decrease expenses by reducing services, increase income by raising taxes and fees or a hybrid of the first two. The latter approach was taken by the Legislature.

            As to the spending increases in the current budget over the previous biennium’s budget, there is this thing called inflation, assuming you wish to maintain the same level of service, it will cost more this year then last. And if you fail to increase the budget to reflect this increase in costs then you will have to reduce the level of service. To put in different terms, if apples were 5 for the dollar and now are 4 for the dollar you have two choices spend $1.25 for five apples or spend only one dollar but only get 4 apples. Please note, that this assumes no increase in demand for the service, if there is an increase in demand it will cost more to maintain the same level of service. To return to the apples if were buying apples for a picnic, one per guest, and this year you have one more guest then last year, for a total of 6, you need to buy one more apple. Which means your expense for apples has just increased from $1.00 to $1.50 with no increase in the number of apples per person.

            Then there is the problem of services mandated by previous governmental actions, for example every time a felon is sentenced to 10 years, the state government accepts an obligation to incarcerate him for ten years regardless of increases in prison operating costs. Labor contracts are another area with similar long term obligations, If the state agreed to provide its contract employees a certain level of health insurance coverage is legally obliged to do so for the duration of the contract regardless of the increases in premium costs.

            While we are on the subject of inflation, it is important to remember that governments buy a different mix of products and services then the average family so the inflation rate that they experience is different from the inflation rate reported as reported as part of the Consumer Price Index.

          • Anonymous 2

            Thank you, David! For bringing some intelligence to the discussion. This really is Macroeconomics 101 stuff, and it can be exhausting at times to see the ignorance on display on these blogs (from all points along the political spectrum). Incidentally, the appropriate inflation index here would be the GDP deflator.

          • Anonymous

            Oregon Government spending is increasing
            Oregon Government employment has not cut back and increased during the downturn in the economy.

            The Private sector is cutting spending and many businesses are on life support if they are not out of business. The Private sectos is making real cuts and they are not receiving more money for inflation.

            Now you want to increase taxes on the private sector, that is hurting.
            So Oregon Government can be rewarded for not being able to balance a budget with the money they have.

            No wonder we are going broke!

          • eagle eye

            “Oregon does not have to spend more money, than is in the budget, but it does”

            This is idiotic, it literally is nonsense. What is in the budget is what it spends, exactly, that is what the budget is.

          • Anonymous

            And if the budget is more than the income, you have a failure to live within the budget.

            Oregon has a spending problem!

            We should not be rewarding the tax and spenders for doing a poor job of balancing the budget, with the resources we have.

          • eagle eye

            But the budget is not more than the income. If the projected budget goes over income, it gets cut. That is what is going to happen next year.

            The budget grew all those years because the economy was growing.

          • Anonymous

            The budget grew becasue they knew they could raise taxes when they were wrong.

            Oregon has a unsustainable spending problem!

  • eagle eye

    Good luck finding up to date information.

    The only way there could be a large increase in the all-funds budget would be from federal stimulus money. I don’t have up to date figures on that. Will it continue? Don’t ask me, ask Obama and Congress.

    The general funds budget — which is part that the legislature has to play with — depends on the Oregon economy.

    It’s the economy, stupid!

    • Anonymous

      It is the Spending

      Oregon expands and creates new programs every year
      even if they don’t have the money to sustain it.

      Oregon has a spending problem and does not know how to live within a budget!

    • Anonymous

      The general funds budget for 2010 – 2011 is the amount the legislature planned to spend during this period when they met in 2008, and has nothing to do with the present economy. The figures for 2007 and before represent actual expenditures, which may have been adjusted from budgeted amounts. Since we are still in 2009, the 2007-2009 figures probably represent budgeted, rather than actual expenditures.

      Try getting a clue abot basic economics before you call someone else stupid, stupid.

      • Anonymous 2

        A bold statement from someone who has consistently demonstrated himself to be less than economically literate (yes, we recognize you from previous threads).

      • eagle eye

        Anonymous one, you are catching on a little bit at least, this is what I was trying to explain to you.

        The 2007-09 fiscal biennium is already over, so those figures are probably what was actually spent.

        2009-11 is very uncertain, as nobody knows what actual revenues and expenditures will be.

        • Anonymous

          You did not explain anything, I did not know already. So stop patting yourself on the back

  • davidg

    I thought the moderator did an excellent job at trying to avoid asking loaded questions to the speakers. The speakers also did an excellent job at keeping the discussion civil; they both were knowledgeable and persuasive in advocating their respective positions.

    One issue that I thought needed more discussion was what will happen if the taxes don’t pass. A related issue is whether it is irresponsible for the state to raise taxes in this economy. During the campaigns for the last two major general taxes increases, Measures 28 and 30, the tax proponents predicted devastating cutbacks if the taxes didn’t pass. The voters strongly rejected both taxes and, when forced to do so, the legislature thereafter balanced the budgets without ruining the state. This is sort of the “pull the rabbit out of the hat” argument that Eric Fruits mentioned.

    The current tax proponents do not even try to show that the legislature ever seriously attempted to balance the budget with existing funds. Indeed, even without these new taxes, the Oregon state budget will still grow somewhere in the range of 5%. I just don’t see that Oregonians have any reason to trust that the legislature seriously tried to balance the budget. The legislature has no credibility. That is why I expect these new tax measures to fail.

  • Diamond Jim Franconni

    The state must grow its revenues or I am afraid people will die in the streets.

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