MEASURES 66 AND 67: The Californiazation of Oregon’s Economy


In a recent column, Washington Post columnist, David Ignatius wrote:

“The U.S. economy survived the traumas of 2009, thanks to good policy and good luck. What worries me, looking ahead, is what might be called the “Californiazation” of America — the growing tendency of our political system to make promises in social spending programs that it isn’t prepared to pay for with tax increases.”


Ignatius sought to cast the blame evenly on Democrats and Republicans by suggesting:

“The political forces that generate deficits are just too strong: a Democratic Party in hock to public-employee unions and a Republican Party in love with tax cuts.”


While that conclusion may be true in other places, it is certainly not true in Oregon. Oregon politics is dominated by the public employee unions and while it has had one record breaking spending increase after another, it has not had a tax cut in over twenty years. (The last tax limitation was Measure 5 which represented a tax shift rather than a tax cut.)

More importantly, the massive tax increase sought by the public employee unions under Measures 66 and 67 have nothing to do with funding “social spending programs” or even “educational improvement programs.” The total $733 Million dollar tax increase will be used to fund the additional 2400 public employees hired by Gov. Kulongoski and the gratuitous five percent pay increase over and above the regular salary increases authorized by Kulongoski during his second term in office.

While over 130,000 Oregonians have lost their jobs in the last two years, Gov. Kulongoski, with the approval of the Democrat dominated legislature, has hired 2,400 additional state employees. Almost all of those employees have become members of Oregon’s powerful public employee unions by virtue of collective bargaining agreements executed by Kulongoski that requires employees to be members of the unions or to pay the dues required of union members. The cost of those additional dues paying public employee unions members is $192.5 Million annually or $385Million for the biennium — half of the total proposed tax increase.

And while Oregonians in the private sector were losing jobs, losing hours and absorbing pay decreases, Kulongoski granted the public employee unions a five percent pay increase over and above the bargained for increase and the step increase (the one you get for just showing up for the job each year). Three salary increases in a year. Those salary increases added another $296 Million dollars for the biennium. That brings the total to $681 Million.

Last fall the Public Employee Retirement System board announced that it would increase the amount of mandatory employer (state agencies) contributions to 18 percent. That 18 percent does not include the six percent employee contribution that the state now makes on behalf of members of the public employee unions to Oregon’s gold-platted retirement program from state employees. The cost of that increase is difficult to calculate because it is an average amount that varies slightly from agency to agency and from state to local government. Suffice it to say, the legislature in the closing days of the last session increased funding to state agencies by $35 Million to account for a portion of that increase.

The totality of the $733 Million proposed tax increase is thus due to increased hiring and enhanced benefits to the members of the public employee unions. And, by the way, those additional benefits to the public employees weren’t free to them. Union dues are based on a percentage of the employee’s wages. As wages were increased, so were the union dues. And while 2400 jobs were added the accompanying increase in union dues for new members was similarly increased.

Oregon’s public employee unions extract about $60 Million dollars in mandatory dues each biennium. There are virtually no organizing efforts – membership is mandatory as a condition of employment — and no difficulties in contract negotiation — they bargain with the people whose campaigns they funded. Virtually all of the $60 Million is available each biennium for political activities — direct political contributions which must be reported and organizing, recruitment and “political education” all of which goes unreported. No private sector entity, or even group of entities can match the political war chest of the public employee unions on a sustained basis.

And that political war chest is collected and remitted by state and local government and the school districts under collective bargaining agreements — an effortless and mandatory fund raising at taxpayer expense.
While the surrounding states are beginning to recover from job losses as evidence by November employment reports (Arizona 15,000, Colorado 5,700, Utah 5,000, even lowly Nevada 1,400) Oregon continued its unrelenting job loss. Additional taxes on those who create jobs — private sector employers — will ensure that Oregon joblessness will continue well into the new decade.

The public employee unions are in full control of Oregon state government and they are extracting their “tribute” from you, the taxpayers. This time it is an additional $733 Million and, sad to say, that isn’t enough to sustain spending at the levels imposed by Oregon’s Democrats who are wholly beholden to the public employee unions. If you like the tax increases in Measure 66 and 67, you will love the additional tax increases that the next legislature will impose.

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Posted by at 06:00 | Posted in Measure 37 | 27 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Cord McCort

    I support the union control of the state, as I am in the union. When we are in charge, like we are now, we don’t have to worry about retirement, pay raises, time off with pay, paid holidays, workshops, etc. Most of us work less than if we were retired, truth be told, and we love it!
    Come to Salem sometime and walk the halls if you don’t believe me. There are donuts everywhere and plenty of coffee and a lot of breaks.
    We love this state!!
    I think I will apply for time off as my life in might be pregnant, or maybe just sick, but so what? I need a few weeks of quality time with pay.
    Wait, I forgot, I used too many minutes on my state cell calling my buddies in Alaska. Nevermind. The state will pay. They ALWAYS do.
    Good work if you can get it, and you can, as there are a lot of openings these days.
    A lot.

  • Bill Sizemore

    Good article, Larry, except for the part about there not being a tax cut in Oregon in 20 years. Measure 47/50 in 1996/1997 rolled back property taxes about $867 million per biennium before capping assessment increases at three percent per year. That was not a tax shift, but a genuine cut.

    As for the rest of the article, either we break the stranglehold the public employee unions have on the state and their use of the payroll system to collect their mandatory union dues or we will be just like California. PERS has close enough already.

    One more Democrat governor owned by the public employee unions and the party will probably be over.

  • retired UO science prof

    Measure 5 not a tax cut? Preposterous!!! Bill Sizemore is being the sensible one. Pretty strange!

    • Rupert in Springfield

      Measure five was a property tax limitation capping the rate of increase. That is a very different thing from a tax cut.

      Not many people would confuse the two, but for a retired university professor to make the mistake is especially surprising.

      • Oregonian

        But Rupert, they’re really NOT very different. And in fact, many people have and will confuse the two.

        The only way Measure 5 made any sort of sense was from the proponents also calling for a sales tax, which would have filled the void. Because that never came to be, we’ve been screwed ever since.

        And I’m just so goddamn frustrated with you assholes calling foul on 66/67 because it’s all about liberal spending and a guvmint power grab. You’re fooling yourselves or you’re truly bad people. I’m not sure which, but neither one builds a better state.

        FACTS
        If these measures don’t pass, we’re absolutely up a creek.
        67 will not have a job-killing impact on small business. It will have a negligible impact on major corporations, who have not been expanding jobs anyway. Small businesses are the one sector actually creating jobs in Oregon, and $140 of difference isn’t going to shut down the shop. That’s why the Oregon Small Business Council just endorsed the measures. They have a board made of small business owners from around the state who decided that the benefits reaped are far more important than the increase paid.

        So shut the hell up, find your own information and stop being led by the nose by big corporations, lobbyists and out-of-state developers. They’re trying to screw you, and until you wake up, they’re going to keep taking all of us to the woodshed.

        • Steve Plunk

          Wow. Nice civil discussion. When the name calling starts I usually figure facts are lacking. Why, as a small business owner, should I pay $140 more to a state government that is wasting what it already gets? The Oregon Small Business Council? What a sham. It’s a group of liberal business owners and far from representative of Oregon small business.

          The thing about the property tax limitation is the government figured out how to get around it. I pay more in city fees now than I do in property tax on my business. We may have to recalculate that tax cut.

          Salem got us into this mess and I doubt they can get us out. It’s up to citizens to instill some fiscal sanity and stop the runaway spending. Vote no.

        • Rupert in Springfield

          >But Rupert, they’re really NOT very different.

          Actually they are totally different. They are in fact as divergent as two things could be.

          A cap on the growth rate, as measure five is, means the tax can increase. A tax cut means that tax is reduced.

          Why you think they are not very different is anyone guess. Simply capitalizing the word “not” without stating why they aren’t very different really isn’t much of an argument.

          >The only way Measure 5 made any sort of sense was from the proponents also calling for a sales tax, which would have filled the void.

          No one is arguing propriety of measure five. The point is it was not a tax cut, it was a limit on the rate of increase.

          > I’m just so goddamn frustrated with you assholes calling foul on 66/67

          I always like it when we get into the weird word capitalization combined with the foul language. It adds this kind of crystal meth aroma to a heated political debate.

          Hmm, think Ill chuck on a white tank top before the little woman gets home.

          “Hey….little woman…..get me a beer……iron mah shirt…….and when I say the word iron, you best be thinkin of it as capitalized even though I just said it regular”

          >67 will not have a job-killing impact on small business.

          Why? What is your reasoning here? I noticed you did not capitalize the word “not” in this instance but you did earlier. Is a declarative statement by you to be taken as truth writ large regardless of capitalization of the word “not”? Clarification please.

          >Small businesses are the one sector actually creating jobs in Oregon,

          No they arent. Government is the only sector creating jobs in Oregon right now. Small business is either stagnant, cutting jobs or going bankrupt.

          >and $140 of difference isn’t going to shut down the shop.

          Good, then why don’t you pay it?

          Put your money where your mouth is and just simply give a business $140. You have no idea what the owner of that business makes so if $140 is of no matter to him then it obviously is of no matter to you. Why don’t you pay it?

          >So shut the hell up,

          Ok, so is the use of phrases like “shut the hell up” considered by you to be of equal argumentative import as the capitalization of the word “not” in making an argument?

          >find your own information

          Did it ever occur to you that some of us might own a business, thus be corporations and maybe know a little bit more about the situation than you give us credit for?

          >and stop being led by the nose by big corporations,

          Word to the wise – if capitalizing the word “not” is a poor argument, then calling your audience nitwits who are lead around by the nose is an even poorer one.

          >They’re trying to screw you, and until you wake up,

          You are trying to cost me money, but you are helping me, they are trying to save me money and they are screwing me?

          You know what, I’m not sure what your definition of screwing someone is, but I have a feeling we wont be dating any time soon.

          >they’re going to keep taking all of us to the woodshed.

          OK, now I know you are confused. “The Woodshed” is in San Francisco not Oregon. Anyway, I already told you, no date. Sorry.

      • eagle eye

        Measure 5 was a tax cut in the view of maybe 90% of us. The way Reagan’s income tax rate cuts were a tax cut. Yeah, my taxes kept going up under Reagan after an initial drop. But they were smaller as a fraction of my income. It was a cut by any reasonable definition.

        Similar with Measure 5 and its successors, 47 and 50 as I recall. Before: my property taxes ate up a large and increasing share of my income. After: the opposite. A cut by any reasoable definition.

        Yeah, retired prof gets, Sizemore gets it, so do I.

        Only some of the the stranger denizens here — where Sizemore is the one who doesn’t get it about tax cuts! — would claim that Measure 5 was anything but a cut.

        • Rupert in Springfield

          >Measure 5 was a tax cut in the view of maybe 90% of us.

          That sure sounds like you picked it out of thin air. You have any data to support this?

          Measure five was a property tax limitation, not a cut.

          >Yeah, my taxes kept going up under Reagan after an initial drop. But they were smaller as a fraction of my income.

          Well, the only way taxes could have gone up, but been a smaller fraction of your income would be if your income went up more than the taxes went up. Congrats on the raise!

          Congratulations aside – Your income going up or down has absolutely nothing to do with whether or not a tax cut has occurred.

          >A cut by any reasoable definition.

          So whether or not something is a cut depends on how it fluctuates as a percentage of your income?

          That’s utter nonsense.

          Example:

          If my property taxes are $1,000 a year and I make $100,000 a year then my property taxes are 1% of my income.

          If next year my property taxes (I don’t move but stay in the same house) are doubled to $2,000 a year, but now make $400,000 a year, my property taxes would now be 0.5% of my income.

          Hard to see how my property taxes doubling, but yet going from 1% to 0.5% of my income means I got a tax cut.

          Example:

          A homeless guy panhandles for $20 a day goes to buy some smokes. In the store right as he is buying the cigarettes someone walking out takes pity and hands him a twenty.

          His daily income was effectively doubled right at the moment of buying a pack of cigarettes.

          Viola – According to your logic cigarette taxes were just cut in half!

          But wait, homeless guys girlfriend is right behind him. She also rakes in $20 a day.

          She buys a pack of smokes.

          No one hands her a twenty.

          Viola, according to your logic, cigarette taxes just doubled back to where they were.

          >Only some of the the stranger denizens here —

          Oh good lord. Why is it everyone who doesn’t agree with you is always something like a “strange denizen” an “anti government fanatic”.

          • eagle eye

            Yes, Rupert, yes Rupert.

            Where did I get the “maybe 90%”? Yes, I pulled it out of a hat. You caught me on that, you fox! Perhaps I should have gone out on Willamette St. and done a survey.

            If you want to think that Measure 5 was not a tax cut, go ahead.

            Better yet, have a heart-to-heart with Bill Sizemore. One of the less-strange types.

  • Alan Grosso

    Great article Larry

    – as far as the Public Employee Unions and PERS – let us not forget the ONE MAN in this state who has fought tooth and nail over his entire career to control the power of these unions – BILL SIZEMORE. Sizemore pointed out the dangers of PERS 20 years ago and gave us numerous chances through ballot initiatives to curb the power of the unions. Falling for the lies of the unions and media, Oregon voters have rejected his numerous ballot initiatives. Conservatives have abandoned him.

    Because of his courage, the unions are out to destroy him. We should all be thanking him.

    • Steve Plunk

      I agree.

    • Anonymous

      You’re right. I abandoned him a long time ago and I still wish he would shut the hell up before he ruins all hope for the future of conservatism in this state. Lest you misunderstand my point, whether I agree with Bill or not, the fact remains that he has become a negative figurehead of conservatism in Oregon. He alienates people.

  • v person

    M 47 and 50 were both tax limitations AND tax cuts because they rolled assessment levels back. And last I checked, California also has public employee unions.

    • eagle eye

      An astute point. I don’t have records handy back to 1990, but my property taxes actually went down from 1996 to 1997, in current dollars, and as I recall, this was as a direct result of the reassessment following 47/50.

      And from 1996 to 2009, my property taxes rose, again in current dollars, at a rate of 2.98% per year. I doubt that this even keeps up with the CPI inflation rate, and it certainly trailed my income gains.

      No wonder my home property taxes seem a fairly light burden compared to pre-Measure 5, when they were most certainly not light.

      (And no wonder my county government is more stretched each year.)

      I count this as a tax cut. If anyone prefers to call it something else, they can do whatever they please.

      • v person

        Objectively it was a tax cut. We voted to shift the burden of funding schools (but not local governments) to the state, and failed to provide any additional state funding, so ever since we have had to struggle with the state budget. Oh, and we also voted to expand the prison population by an order of magnitude. No funds for that either, just like California with their 3 strikes initiative.

        We are repeating California’s mistakes almost verbatim. One version of insanity is to try the same thing again and expect a different result. We are eating our seed corn (higher education) of prosperity. I suppose if we keep this up we eventually be populated by such uneducated, stupid people that they won’t notice how bad things have gotten. Happiness may then sweep the land.

    • v person

      In fact, those unions allow openly gay members such as myself to express our inner passions. Frisco is actually my favorite town, so many men, so little time.

      • Steve Plunk

        Whoever is doing this needs to grow up. Respectful debate is needed not childish games.

        • v person

          Thanks Steve, but I think growing up is not going to be an option for this character. I’d like to see Catalyst be a bit more vigilant on removing his homophobic posts though.

          • v person

            Dean isn’t supposed to post here under any nme, he’s banned. So I agree with his gay alter ego v person that the Catalyst should weed him out.

            Along with his other alter egos, one only needs to see which gay posters don’t post when Dean is doing his weekend jail time to figure out who they are.

            Basically, until the Catalyst follows through on its bnning of Dean or he shows higher than 2nd grade intelligence in his posts, I’ll be here to point out his well known and truthful infeminite side.

          • Anonymous

            Wow. You are a stone cold moron. It’s almost fascinating.

          • actual v person

            Its beyond moronic. Its a weird homophobic response to a disagreement on politics. Its not rational, and therefore it can’t be addressed by rational arguments. Catalyst needs to get this weirdo’s posts off their site unless they want to drive away reasonable people.

  • Iddi Utts

    Wow. Tons of talk and bitching about everything except the FA. So which fusion centers are most of you working out of?

  • Jack

    GOV. BILL SIZEMORE Now’s the time

    • Anonymous

      LOL

      Isn’t Bill in jail?

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