In the Budget Crisis Everybody Suffers But the Public Employees Unions


Oregon’s budget deficit grew to $577 Million for the current biennium. It’s not the end. When the next quarterly revenue estimates are published in August the budget deficit will be even worse. And that gap will increase again when the revenue estimates are published in November. Each month that passes without substantial spending cuts makes the solution more draconian.

Gov. Kulongoski and the Democrat leaders of the state legislature are well aware of both such problems and are using each to make the eventual solution so harsh as to be unpalatable and thus set the stage for another round of tax increases. They have also placed the welfare of their campaign financial arm – the public employees unions – ahead of the poor, the elderly and the school children by refusing to entertain any meaningful reductions in numbers of or wages for the public employee union members.

These criticisms may seem harsh but they are based on statements and actions of Kulongoski, Senate President Peter Courtney (D-Salem) and House Speaker Dave Hunt (D-Gladstone) and the leaders of the state public employees unions.

First, the budget gap will increase with the next revenue forecasts for the simple reason that the revenue forecasts are based on a model that assumes an increase in revenue from any given point. When the actual collections fail to meet the forecast, the forecast is simply reset at a lower base and the same percentage increase (growth) is applied. The model lacks reality and has failed for four quarters in a row to even remotely reflect actual revenue collections.

Reality is found in the economic indices calculated by University of Oregon economists, Tim Duy. A recent Oregonian article noted:

“Oregon’s recovery is faltering, economists say, as unemployment claims jump again with no big source of job growth in sight.
“The state’s economy is just not growing fast enough to produce the jobs it would take to leave the recession behind, said Tim Duy, a University of Oregon economist who produces a monthly index tracking items ranging from trucking activity to manufacturing.”

The fact of the matter is that there is nothing current, or on the horizon, that would suggest that Oregon’s economy will begin growing again and, absent that growth, the revenues to state government will remain static or shrink – in either instance, it will fail to meet the current projections.

This same forecasting failures occurred during the last recession and the revenue forecasts failed to meet expectations for over seven quarters – starting shortly before the ink was dry on that biennial budget.

Which brings us to the second point. Former Gov. John Kitzhaber, with full knowledge of the continuing decline in revenue refused to reduce state spending during the last recession. By veto and threat of veto, Kitzhaber prevented special sessions of the legislature from reducing spending to match diminished revenues. The net effect was to push the twenty-four months worth of reductions out to the last six months making the reductions four times greater than necessary.

(Example: assume a budget of $10 Million dollars per month or $240 Million for the biennium. Then assume that a ten- percent budget reduction is required because there is a $24 Million shortfall in revenue. If you apply the shortfall evenly across all twenty-four months, it will be a $1 Million per monthor or ten percent reduction for the term and spending will continue at $9 Million per month. On the other hand if you continue – as Kitzhaber did – to spend at $10 million per month for the first eighteen months you will have spent $180 Million leaving only $60 Million dollars for the remaining six months to absorb the $24 Million shortfall. That will require a forty- percent reduction to the remaining budget requirements.)

The whole purpose was to make the reductions for the last six months so painful that legislators would accept a tax increase and that they did. However, citizens referred the tax increase to voters who soundly defeated it by a sixty- percent margin. As Kitzhaber’s successor, Kulongoski participated fully in the ruse. Apparently he and his Democrat colleagues intend to use it again in this recession and accompanying budget shortfall.

The state’s major newspapers all have reported that Senate President Courtney and Speaker Hunt led the charge to reject a Republican call for a special session to deal with the budget shortfall. Kulongoski supported delay of any special sessions. Both actions have the effect of delaying a solution and making the eventual budget cuts more difficult to absorb.

Which brings us to the third point. Kulongoski and his Democrat colleagues intend to balance the budget on the backs of the poor, the elderly and the state’s children. Because the legislature has been prevented from meeting by the Democrat leadership, we are left to the actions of the Kulongoski administration to implement any reductions in spending. Kulongoski has requested and received from his administrators proposals to reduce the budget by nine percent.
As the Oregonian’s Harry Esteve reported recently:

Oregon officials release a long list of potential budget cuts Wednesday, including some bombshells, such as closing three state prisons, freeing nearly 1,000 inmates and ending in-home care for 2,000 elderly residents.
* * *
“School districts, which must find about $250 Million
[about half the cuts] in savings, already are ratcheting back.
* * *
“Also on the chopping block is $158 Million from programs that help the elderly, disabled residents and poor families.”

[Bracketed words supplied]
These reductions stand in stark contrast to the reductions in the number of public employees whose numbers have grown by 4,200 since Kulongoski took office. According to the Oregonian’s Esteve:

“Although Kulongoski has said the cuts would ‘Certainly’ result in state worker layoffs, it doesn’t appear that this round will cause a large number of job losses. If let stand, the proposals would eliminate 750 full-time positions, of which about 450 are held by workers. The remainders are unfilled posts, according to the governor’’ office. Many of those workers, however, – about 230 – are prison guards and appear likely to keep their jobs.”

So, of 750 positions to be eliminated, 300 represent positions not currently filled – thus no reduction in the actual number of public employees. Of the remaining 450 positions, 230 are held by prison guards. (These relate to the proposal to close three prisons and turn loose 1000 criminals on Oregonians and after the uproar caused by this proposal, Kulongoski quickly rejected that proposal.) With Kulongoski’s rejection of this proposal now only 220 positions are at risk. Of 79,300 state public employees, Kulongoski’s administration can only find 220 (less the 0.3 % of the workforce) to eliminate.

In previous columns I have estimated that the cost per employee (based on an average salary of $50,000 per year, plus benefits and federal payroll taxes) is $80,225. That amounts to about $17,600,000 or three percent of the total reductions proposed. (Although the number of position reductions actually proposed represent a very small percentage of the total state public employee workforce, the budget impact is nearly ten times greater. That is no surprise since about eighty-five percent of the state budget represents employee costs and benefits and less than fifteen percent represent actual benefits to the poor, injured or elderly.)

So, while liberal Democrats bleed public for the plight of the poor, the sick, the elderly and the ch-h-hil-l-l-ldren (you have to drag it out like a moan), in actuality, they are more than willing to throw all of them under the bus to protect their financial arm in the public employees unions. A $250 million reduction in schools for our children, a $158 million reduction for our poor and elderly, and the release of 1,000 inmates on an unsuspecting public.

Thank you Gov. Kulongoski. Thank you Sen. Courtney. Thank you Speaker Hunt. And thank you Oregon’s public employee unions – you’re the bomb.

By the way, eliminating the 4,200 positions created by Kulongoski would save the budget – wait for it – $336,945,000 – but that would cost the public employee unions and their Democrat allies over $3 million in funds available for their political activities.

Go figure.

Post to Twitter Post to Facebook Post to LinkedIn Post to Reddit

Posted by at 06:00 | Posted in Measure 37 | 42 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Steve Plunk

    I have noticed through my work on the county roads committee that when layoffs come it’s usually just not filling positions or allowing attrition to reach the goal of fewer employees. Rarely are there any actual layoffs sending someone to the unemployment line. The protection of public employee jobs has become a problem just like PERS and the shameful double dipping.

    It really has become a basic conflict of who serves who. Do the public employees act like employees and serve those who pay them or do the taxpayers of Oregon serve the public employees and their unions? I find myself feeling more like I serve them rather than the way it should be.

    The conspiracy of winks and nods between the liberal Democrats (and some Republicans) and the public employees has been going on for decades now. Generous compensation packages were quietly given in return for campaign support. Larger agency budgets boosted employment in the sector and provided more union members and their dues. Again campaign support was returned. European socialist models of government programs were pushed in order to please what is a generally leftist public employee population and once again campaign support followed. The problem is they have now ran out of other people’s money to finance this dream.

    I have wondered for a number of years now if the number of public employees has reached critical mass. I wonder if enough people employed in the public sector along with their spouses, children, relatives, friends, and fellow travelers have amassed the voting power necessary to never allow us a return to sanity in government size and spending. I hope we’re not there yet. I hope the proper balance of power can be restored.

  • Anonymous

    “about eighty-five percent of the state budget represents employee costs and benefits and less than fifteen percent represent actual benefits to the poor, injured or elderly”

    This is an outright lie. The single biggest expense in state government is human services such as medical and food stamps. Nearly all the cost of these programs is the cost of the benefits given to recipients. The Medicaid budget is almost 99% pass through to clients and just over one percent administrative. There are actual public figures available for your review. I suggest you read them.

    Now, that said, my point here is NOT that we shouldn’t cut spending. My point is that the demon of public employees is NOT the real enemy. The real enemy is the runaway social spending. We could eliminate the entire DHS share of the budget deficit (about $150 million give or take) simply by ending all welfare benefits for illegal aliens (of course, to do so would require changes to both state and federal law).

    How about we focus on cutting PROGRAMS and BENEFITS that aren’t necessary? Why don’t we completely eliminate ERDC? That’s employment related day care. As in, if a welfare mom won’t get a job because she has no one to care for the kids, she can get free day care from the state. Now, here is the kicker: you can become a day care provider and get paid by the state to do it, as a member of SEIU. Now, consider this: if the welfare mom works as a day care provider, she can paid to watch SOMEONE ELSE’S kids – while at the same time, sending her own kids to another provider, who is also getting paid – all while collecting welfare benefits.

    THIS is the kind of spending we need to kill. And we could do a better job of it if we could attract and retain better actual policy workers with the state. But we can’t do that because, contrary to what you claim about average salaries and benefits, the state really doesn’t pay people what the would be worth IF they actually did the jobs they were hired for competently. So instead we get a bureaucracy filled with inefficient middle management that couldn’t survive in the private sector, with no incentive to get things done right.

    Solutions:

    1) Eliminate SEIU, not the positions themselves
    2) Eliminate the ridiculous job security of state workers
    3) Fire the incompetent
    4) Raise wages to attract better workers
    5) Hold the new workers accountable

    Once you have done this, you will have a radically different state workforce – that will cost more in terms of salaries – but that will in return actually get things done and make the state run efficiently with less fraud, waste and abuse. In other words, hire better people and get far more out of them than the extra cost you incurred in hiring them.

    That, and get rid of ERDC and all benefits for illegal aliens.

    • Rupert in Springfield

      >We could eliminate the entire DHS share of the budget deficit (about $150 million give or take) simply by ending all welfare benefits for illegal aliens (of course, to do so would require changes to both state and federal law).

      No change in law would be necissary in the case of Medicaid. Under the DRA (Deficit Reduction Act of 2005, one of the last good things to come out of congress) there is already a citizenship requirement for Medicaid.

      As far as other benefits for illegals – the other single biggest one, schools, is not possible. Constitutionally, if you believe the Supreme Court, it is not permitted to have citizenship requirements for minors attending public schools.

      So, what cuts that are constitutionally permitted that could obtained from eliminating benefits to illegals are largely a case of simply enforcing existing law.

      What is really the key in the costs of such programs is not their administrative costs, which are 5% in the case of Medicaid, but rather their explosive growth. DHS has seen explosive growth in their budget even after you take out recession related increases such as food stamps and unemployment.

      Can that growth be cut?

      Not for the foreseeable future.

      Right now the political zeitgeist is on expanding enrollment in these programs, not curtailing it. An example of this would be the expansion of the SCHIP program. This was one of the first acts of the 2008 congress. Supposedly it would be paid for by expansion of tobacco taxes. Obviously that will not work too well into the future as you cannot use a declining revenue stream to fund a program with expanding enrollment. However it is illustrative of the recent spending on the state and federal level that is at polar opposites with economic reality.

      The timeline for solutions at this stage has passed. We must now face the folly of electing people who though the boat was known to be on course for an iceberg for some time, chose to steer it full speed into the devastation.

      There is no reasonable economic model or forecast at hand that will yield projections that will meet funding requirements. Likewise there is no political will in the reasonably foreseeable future to restrict enrollment for entitlements, indeed the political will is in exactly the opposite direction.

      The only solution at hand is to simply stand back and watch the crash. This could come in the form of state bankruptcy, which would essentially be going into Federal receivership. Elimination of programs, enrollment and government employee positions through that method is the only one to be seen on any foreseeable horizon. Expect that horizon line to move closer as federal stimulus money eases. It will be hard at first, but in the end it will be good for the country.

      • Anonymous

        “No change in law would be necissary in the case of Medicaid. Under the DRA (Deficit Reduction Act of 2005, one of the last good things to come out of congress) there is already a citizenship requirement for Medicaid.”

        Actually, Oregon provides a lot of benefits to illegals, including Medicaid. Under the CAWEM pre-natal expansion, OHP Plus benefits are given to pregnant illegal aliens. Because this is against policy of the DRA, this is paid for entirely with state general fund with no Medicaid matching funds.

        We also hand out food stamps, TANF cash, and ERDC to illegals every day, none of which falls under the DRA.

        • Rupert in Springfield

          Oh I am never we do not hand out benefits to illegals. We do. My point was that no change in the law, at least federally with regard to Medicaid required to stop handing them out. That’s what I said.

          • Anonymous

            That much is correct. We could end all welfare benefits other than emergency room for illegals today with a single executive order. And as for schools, just because SCOTUS ruled one way 30 years ago doesn’t mean the issue isn’t ripe for a new challenge. Ron Saxton proposed it in 2006 and was pilloried over his ignorance of the law – and rightfully so, because he didn’t show any awareness of Plyer v Doe. However, when you launch a policy by stating upfront you are seeking a challenge with SCOTUS to revisit the issue, that’s a very different situation.

  • Bob Clark

    Anonymous I think is confusing the all funds budget with the state funds only budget. Food stamps for example is funded with federal dollars and not state dollars, and federal dollars also fund a large portion of medical expenses.

    Dave Hunt recently said the federal government should bail out the state regarding its current budget deficit. He argues the state is only asking to get back monies sent from the state to the federal government. This is a bogus argument. The monies he’s talking about are sent by individual Oregonians, and do not belong to the state government of Oregon. By extension, I guess he should want any expenditures Oregonians make on out of state services and goods to be returned to Oregon state government coffers. Is it any wonder the state government is in poor fiscal and economic shape with leaders like Dave Hunt. I guess you could call him “Panhandler” in chief.

    My own pet theory about Oregon and city of Portland governance is they have both lost their way by focusing efforts on gaining federal government subsidies rather than focusing on being a competitive place to locate and expand private business activity. “Green jobs” is an extension of this as it requires heavy federal subsidies. This focus becomes very disadvantageous if the federal government is forced to sharply curtail its massive deficit spending.

    • Rupert in Springfield

      >Anonymous I think is confusing the all funds budget with the state funds only budget. Food stamps for example is funded with federal dollars and not state dollars, and federal dollars also fund a large portion of medical expenses.

      Yes, at the Medicaid level States are reimbursed for medical costs at a rate of 50% to 83%. There is a floor of 50% with the higher percentages being paid to states with lower per capita incomes.

      On the administrative side of Medicaid – states are reimbursed at a flat rate of 50% for most administrative functions.

      You only get to the 1% figure if you take the total cost of the program, both state and federal and then look at only the state cost on the administrative end.

      However that is not really a fair figure because you are counting the totality of the program, both state and federal funds, but then not counting that portion of the federal money in the administrative portion. In other words the 1% figure represents the states cost of administration of the program (actually the figure is closer to 2.5%) but it is not the total cost of administration.

      • Anonymous

        The salaries for the employees are also paid for with matching funds.

        • Rupert in Springfield

          Yep, and that was pointed out. Here is the quote.

          “On the administrative side of Medicaid – states are reimbursed at a flat rate of 50% for most administrative functions.”

  • valley p

    Larry Huss writes: “The fact of the matter is that there is nothing current, or on the horizon, that would suggest that Oregon’s economy will begin growing again and, absent that growth, the revenues to state government will remain static or shrink”

    I find this a strange but telling statement about not only Larry’s thinking, but the current thinking, if we can call it that, of conservatives in this state and nation.

    We live in a state and nation where economic growth is the norm, interrupted by short periods of decline or stalling. If you looked at all the years from 1932 to today, how many had positive growth and how many were negative? My rough calculation is we had 68 years where the economy was growing and 10 where it was shrinking or stagnant, including the most recent years of 2008-09. Despite Larry’s inability to see any growth on the horizon, the economy is in fact growing right now and has been for the past 2 quarters. In other words, he can’t see it on the horizon because it is growing in the here and now.

    But conservatives can’t accept or acknowledge this reality because they have to insist otherwise in order to bring down their enemies: Obama, Kitzhaber, Wyden, public employees, and so forth. And they not only can’t accept reality, they do everything they can to make sure the economy fails to grow fast enough to result in Democrats retaining power. They do this by saying no to every proposal to improve things, and then point fingers to blame those currently in power, particularly Obama, who only got elected to clean up the mess conservatives left behind.

    And Larry goes on to complain about cuts to the poor, elderly, and school kids? Really? Larry is now a liberal in favor of income transfers from himself to the poor? When did that blessed epiphany happen?

    Don’t you guys ever get tired of your own contradictions?

    • Jerry

      “Don’t you guys ever get tired of your own contradictions?”

      How could we grow tired of them? That would require us to be intellectually honest enough with ourselves to be aware of them.

    • Steve Plunk

      I heartily agree the norm is growth but we are experiencing the abnormal culmination of some bad policy decisions. Government debt is now at an all time high and likely to lead inflation and tight money for business loans. Unfunded mandates at all levels of government are likely to impact budgeting in unforeseen ways. The regulatory atmosphere is continuing on an upward trend at all levels of government as well leading to slower business expansion and fewer jobs.

      History can be a very valuable tool in plotting the path for the future but we are in new waters with little historical record to help us. We could assume growth will come but we would have to ignore all of those conditions listed above. Sort of like how our government leaders ignored the history of recessions and failed to budget responsibly.

      Making the claim that conservatives do everything in their power to make the economy fail is immature and naive. Conservatives want the economy to do well no matter who is in power but we also know who is more likely to help accomplish that and it’s not Kulongski, Kitzhaber, Obama, or any of the other quasi socialists looking to redistribute wealth and centralize government control.

      Conservatives left no mess behind and claiming such is getting old. The economic boom times of the 80’s, 90’s and beyond were the result of free market ideas and the hard work of American people.

      • valley p

        OK…growth is the norm. Share that with Larry. Bur government debt is not at an “all time high.” It was way higher in the 1950s and the economy boomed most of that decade. It was as high during Reagan’s presidency, the economy did well, and conservatives now conveniently ignore that. It was Cheney who said Reagan proved deficits do not matter when he defended the Bush tax cuts that blew the budget surplus Clinton had handed him on a platter.

        We have zero inflation right now. Zero is a pretty low number. It is to low. We need a bit of inflation right now if we are going to be able to bring the unemployment rate down to reasonable levels.

        Business regulations were systematically dismantled over the previous 3 decades and look where it got us. Two financial meltdowns and an uncontrollable oil spill.

        “History can be a very valuable tool in plotting the path for the future but we are in new waters with little historical record to help us. ”

        Nonsense. Our nation had a long history of financial meltdowns prior to Roosevelts banking reforms. We avoided financial meltdowns up until Reagan deregulated Savings and Loans, and within a few years had an expensive meltdown. We had several near international meltdowns in the 90s, and then the catastrophic one we just experienced. We ignored history and recreated problems we had not had for many decades.

        All eras are somewhat unique. New issues, new technologies, new challenges. All require creative problem solving that goes beyond simply recreating past solutions. But not learning from history? Assuming current problems have no precedent? Bad idea.

        “Making the claim that conservatives do everything in their power to make the economy fail is immature”

        Evidence is to the contrary. The only prescription conservatives have offered to get us out of this mess is a return to the policies that git us into it: tax cuts for the rich and spending cuts for everyone else. Oh yes, and the new one is don’t dare cut Medicare. I can only conclude they are either fools or economic vandals. I prefer to think they are not fools.

        “Conservatives left no mess behind”

        Reality has no chance here. Your honor…I rest my case.

      • Rupert in Springfield

        Steve, don’t get into a discussion of economics with Dean, he simply doesn’t have the grasp of the subject to discuss it.

        Mistake one – Debt being much higher in the 50’s – First of all, untrue. debt in the 50’s was a fraction of what it is today. As a percentage of GDP debt was higher, but when you look at that measurement you are looking at the trend, not the absolute number. As a percentage of GDP debt was trending sharply downward. Currently it is trending sharply upward, largely due to anti Keynesian policies such as hiring government workers and increasing entitlements. Again this is a basic economic point, but you have to have some basic understanding of the subject to engage in it.

        Mistake two – Growth generally trends upwards with small dips downwards for recessions – Actually this is a strategic mistake more than a factual one. If one accepts the premise that the economy generally shows upwards growth with relatively minor and short lived dips downward, then obviously it makes no sense not to privatize social security. Since Dean has repeated constantly in the past that this would be absolute lunacy Dean is very selective as to when his economic beliefs come into play.

        In other words Dean will shift his economic assessments according to whether it will benefit or hurt Democrats.

        Since it now helps Obama to say growth is generally upwards with only minor short dips down, Dean promotes that. If you try and then say if thats true, why would we not privatize social security Dean will go on and on about the horrible prospects for growth in the stock market.

        Incidentally the SS argument is a great way to trap any liberal on this issue. Clearly if the government can always pull us out of a lousy economic situation simply by spending, then clearly risk in the stock market is zero. Thus privatization of SS becomes impossible to argue against since there is no risk and the returns are obviously greater than SS promises.

        I’ve gotten the deer in the headlights look real quick whenever I’ve made it with the crowd that thinks, wrongly, that Obama is applying Keynesian economics.

        • valley p

          “debt in the 50’s was a fraction of what it is today.”

          Sure, and a dollar in 1950 would buy you what compared with today?

          “As a percentage of GDP debt was higher, but when you look at that measurement you are looking at the trend, not the absolute number.”

          This is an unintelligable sentence. How are you looking at a “trend” when you are looking at a “measurement?” A trend is established by measuring something over time. A debt level can be a snapshot or a trend depending on what information you are after.

          And: “As a percentage of GDP debt was trending sharply downward. ”

          Yes the trend on public debt was downward from 1950 to 1980. (A time of 90% top marginal tax rates and the acme of private sector unions, but why bring that up? That would only confuse us because we know we can’t possibly have a growing economy and be paying down our debt when taxes on the rich are confiscatory and there are all sorts of unions demanding higher wages). Then the trend reversed. Lets see….what happened in 1980? Ronald Reagan the great fiscal conservative was elected! Debt increased from 33% to 60% of GDP over the next decade. That held steady in the 90s thanks to Clinton’s surpluses that followed Bush 1’s deficits.

          Then the turn of the century arrives and the Supreme court elected George Herbert Hoover Bush in a 5 to 4 decision. What happened next? He cuts taxes because deficits do not matter. Reagan proved it. Debt starts to go up again faster than the GDP. He starts at 57% and ends at 86%. And he leaves us with the worst recession since the 1930s. Tax revenues plunge. Hello TARP. “Good luck Obama! I’m off to the ranch…I mean the suburbs of Dallas. Never did like all that brush clearin nonsense heh heh. ”

          “Currently it is trending sharply upward, largely due to anti Keynesian policies such as hiring government workers and increasing entitlements.”

          Oy vez is mir. Rewind the econ 101 class for Rupert. Keynes called for counter cyclical spending. That means increasing debt spending during down times. Look it up for God’s sake.

          “If one accepts the premise that the economy generally shows upwards growth with relatively minor and short lived dips downward, then obviously it makes no sense not to privatize social security. ”

          Um…a “premise” is a statement “assumed to be true.” The US economy generally growing is a fact, not a premise. So what you are “accepting” here is a fact. That is a big step for you because normally you don’t accept facts. So I’m all for this if it becomes a trend.

          However, it does not follow that, syntax problems aside, ” it makes no sense not to privatize social security. ”

          This may be too confusing for you, but Social Security is not an individual investment program. It is a social insurance program. An entitlement. It makes no sense to privatize a social insurance program. It makes perfect sense for people, including you, to set aside money and invest it wisely on your own behalf.

          “In other words Dean will shift his economic assessments according to whether it will benefit or hurt Democrats.”

          No Rupert, that technique is yours. Which is why you insist that the Bush economic record was pretty good even though objectively, it was the worst 2 term record of any president since Hoover.

          “Since it now helps Obama to say growth is generally upwards..”

          Helps Obama? How does stating actual facts help him? How do I ‘promote” reality? Reality is what it is Rupert. Growth is generally upwards. 68 out of 78 years establishes that. And current growth is factually upward. These are not political statements. They are statements of fact, not opinion.

          “Dean will go on and on about the horrible prospects for growth in the stock market.”

          You are the one who claims to predict the stock market, not me. The market is basically a casino and the house always wins. If you want to put your life savings in there and anticipate a steady 8% return, go for it. If you want to put our nations social insurance account in there, I have a problem with that.

          “I’ve gotten the deer in the headlights look real quick whenever I’ve made it with the crowd that thinks, wrongly, that Obama is applying Keynesian economics. ”

          I suspect Rupert, that what you perceive as a deer in the headlights look is actually a “who is this nut case and why is he talking confidently about things he appears to have no clue about ” look. I can’t be sure of that of course, but one sign is if they say something like, “excuse me but my communist cell leader is calling and I have to go to a meeting where we are having a secret Skype chat with comrade Obama. Fascinating discussion though. Lets do it again sometime ok?” Or words to that effect.

          • Anonymous

            “I suspect Rupert, that what you perceive as a deer in the headlights look is actually a “who is this nut case and why is he talking confidently about things he appears to have no clue about ” look.”

            I think you hit the ball out of the park on that one vp. Rupert’s delusional arrogance combined with what seems to be a complete lack of self-awareness suggests a severe inability to recognize the expressions of those who would rather say nothing than argue with a wingnut. It’s really kind of sad.

          • valley p

            “I think you hit the ball out of the park on that one vp.”

            I won’t let it go to my head. Catalyst is a hitters park, and Rupert throws nothing but softballs.

          • Rupert in Springfield

            >who is this nut case and why is he talking confidently about things he appears to have no clue about

            A lot of talk from someone who doesn’t really have much to add but just wants to throw insults.

            Do you point out where I don’t know what I am talking about? No of course not.

            The reason being that you are just another dopey anonymous guy who can’t form a coherant argument but thinks insults are a convincing substitute.

            That’s not of much value, but then again I have a feeling you are of little value in whatever activity you attempt to engage in.

            Clearly you bring nothing to the table here.

          • Anonymous

            Yes, because your hands are clean, Rupert. You’ve never insulted anyone here. Never. Wouldn’t think of it, right? Meanwhile your reading abilities continue to suffer… “who is this nut case and why is he talking confidently about things he appears to have no clue about”… what you have attributed to me, actually belongs to vp. I merely complemented him on the accuracy of his statement.

            “The reason being that you are just another dopey anonymous guy who can’t form a coherant argument but thinks insults are a convincing substitute.”

            So let me get this straight, in your mind that constitutes an argument? Or is that just an attempt at an insult?

          • Steve Plunk

            If you’re going to lie about the election why should anything you say be trusted? An independent review conducted by a coalition of news services determined Bush would have eventually won the election under any criteria. You are living in a delusional world when you bring nonsense like this up.

            The increase in debt under Bush was a result of two things. The first was the war in terror. A war we didn’t ask for or want but needed to fight. The second was his flaw of compromising with the free spending Dems. That’s another reason the Tea Party has come about, to rid the Republican party of those who compromise away principals through politics. It’s an error of President Bush’s I cannot forgive.

            The real proof is in the pudding. Our public employees, through their unions, and the Dems are bankrupting us. The next year will give us more evidence to support that statement.

          • Rupert in Springfield

            >If you’re going to lie about the election why should anything you say be trusted?

            Well, lets also not forget lying about the debt in the fifties.

            I mean how the hell can anyone screw that one up?

            Well, I guess you have to be Dean.

            So, now he is trying the usual trick of diversion – the nonsense election argument. Which is also a screw up, since every paper in the country went down to Florida and found no matter what Bush won. The only thing notable they found was that if Bush’s criteria for hanging chads was used, the election would have been closer. If Al Gores criteria were used, then Bush got more votes.

          • valley p

            “Do you point out where I don’t know what I am talking about?”

            Let me take a whack at that. Keynes. You don’t seem to have the first clue. Your social skills at parties could also use some work (based on your own description).

            From Steve: “An independent review conducted by a coalition of news services determined Bush would have eventually won the election under any criteria. ”

            Two points. Number one, we know there was a dispute over a partial recount, and we know Bush was able to stop the recount based on a 5-4 Supreme Court decision. The media review, as I recall did statistical sampling only. Maybe they were right and maybe not. We will never know because the recount never actually happened. What we do know is that had the media review found the other way, you would be saying big deal. The Supreme Court rules. Stop whining.

            “The increase in debt under Bush was a result of two things. The first was the war in terror. A war we didn’t ask for or want but needed to fight. The second was his flaw of compromising with the free spending Dems.”

            This is what makes injecting reality so hard here. The Bush tax cuts resulted in an estimated loss of 2.5 trillion $$ to the treasury over their life span. The two wars together cost I think 1 trillion. The “free spending” Democrats, and this is a fact you can look up, were in the minority in the House for Bush’s first 6 years, and a minority in the Senate for all but 1 year. In other words, they were not free to spend.

            And Rupert writes: “Well, lets also not forget lying about the debt in the fifties. ”

            This is from the US Dept of Treasury Bureau of the public Debt (Fancy that. I did not even know we had such a bureau!)

            “The American Civil War resulted in dramatic debt growth. The debt was just $65 million in 1860, but passed $1 billion in 1863 and had reached $2.7 billion following the war. The debt grew steadily into the Twentieth Century and was roughly $22 billion as the country paid for involvement in World War I.

            The buildup to World War II brought the debt up another order of magnitude from $51 billion in 1940 to $260 billion following the war. After this period, the debt’s growth closely matched the rate of inflation until the 1980s, when it again began to increase rapidly. *Between 1980 and 1990, the debt more than tripled. The debt shrank briefly after the end of the Cold War, but by the end of FY 2008, the gross national debt had reached $10.3 trillion, about 10 times its 1980 level* .

            So you see, I didn’t “lie” Rupert. Its those damn facts that lie all the time. You need to do something about that.

            “since every paper in the country went down to Florida and found no matter what Bush won. ”

            Every paper in the country? Maybe in your alternative reality. Plus, the review found Gore winning under 4 scenarios, and the NY Times found that had the famous butterfly ballots been properly counted Gore would have won.

            But hey. Its water under the bridge. Bush was a great president with at least an average economic record right? That is still your position isn’t it?

  • Anonymous

    It really is amazing how ignorant you are v-dean.

    And there’s no sign of you having any learnign curve.

    Government was minuscule in the 50s compared to the missioned creeped monster we have now.
    The massive debt and gross dysfunction at every level of government passes right by you liberals.
    Your fix? Make it bigger.

    Your dishonest, narrow minded misrepresentation of conservative approaches only serves yor own insanity.

    • Anonymous

      Yeah, if only we could go back to the way things were in the 50s. You’re funny.

  • eagle eye

    I can make little or no sense of this article. The budget WILL be cut 9%. Larry Huss wants to eliminate (unionized in particular?) workers, I guess. (If not that, then what is he getting at?)

    But he apparently doesn’t want to reduce, e.g., expenditures on schools. Well, where does he think the school money goes? Mostly to pay workers, e.g. teachers. So which is it? Do you reduce school expenditures or not? If you do, you will end up reducing worker pay (either through fewer hours worked or lower wages, take that up with the union). That is going to end up harming Larry’s dear chi-l-l-d-ren. If not, you don’t balance the budget, and you don’t get to hammer the workers. Which does he want?

    It seems to me that “conservatives” are getting what they want. To wit, reduced state expenditures. The state is indeed tightening its belt. Conservatives should feel great! Why all the complaining?

    I can’t see any point in convening the legislature to rehash the cuts. They will never agree, they will waste a lot of time when there’s little to waste.

  • surefoot

    Like Larry Huss said, everybody suffering while the public employees unions workers are still making an hourly wage and vacationing at fancy State Parks. While Mr. Huss and his family are living in a coldwater flat, eating Kraft macaroni and cheese most of the time, if they eat at all.

    • Anonymous

      The poor Huss family, they’re so underprivileged. We really should take up a collection.

  • a past and future UO student

    I hope Mr. Huss doesn’t plan to cut state college staffs. Enrollment is up sharply the past couple of years at UO and so it is at other campuses, from what I hear — I don’t have precise statistics, but I’m sure they’re out there somewhere. Hiring is lagging some, to judge by class sizes, but total employment must be rising. I don’t hear for any calls to restrict enrollment. The state colleges are kind of different from the rest of state spending, since most of the funding comes from somewhere other than the state general fund. However, they’re included in the count of the state public employees, if I’m not mistaken.

    • valley p

      Dragging facts into this debate is not going to win you any points. People here know what they believe by golly. Watch how quickly they dismiss your inconvenient fact and start calling you names.

  • a past and future UO student

    I did some checking. Mr. Huss says state employment has grown by 4200 in Kulongoski’s term. That works out to a bit over 5%. During that time, Oregon’s population grew by about 11%.

    Should we conclude that the Governor has done a good job of holding down Oregon public employee growth?

    • Anonymous

      No, because you falsely assume a necessary 1:1 correlation between population growth and government growth. Due to economy of scale, it should be possible to get more per worker out of a larger organization than a smaller one. But for some reason, governments seem to go the exact opposite of private sector organizations. Bigger governments seem to produce less per worker the bigger they get. Oh sure, the total production might go up 2%, but it takes 5% more workers to get that 2% increase.

      • Anonymous

        The student didn’t falsely assume anything from what I can see. He merely pointed out the fact that state employment and state population are not growing at the same rate. His question was not an assertion.

      • a past and future UO student

        I think the figures I cited speak for themselves, especially when the claim is that the Governor has presided over a government that has become more bloated.

        As I said, enrollment is up at UO and other state campuses. I checked, it’s 10% more or less. That means “production” is up 10%, student credit hours probably. I doubt that employment has increased that much at the state campuses. So yes, they are achieving economies of scale. It looks to be similar in other branches of government. Maybe Kulongoski is not all bad! My reading this website and checking some facts has persuaded me. You are having an influence!

        But, you make an interesting case for behemoth organizations. Perhaps it’s a mistake to have 50 states in a federal system. Why not just centralize everything to get the economies of scale? Or why have the Fortune 500? Why not have everything run by a federal cabinet agency?

        • eagle eye

          They must be doing something right at UO if they have taught you this kind of rhetorical demolition. Pretty good what you did with the author’s own statistics. Ouch!

  • Alan Grosso

    BRAVO – AS ROME BURNS, DEMOCRATS FIDDLE AND LIE. What a disgusting set of “leaders”

  • Tough Love

    State & City Budgets are stressed all over the nation with supposed one-time “fixes”. Let me tell you something … this isn’t going to be a one-shot fix. Most States, cities, & towns have a FUNDAMENTAL structural problem which MUST be addressed.

    Long ago, Civil Servant “cash” pay was quite a bit less than Private Sector pay in comparable jobs. This justified a better pension & benefit package.

    Per the US Gov’t BLS, cash pay alone is now higher in the Public Sector than in the private sector. This justifies AT MOST comparable (but certainly NOT better) pensions & benefits.

    More valuable Public Sector pensions comes from multiple sources: (1) higher formula per year of service, (2) basing pensionable compensation on the final 1 year instead of 3 or 5 years of service, (3) including post retirement COLAs, (4) arbitrary end-of-career promotions or excessive raises to “spike” the pensionable compensation, (5) allowing the soon-to-be retired to load up on overtime includable in pensionable compensation, (6) including payouts of unused vacation, unused sick days, uniform, parking, and other miscellaneous “allowances” in pensionable compensation, etc.

    In MOST Corporate Pension Plans NONE of the above are included. Why? Because the cost would have to be paid for by the employer, and none of these being really justified, employers are not foolish enough to waste THEIR money this way.

    In the Public Sector ALL, of the above are generally included/allowed. Why? Our Politicians aren’t spending THEIR money, their spending YOUR money (via your taxes) while they curry favor for campaign contributions and election support.

    Sometimes, Corporate Sector Pension Plan sponsors realize that the plan is no longer affordable, so they reduce cost via formula reductions, increases in the retirement age, etc., for NEW employees and for FUTURE years of service for CURRENT (yes CURRENT) employees. This is ROUTINE in the Private Sector and is allowed by ERISA (the Federal Law that governs Private Sector Plans).

    Just as in the Private Sector, CURRENTLY EMPLOYED workers in the Public Sector have already “accrued” pension benefits for PAST service. To this will be added benefits for FUTURE years of service. However, in the Public Sector (and there are variations from State to State) the ability to reduce the pension formula for FUTURE years of service for CURRENT employees is “questionable”.

    Of course, the employees and their Unions say it cannot be reduced for anyone already employed (even for those very recently hired). There are many variations, e.g., NJ’s Office of Legislative Service said that cannot be changed only for current employees who already have 5 years of service. In some States, the rules that govern such potential Plan changes are in the State Constitution. In others, in Laws/Regs., and in others via Court Case law.

    One important consideration in examining the DIFFICULTY in reducing pension for (FUTURE years of service ONLY) for CURRENT employees is that the legislators, judges, and staff (such as in the NJ example above) that “opine” that such reductions are not allowed are THEMSELVES participants in these same pension Plans and would be negatively impacted by such formula reductions.

    Hence, they are hardly disinterested parties, but come with a built-in conflict of interest. These persons should not be making decisions that favor THEM (as beneficiaries of their own decisions) but add to the taxpayers’ burden.

    The financial situation across the country is getting more dire, and the ROOT CAUSE must be addressed. Stated another way, we must once and for all, address the STRUCTURAL imbalance between income and expenses.

    Way too much focus has been placed on the government entity’s neglect to “fully fund” the Plans. This is certainly true (to varying degrees across the nation). What is often given short-shrift is the “expense” side of the income statement. No one ever says …gee … funding a VERY generous pension plan is VERY expensive, and then moves to the logical next questions, that being, is it too expensive BECAUSE it is too generous and perhaps we such make it less generous.

    But what exactly is “too generous”? Well, given that “cash” pay in the Public Sector now exceeds that of the Private Sector in comparable jobs, maybe a Public Pension Plan that is more than MARGINALLY higher is too expensive.

    Above, I enumerated 6 items which make Public Sector Plans more expensive. Few people not educated in pending funding understand just how VERY valuable (and hence EXPENSIVE) these differences are. One thing is certain, the Public employee Unions know. That’s why they fight tooth-and-nail to stop changes.

    Here is an accurate comparison of the costs of Public vs Private Sector retirement packages (pension plus retiree healthcare, if any) …. The value (i.e., cost to purchase the pension/benefit package) at the time of retirement of the employer-paid (i.e., Taxpayer) share of the typical (non-safety) worker’s retirement package is 2-4 times that of employer-paid share of the comparable (in pay, years of service, and age at retirement) Private Sector worker, and that multiple increases to 4-6 times for safety workers (policemen, firemen, corrections officers, etc.).

    I’ll bet you had no idea that this HUGE disparity exists. Given that it does, and given that Public Sector “cash” pay by itself is higher, is it surprising that States, cities, towns are being so squeezed to fund this? Not at all.

    So what is the solution? Of course Civil Servants deserve “fair” pay as well as “fair” pensions & benefits, but “fair” should mean COMPARABLE to what their Private Sector Taxpaying counterparts get. Right now, this is anything but true.

    The EXPENSE side of the income statement has been neglected far too long. To reach a “structural balance” we need to reduce current pensions (as well as retiree healthcare subsidies) in the Public Sector to a level comparable to that of the Private Sector. A few more progressive States & Cities (or perhaps, those in the greatest financial pain) know they must look at this and are beginning the baby steps.

    But the BIG problem is the conflict-of-interest conundrum that reducing pensions for CURRENT employees will (in many cases) reduce there own pensions. So, they ONLY propose plan reductions for NEW employees. To be fair, this may be happening not because they just “cave” on addressing such reduction, but because they really believe it is not possible.

    A disinterested party might look a bit harder. Perhaps we need to get opinions from outside this circle, e.g., from university scholars. Or perhaps challenges should be brought in the Federal Court system where the conflicted parties are no longer the decision-makers.

    Not addressing the huge cost of future accruals for current employees is wishing-away current financial reality. The dire financial problem is here NOW. Reducing pensions ONLY for NEW employees will have little impact for 20-30 years until they begin to retire. We will never make it. But also, given that most (objective) observers agree that current pensions & benefits are overly generous (compared to Private Sector plans … while appropriately taking into account compensation levels), why should we CONTINUE to layer on MORE excessive pension accruals?

    It’s been said that the first step in getting out of a big hole is to STOP DIGGING. Well, every day we allow the current plan to continue, the hole gets deeper.

    Somehow we need to find the way to reduce pensions (not for PAST) but for FUTURE years of service for CURRENT employees. That, along with a significant reduction in the retiree healthcare subsidy just MAY save us.

  • Nobama

    Everything should be equal, isn’t that what the Democrats tell us.

  • Wordpress Themes

    Amiable post and this mail helped me alot in my college assignement. Gratefulness you seeking your information.

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Catalyst through daily email updates:

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

Twitter Facebook

No Thanks (close this box)