Legislative leaders making budget crisis worse by inaction

By Dave Lister
Guest Columnist for The Oregonian

Imagine your boss calls you in one day and tells you that, due to the recession, all employees are going to have to take a 10 percent across-the-board cut in pay. Imagine that you then go home and draft a letter to your mortgage holder, your telephone provider, your electricity provider, your home heating provider and your cable company telling them that, until further notice, you will be short-changing their monthly bills by 10 percent. Sound ridiculous? Of course it does. Faced with that situation, you’d have to prioritize. Short-changing your mortgage is not an option. Your utility bills have to be paid in full. What you’d do — and what many of us have done — is forgo vacation, or dine out less often, or drop the premium channels on your cable bill, or maybe even drop the cable altogether. You’d go through your budget, item by item, and you’d prioritize.

Unfortunately, Gov. Ted Kulongoski and the Democratic leadership in Salem have turned their back on that simple fiscal discipline. After discovering the state budget is once again coming up short, this time by nearly $600 million, they’ve chosen not to prioritize.

Rather than call a special session of the Legislature to examine priorities and do what any average wage-earner would do when confronted with a salary cut, the governor has simply instructed all state departments to cut their budgets by 9 percent. In effect he’s chosen to deal with the problem with a meat axe instead of a scalpel. By doing so the governor and the legislative leadership have ensured that the greatest number of Oregonians will feel the pain. The decision seems lazy and foolish, perhaps even intentionally so.

State Rep. Scott Bruun, a Republican who will be challenging Democratic U.S. Rep. Kurt Schrader in November in the Fifth Congressional District, sees it as an abrogation of responsibility.

“The governor can, and should, call us into special session,” Bruun said. “This is, after all, a matter of priorities. We have to be honest with ourselves and acknowledge that not all government services are equal. When we treat them equally, and cut them equally, we are not only hurting the taxpayers, but are failing to do our duty to them.”

State Rep. Matt Wingard agrees.

“I don’t think most Oregonians would look at all the state’s budget items as having equal priority,” Wingard said. “Why would we cut funding for schools and services for our most vulnerable citizens while still providing tax credits for solar panels and windmills?”

I asked Bruun why the Democratic leadership is opposing a special session.

“I think they are avoiding responsibility during this midterm cycle,” he replied, “and they are holding out for another federal bailout.”

Of course, nearly all the states in the country are in financial trouble, and nearly all are hoping for federal bailouts. But do we really want the nation to add trillions more to our Bank of China credit card in order to fund cultural trusts and green-energy initiatives at the same level as schools and public safety? I don’t think so.

The final irony is that Oregon taxpayers were recently convinced that approving tax Measures 66 and 67 would solve our budget woes. I, for one, am not surprised they didn’t. We’ve raised tobacco taxes and tobacco tax revenue has gone down. Why would we think increased business taxes wouldn’t cause business tax revenue to go down?

The governor said he didn’t want to call a special session because it would result in partisan wrangling. He’s right. But when has there been a better time to wrangle over our state’s spending priorities?

Dave Lister is a small-business owner who served on Portland’s Small Business Advisory Council.

http://www.oregonlive.com/opinion/index.ssf/2010/06/cutting_state_spending_we_need.html

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  • Ron Glynn

    Plainly, the Democrat Lawmakers do not have the guts to go into Special Session to make the selected cuts. They do not want to piss off their supporters, the Public Employee Unions.

  • valley p

    Republicans call for cuts in spending for years. Then when cuts happen they whine. Is there no shame?

    • Ron Glynn

      The problem is that Republicans see the cuts being made in the wrong areas. For instance, one of the things on the chopping block under the Governor’s 9% across the board decision(Under the law, he has no choice and must make across the board cuts) is a program for Seniors. It is a 40 year old program to provide Seniors with help so they can stay in their own homes for a long as possible. A cut like that is outrageous and a program like that should not be eliminated.

      Also, in response to Kulongski’s directions, the Department of Corrections prepared a plan to close 3 prisons and let out a thousand prisoners early. Kulongski did not like that plan.

      Clearly, Democrats and Republicans need to meet in session to make responsible cuts. Clearly, Democrats have the most to lose due to the political climate in Oregon and America. Being reelected in not the most important thing. The most important thing is for all of them to do what is right for Oregon. Some Republican will make choices that some of the voters were be upset with. All the legislators need to show some courage and leadership in this crisis time.

      • a retired professor

        So you think the “seniors” programs and the the prisons should be protected. Others will think that K-12 schools or other human services should be protected. (Personally, I’d put services for the seriously mental ill first.) One thing they always do is cut higher education when they have the chance, then raise tuition. You can be sure a special session would raise taxes. I see little chance that the legislature would reach a good decision on priorities.

        • Ron Glynn

          Professor, as a graduate of 3 Oregon Institutions of Higher Learning, I think Professors are overpayed for the little work they do. In fact, I had one of my professors, a department head tell me it was ridiculous the amount of money he was getting paid for the work he di. If I was in charge, I would go into the University budgets and start swinging a meat axe. K-12 is a whole lot more important than the colleges in my opinion.

          • a retired professor

            A fairly typical Oregon attitude about higher education. (More common among the Democrats, by the way). It’s no wonder Oregon’s three large public universities are 2nd, 3rd, and 4th tier, UO, OSU, and Portland State, respectively in the U.S. News rankings of “national universities”.

            You may think professors in Oregon are overpaid, but the national market disagrees with you.

            I don’t believe your story about the supposed department head. I don’t know any department head (at UO) who would say such a thing, and believe me, I’ve known quite a few of them, from many departments.

            If you applied for a job in my department, and you were interviewed, if you expressed the opinions you have about the work load, you would not have a prayer of getting hired.

            One more thing: if you really think Oregon higher education is so overpriced, why in the world would you get three degrees from Oregon public universities?

            I don’t believe your story, and if it is true, it just shows how mixed up you are.

            Anyhow, your state spending priorities would be different from mine. Except that I almost think it would be better if the state eliminated what little support it gives higher education, and just let the various campuses go off on their own.

          • Blow My Horn Professor!

            As long as Universities have CRAP programs like “Wimmen’s Studies”or “Chicano Studies” you won’t convince anyone that college teachers aren’t overpaid and that dozens of pointless programs can’t be eliminated.

          • a retired professor

            I’m not a fan of those programs — I was in the natural sciences myself, and anyhow, I don’t care for them — but they wouldn’t exist if there weren’t enough students who want to take them. They’re not necessarily high cost programs, either. Tell the students they shouldn’t be taking that stuff. You know what, there are plenty of people who would be happy to tell other students they shouldn’t be taking ROTC, or business, or forestry, or natural science, for that matter. Go Blow their Horns!

            Anyhow, what I wrote still holds. The story about the department head is just pure bull, is my bet. Being a department head is stressful, grueling work — that’s why most people don’t want to do it.

            Another thing, no department head in his right mind, even if he did have the attitude you describe, would say that to a student. There’s too much potential for it to lead to trouble.

  • Rupert in Springfield

    This is ridiculous.

    Look – If Salem had any sense of priorities they would have addressed this long ago. They wouldn’t have been spending like maniacs.

    The simple fact is that it is clear we have leadership in Oregon that has been in denial about the economy. Thus Ted being surprised revenues fell during a severe recession.

    Sorry – Prioritization should have been done long ago. Everyone knew Oregon’s growth in government was unsustainable. The leadership did nothing but bloviate about the Green Jobs Genie that would magically establish a tax base to pay for the idiocy that has been piled on year after year.

    Now we are supposed to believe that those who did not prioritize, those who hired government workers by the truck load, instead of making cuts when the economic situation was obvious, should be trusted?

    Sorry – The fact of the matter is that given the lack of prioritization to prepare for this situation, it is clear Salem’s priorities are not in line with reality.

    Therefore there is no reason to think a special session will somehow magically bestow economic sensibility on a legislature that has acted utterly irresponsibly in the past.

  • Criminal

    Across the board cuts are the best way to make them.

  • eagle eye

    Is Dave Lister really so sure the Democratic-controlled Legislature would adopt priorities that would agree with his?

    From his point of view, across the board cuts might be the best deal that might be feasible. A special session could be much worse.

    Sometimes, it’s better not to get what you wish for.

  • Rupert in Springfield

    Gee, and I wonder if the legislature prepared for economic growth numbers being revised downwards?

    I mean we all saw that coming right?

    BO Co. revising economic numbers down, usually on a Friday so no one will notice, is so par for the course.

    So instead of the lousy 3% growth rate, we actually had 2.7%

    During a steady economy thats not bad growth. If you are coming out of a recession, when growth is usually rapid because you are coming out of a trough, its anemic, and thats being generous.

    Ill bet that would be a huge suprise to Salem.

    • eagle eye

      Why are you complaining?

      When the State underestimates revenue, you get your kicker.

      When the State overestimates revenue, you get your budget cuts.

      You should be deliriously happy now!

      • Steve Plunk

        Eagle I get the distinct impression you believe conservatives enjoy seeing the state suffer, that we love it when budgets are forced to be cut and programs slashed. It’s not that way at all.

        Conservatives like to see consistency in the government. Known quantities that provide stability and services on the appropriate level. That stability leads to a better business atmosphere and sustainable economic growth lead by the private sector rather than the government sector.

        Conservative take no pleasure in this nonsense other than holding out hope lessons might be learned by the Democrats who have lead us down the path of over spending. A simple lesson they should all be learning yet for some reason never do.

        No Oregonian should be happy about the failure of government. Like it or not we have all invested in Salem and our leaders have run the state government into the ground.

        • valley p

          “Conservatives like to see consistency in the government. ”

          So do liberals, though our version of what that consistency adds up to is a bit different. But when the national economy goes from crash to boom to bigger and longer lasting crash, and state revenues are tied to that national economy, then when things go bad the government has to cut. How many times have conservatives said words to the effect, “we have to tighten our belts so they should have to tighten theirs.” OK. They are tightening their belt. *Be happy* .

          You maintain the problem is “over spending.” If that is true then you should *be happy* now because state spending is apparently back to 2006 levels. So you should be taking pleasure from this event. It is fulfilling what you have been arguing for, less spending. *Be happy*

          “No Oregonian should *be happy* about the failure of government”

          Why not? If you entire political philosophy is based on government being the problem, as Ronald Reagan so artfully expressed, then why wouldn’t the failure of government make you happy? If the whole point is to have less government, then why not rejoice? *Be happy*

          You argued forcefully against Ms 66 and 67 on the basis that the government did not need that money and should just cut itself down. Now it is cutting itself down. You guys should be throwing a party instead of complaining about Kulongowski’s actions. Don’t worry so much or shed crocodile tears over 9% cuts to state services. *Be happy* . It is what you have always wished for.

          And if you are really lucky, the economy will stagnate further and more cuts will be made a few months down the road or next year. The Republicans can get into power and really get serious about cutting things. *Be happy* .

        • eagle eye

          Yup, almost right — I think many of these people enjoy seeing the state government suffer, even if it hurts the state. They (you) certainly have a deep and abiding hatred of government and government workers. I think that goes a long way to explaining why you are so unsuccessful in electoral politics, in Oregon.

          The successes have been in restraining property taxes, but that was all a dozen to twenty years back.

          There has also been more recent success, sort of, in restraining other tax increases. (Though the recent 66/67 increases were a major setback.)

          The successes have all been of a negative sort — keeping taxes under control.

          But people don’t trust the Republicans or conservatives to run the government. Precisely because they believe or at least strongly suspect the R’s and c’s really aren’t interested in making government work, they’re more interested in discrediting government.

          I can say this as someone who has actually supported most of the tax restraints (except the kicker); who is, at least nominally and for now, a registered Republican.

          You can say I’m full of beans, but look at the election results. Sure, you can blame it on the unions, but that’s just making excuses and refusing to see reality, as far as I’m concerned.

          So, “Oregon has a spending problem”, we keep hearing. Well, the “problem” is going to get a good deal better. I really think you guys should be happy.

          Of course, the public employees aren’t all lining up saying “Give us a 9% pay cut, we want to make up the budget deficit.” So, now you have your opening to try to break the unions.

          • Steve Plunk

            Eagle, I would characterize my feelings as disgust rather than hatred. And no, though we disagree on some issues I know better than to say you’re full of beans, you’re a smart guy.

            I’m going to stick with my thesis that public employee unions are a big part of the problem. The evidence is convincing that they are a problem across the country. Not an excuse, a reality. More importantly the culture of government is a problem.

            While breaking the unions would be nice for now I would just like to see somebody play hardball when bargaining with them. They give away too much, too easily.

            valley p., you just annoy me. If you had something worthwhile to say it would at least give me something to think about.

      • Criminal

        I’ll be happy when PERS is reformed to a sustainable level , along with public employees pay and benefits.

      • Rupert in Springfield

        Why are you complaining?

        Well, that would depend on what you are claiming I am complaining about.

        Since you don’t say what you are under the impression I am complaining about, and I raised several issues, there isn’t a whole lot to say to this.

        What are you saying I am complaining about?

  • Ron Marquez

    …..”the governor has simply instructed all state departments to cut their budgets by 9 percent. In effect he’s chosen to deal with the problem with a meat axe instead of a scalpel.”…..

    Which I support whole heartedly. If the legislature convenes in special session, new fees and taxes are sure to be part of any solution they come up with.

    Do the across the board cuts now and have a contingency plan for another round of cuts when future revenue forecasts come in lower than expected.

  • Rupert in Springfield

    >Which I support whole heartedly.

    As do most of the conservatives I see comment on this blog. Why the liberals seem to have such an issue with that is anyone’s guess.

    We elected lousy leadership – across the board cuts are the consequence of that.

    And you are right that a special session will only result in sleazy deal making of the kind that got us into this mess in the first place.

    Elections have consequences. We elected fools that banked on green jobs being Oregons future and spent as if that future was here. Time to pay up, pure and simple.

    • valley p

      I wonder how Oregon conservatives would explain the situation in Arizona? They have had a conservative dominated Republican legislature for years, and they have been cutting taxes for years. Their budget is in far worse shape than Oregon’s, and they continue to cut. They have taken Steve’s advice and have begun to sell off anything not nailed down. They sold the capital building and rented it back. They closed their highway rest areas. They are closing state parks. They eliminated kindergarten. They got rid of most of their tax collectors. They borrowed against future lottery revenues. The cut 300,000 poor people from state health coverage, including 47,000 kids. Parents of kids with genetic diseases like cystic fibrosis no longer get any help from the state. They are now looking at selling their prisons and closing several college campuses.

      All this and they are still $1 billion short on a $9 billion projected annual budget for 2011.

      In other words, Arizona has the government you guys want. They cut taxes just like you want us to do and their state is falling apart at the seams. To top it off, their unemployment rate is 9.6%, not much better than Oregons.

      I know Rupert. Arizona is not Oregon and I am an idiot. But other than that, do you care to explain why things are going worse in a state that follows your advice?

      • Rupert in Springfield

        Who knows or cares?

        Do you want to explain why California, which has followed your advice is in the worst shape of all?

        You are the guy always blaming Bush and Republicans for our current situation nationally. Do you want to explain why Greece, which followed your liberal plan is about to go bankrupt?

        Look – Get it through your head idiot – we are discussing Oregon here. Your lame attempts to misdirect to an argument which you think you can win from an argument you know you will lose never work here.

        Why do you keep doing it?

        Remember – Ted is your boy. He is the mental giant that was surprised that revenues were down in the middle of the worst recession anyone can remember.

        No amount of misdirecting to AZ will get you around that key fact. All your dodging really accomplishes is to make clear that you have no answer why you guys screwed up so bad.

  • Anonymous

    vp dean,

    You haven’t a clue. Just like every fool who blathered along as their state gets worse off.

    Arizona is dealing with the decades of previous goverment mission creep.
    Oregon will obvioulsy have to follow every worse state before we start to adjust.
    Perhaps when we get to Wa $9 billion hole, or Ca 20 billion hole we’ll get rid of anough of your pathetic thinking in Salem to start here?

    Indiana is way ahead of this corrective adjustment every state must take.
    https://www.weeklystandard.com/print/articles/ride-along-mitch

    Great read. He’s the kind of Governor Oregon is ripe for.

    My favorite excerpts.

    Teach them to read
    “By the time a child has finished third grade, the state has spent $40,000 and the school district has had 720 days to teach that child to read,” he said, tight-lipped. “If that child can’t read by then, there is a fundamental failure in that district. And they’ll need to remedy it. The most unacceptable thing to do is to shove that child along to fourth grade into almost certain academic failure. That’s a cruel thing to do, it’s a wrong thing to do, and we’re going to put an end to it.”
    The reporter pressed: But won’t the schools need more money?
    Daniels’s eyes got wide.
    “More than $40,000 to teach someone how to read? No. It won’t and it shouldn’t and any school district that can’t do it ought to face consequences.”

    Stop spending
    “When Daniels took office, in 2004, the state faced a $200 million deficit and hadn’t balanced its budget in seven years. Four years later, all outstanding debts had been paid off; after four balanced budgets, the state was running a surplus of $1.3 billion, which has cushioned the blows from a steady decline in revenues caused by the recession. “That’s what saved us when the recession hit,” one official said. “If we didn’t have the cash reserves and the debts paid off, we would have been toast.” The state today is spending roughly the same amount that it was when Daniels took office, largely because he resisted the budget increases other states were indulging in the past decade.”

    Immediate reform
    “The reforms began instantly. On his first day Daniels reversed an executive order signed by a Democratic predecessor granting collective bargaining rights to state employees. Union membership plummeted overnight. “I think they were happy to have the extra thousand dollars that would have gone to dues,” Kitchell said. Decertifying the public-employees’ union has spared Indiana pressures that have crippled other state governments. Unhindered by union demands, the governor instituted a “pay for performance” scheme, rewarding state employees who met explicit goals with raises ranging from 4 percent to 10 percent. The salaries of underperforming employees stayed flat. No one was fired, but every time a job went vacant a supervisor had to justify hiring a replacement. The number of state employees has fallen from 35,000 to under 30,000, back where it was in 1982.”

    Immediate benefit
    “The effects of reform showed up pretty quick too. The state Bureau of Motor Vehicles, another patronage sump that was routinely ranked one of the worst in the country, was drastically reorganized. “He likes metrics,” Kitchell said. “He likes to measure outcomes.” Every line item in the state budget has at least one objective formula attached to it to indicate how well each service is being delivered”

    Not a dime in debt or new taxes
    “Daniels got the authority to put Indiana’s toll road up for a 75-year lease and held an auction at the peak of the market. The winning bid contained good news—the price was a stunning $3.8 billion, beyond Daniels’s fondest dreams
    The $3.9 billion went into a fund that can only be used for road construction and can’t be counted against the general budget. A backlog of projects that piled up over decades has been cleaned out and hundreds of new projects approved, without a dime in debt or new taxes.”

    Obama wrong
    “That strikes me as exactly the wrong message to send to young people,” Daniels said. “He’s [Obama] got it completely wrong. Government service—nonprofits—all that’s fine and necessary. But the host can only stand so many parasites.”

    • Rupert in Springfield

      >You haven’t a clue.

      Actually Dean does have a clue. He is a died in the wool partisan who can never ever admit anyone in his party is ever wrong.

      That gets Dean into trouble quite a bit, and you are witnessing it here.

      When your starting point is always that Democrats can never do anything wrong, that everything they do is always right, you have to do a lot of misdirection to keep the focus off your screw ups. That’s what Dean is doing here.

      It’s silly, but that is what makes Dean a presence here. No matter how egregious the offense, if they have a D after their name, Dean will defend them to the last.

      • valley p

        “Do you want to explain why California, which has followed your advice is in the worst shape of all?”

        Sure. The answer is that they didn’t follow my advice. They passed Prop 13, which shifted funding for schools to the state with no revenue source. And they passed 3 strikes and you are out, which tripled their inmate population. They passed another measure that requires a 2/3 super majority in the legislature to pass the budget. They passed another measure to limit class sizes with no means to pay for that. The list of what the people passed that screwed up the state budget is quite long.

        “Look – Get it through your head idiot – we are discussing Oregon here.”

        Learn to read Rupert. I acknowledged both points. I am an idiot and we are discussing Oregon. So does that make you and idiot for bringing up California? I guess if the shoe fits….

        “Remember – Ted is your boy. ”

        That is news to me.

        “All your dodging really accomplishes is to make clear that you have no answer why you guys screwed up so bad. ”

        Yeah…actually it does provide an answer, but one you don’t understand. The answer is that this is a national recession, and even states with paltry pre-recession services like Arizona are in a financial pickle. Which means “my guys” did not “screw up.” “Your guy” Bush screwed up the entire nation’s economy, and state budgets got hammered.

        “When your starting point is always that Democrats can never do anything wrong, that everything they do is always right, you have to do a lot of misdirection to keep the focus off your screw ups.”

        Lets try that with a little bit of editing and see what happens:

        “When your starting point is always that Democrats can never do anything *right* that everything they do is always *wrong* , you have to do a lot of misdirection to keep the focus off your screw ups.

        Yeah…that works pretty well.

  • Anonymous

    dean,

    That’s exactly the rhetoric that generates the swelling chaos.

    You foolish loons don’t even recognize that your BS is nothing but saying the same thing 100 different ways.
    Just spit it out. “California and every other troubled State got that way because taxes aren’t high enough. And the only way out is to raise taxes.”

    You’re the problem.

    • jim karlock

      I wonder what % of ones income Dean thinks is appropriate to pay in taxes?

      50%, 60%. 70% OR 80%

      Thanks
      JK

      • valley p

        The answer is it depends. It first depends on what services we want from government and how much that will cost us. If we insist on being the world’s policeman, that will cost us a lot. If we want a secure retirement income for older people, we know that costs a lot. If we want everyone to have affordable health care, that costs a lot. If we want good roads and safe bridges, clean drinking water, sewage treatment, inspections of food, oversight of banks, coal, and oil companies, educated kids and adults, and a whole many other government services we tend to take for granted, then that all costs a lot of money. In modern societies it takes 40-60% of all of a nation’s income to provide these services, with the US being at the lower end and Denmark at the upper.

        So if we want all that, then factoring in ALL taxes as a percent of income, I would have a progressive rate from 0% at the low end to perhaps a 75% rate at the high end for billionaires. For someone in the median income range, I’d guess the right number is around 30-40% on all taxes paid (sales, property, income).

        In todays world, I’d say it takes about $20K a year (after taxes) for an individual to afford food, transport, housing, clothing, and other life necessities, so I would strive for 0% tax at that level and go up from there.

        How about you JK? Which services do you think we do or don’t need and how much do you think we need to be taxed to pay for them?

  • a retired professor

    Some pretty interesting proposals by Kulongoski to deal with the state financial situation long term.

    One of them is to cut higher education funding still further, by 15%. At some point, they might as well privatize or semi-privatize the whole system.

    I think this will help get passed the ingenious plan for UO autonomy and an endowment bonded partly by the state and partly paid for with new private donations.

  • Anonymous

    “One of them is to cut higher education funding still further, by 15%.”

    The Oregon University System under the control of democrats is attempting to become more like OHSU.

    The OUS is even joining OHSU in more SoWa shenanigans.
    https://www.portlandtribune.com/news/print_story.php?story_id=124708714354965800

    This is a stunning read with bizzarre quotes from a Rlegislator who thinks OHSU & SoWa is a tremendous success.

    But this story doesn’t mention that the OUS share is going to be bonding $60 million against future tuition revenue.

    But here is another $110 million the legislature approved for the SoWa debacle.

    State Rep. Dennis Richardson, R-Central Point, voted against the legislation because the funding for this SoWa building was encompassed in an end-of-session capital construction bill that included money for dozens of Oregon University System projects throughout the state. Richardson said legislators received the bill the same day they voted on it.

    “There are very few people who actually read the bills, and those that would read them, they have a hard time understanding what they say. They are very complicated,” Richardson said.

    Richardson said he actually knew very little about the South Waterfront project, but that he voted against the capital construction bill because he did not think the state should be taking on more long-term debt during uncertain economic times.

    The previous $200 million expenditure did not produce the promised public return of bioscience jobs.

    But State Sen. David Nelson, R-Pendleton, a supporter of the proposed building, said he viewed the new building as a continuation of the state’s original investment, which he considered a success.

    “From what I know it has (created jobs),” Nelson said. “OHSU is from my viewpoint one of the jewels of Portland. They

  • Anonymous

    “From what I know it has (created jobs),” Nelson said. “OHSU is from my viewpoint one of the jewels of Portland. They create a huge amount of high-paying jobs and keep us in the forefront of medial advancements. I think we should invest more money in OHSU.”