Representative Matt Wingard:5 goals to make a budget difference

By State Representative Matt Wingard,

Last week, the state economist announced that state revenues for the current budget will be down an additional $257 million, or 2 percent since the June forecast. Overall, General Fund and Lottery Fund resources are down $1.1 billion since the 2009 close of session estimate, which was used to pass the 2009-11 Budget.

Since the end of the 2009 session:
• Personal income tax revenue is down $1.2 billion, or 10.4 percent
• Corporate income tax revenue is up $42.3 million, or 5.1 percent.

Why are corporate tax revenues up? My colleague Rep. Dennis Richardson said it best:

The additional corporate taxes showing up in Oregon’s coffers likely results from increases in taxable revenues resulting from money saved by reductions in workforce, lowering wages and other costs, and retaining capital instead of investing it in rolling stock, business expansion and other tax deductible or depreciable expenditures. In short, businesses may be paying taxes on retained capital that would normally have been spent in tax-deductible ways if the businesses were growing and investing in the future.
Oregon has a jobs problem, not a revenue problem. When people are employed, they earn incomes and pay income taxes; then they spend money with local businesses that in turn hire more workers and pay taxes. Everything we do should be focused seriously on the creation of private sector jobs.

Legislative leaders continue to talk about federal bailouts. These bailouts will do nothing to solve our long-term problem. They merely perpetuate the myth that Oregon can afford its current practices and spending habits.

This situation presents us with an opportunity to think differently and to make bold changes:
• Look at privatization options, which have been successful in other states to the tune of hundreds of millions of dollars in savings.
• Begin to implement performance-based budgeting where each program gets reviewed every four budget cycles for necessity, efficacy and efficiency.
• Establishing an independent audits office – which requires no additional spending – to closely review how (not just how much) agencies are spending.

As the governor wisely, and finally, said – it’s time to “reset” state government. We should start by putting a hold on all spending for new projects and programs established in the last budget.
• This will be painful to those programs.
• But we have added 3,000 state employees to the system in the last few years (which equals $168M worth of payroll costs for the remainder of the biennium).

Here are just a few examples of how we can make tough decisions and start saving money to protect schools days, provide seniors’ their medicine, and avoid letting prisoners out early:
• $71M can be saved by asking state employees to contribute to their health insurance at the same level teachers already do.
• $53M can be saved by having state employees pick-up just 3% of the 6% “employer pickup” (which is supposed to be an employee contribution).
• $82M can be saved by suspending the Business Energy Tax Credit (BETC) which subsidizes solar panels and windmills.

  • Bob Clark

    It would also be nice if Oregon state government would stop heavily subsidizing Portland cityhall’s boondoggles like the Milwuakee light rail line (some $250 million in state lottery funds). Our leaders are whacked or corrupted if they can’t prioritize education (& a diverse set of educational resources, not just public) over a money losing light rail boondoggle. TriMet bleeds red ink even as it cuts bus service, and yet continues pursuing new “toys” like Milwaukee light rail. This state’s governance is messed up royally.

  • Anonymous

    You can “ask” the state employees to take these pay cuts. What are you going to give in return to induce them to agree? Maybe suspend the corporate kicker?

    • Steve Plunk

      I would induce them with layoffs. Why can’t they tighten their belts like the rest of us? Why must we give up something to make them happy? That’s the entitlement culture of government workers these days, we’ll give something up if you give us something in return. Problem is there’s nothing left to give. They took it all.

      • Rupert in Springfield

        Well said Steve.

        Public employees didn’t give anyone anything backed when they took out ads “asking” business to pay more for the filing fee under 67.

        Public employees didn’t say what they would give as an inducement for higher taxes under 66.

        No, they just said you give up your money and we get raises.

        Enough already. Public employees make more than anyone else. It’s time for them to start giving back. And no, that doesn’t mean cutting an expected raise by some amount. That means actually getting paid less for the same amount of work – simply the same thing they said was fair under 66/67.

        • valley p

          “Enough already. Public employees make more than anyone else. ”

          On what planet? Public employees make more than private doctors, lawyers, engineers, developers, business owners, corporate executives, and the idle rich (Paris Hilton)? Since when? Or does “anyone else” simply exclude everyone else who makes more than public employees?

          Public employees have on average much higher education and training levels than do private sector employees. In modern times, higher education and training mean higher pay. Measured apples to apples public workers do not earn more than their private sector equals. I know this from personal experience. I earn more in the private sector than I did in the public. Same person, same education, same training.

          Cut the pay and benefits of public employees and you will end up with lesser quality public employees. Any private sector business person who relies on talent would recognize this. Catalyst readers, who think of themselves as business savvy, do not.

          Instead of trying to lower some peoples wages, you should be figuring out ways to raise other people’s wages. Because unless we do that, with 75% of the economy dependent on consumers, we are sunk.

          • Steve Plunk

            Total compensation is on average higher than the private sector. Training was paid for by the taxpayers and while education level may well be higher than average, productivity is likely much lower. I don’t see how we can get a much lower quality. That stereotype of DMV clerks is there for a reason.

            The key to raising private sector wages is lower taxes. Lower taxes means less money to pay the public sector. I seldom hear any concern on the part of public sector workers for the private sector so why should any of us be concerned for them? They have brought on this class warfare themselves.

          • valley p

            “Total compensation is on average higher than the private sector. ”

            Not professional level, apples to apples it isn’t. At lower levels, with less education and training, I agree public sector workers make more because they are unionized and the private sector is not. But at professional levels one does not make more in the public sector, even factoring in all benefits.

            By treating all public sector workers the same you will end up with the lowest talent professionals in the public sector. if that is what you want, fine, but it isn’t what I want.

          • Anonymous

            For guys that got beaten as badly as you did on the recent tax measures, you sure don’t seem willing to try to learn from your mistakes. You must enjoy getting thrashed. I’m beginning to think you deserve it again. And a nasty, resentful like you deserves to fail in business. I feel sorry for your workers.

          • Rupert in Springfield

            Well, I figured you wold punt on the kicker question. No surprise there.

            I dont know who you are calling resentfull. I just simply ask if you would be willing to give up what you are asking every mom and pop busisness (most corporations are type S) to give up.

            you want them to give up the kicker, would you be willing for government workers to do the same?

            The answer is you are not.

            So that settles the question, both on what you ask of others but not of yourself, as well as your credibility on the issue. You aren’t interested in fairness, since you ask more of others than yourself.

            Thank you.

          • Steve Plunk

            Nasty and resentful? We come to place designed to discuss politics, discuss what’s wrong in Oregon, and you say it’s nasty and resentful? I guess we should just talk about puppies and rainbows then.

            What exactly should we learn from the recent tax measures? Just hand it all over to the state so they can waste it?

            I’ll show you how nasty I can be, have a pleasant day. That’s all I got for nastiness.

      • Anonymous

        Well, it be must be nice to be so self-pitying. And so stubborn. If the corporations can’t give up their idiotic kicker, I won’t expect the public workers to be any more reasonable. You deserve each other!

        • Steve Plunk

          I have pity for the state, not for myself. Who wouldn’t feel sorry for Oregon after what the public employees have done to it.

          Facts have a way of making someone stubborn. That silly kicker isn’t a give away program. It was put in place to curb the legislature from spending windfall revenues. The legislature still didn’t learn and now we have one fiscal crisis after another.

          Deserve each other or not we are certainly stuck with each other.

          • Anonymous

            Yes, the Oregon business sector has some sad specimens. Even if the public workers are as bad as you say, you deserve them. But fortunately, both groups are better than what is represented here by “business”.

        • wayne Brady

          We should not give up the corporate kicker or the personal kicker. The government doesn’t need any more money. They have to restrict their functions to those that should be performed by government.

          Government spending has been growing at a rate well above inflation plus population growth. It should not.

          The legislature keeps adding new programs every session and the government agencies just build their empires.

          • Anonymous

            Well, don’t expect the government employees to be very receptive.

            As to

            “Government spending has been growing at a rate well above inflation plus population growth. It should not.”

            It’s the growth of the economy, …. won’t finish the sentence.

        • Rupert in Springfield

          >Well, it be must be nice to be so self-pitying.

          Looking after ones wallet to make sure public employees don’t rob you blind is hardly self pitying. It is simply awareness you are being robbed.

          >If the corporations can’t give up their idiotic kicker,

          Im sorry, corporations already gave something up, its called measure 67.

          Now its time for public employees to give something up, and no, that doesnt mean forgoing a raise that you then get back in the next negotiating session. We already saw that little shell game under the PERS guaranteed return scam you guys ran.

          That means public employees taking an actual pay cut, just like they asked every mom and pop store to do under measure 67. Fair is fair.

          If you feel this is unfair and you should get something when you give something up then can you please tell us corporations got when they were asked to give something up under measure 67? Or does your kind of fairness only apply to public employees?

          Failing that, if you are interested in tit for tat, can we assume that if you want parity, then public employees will give up their “stupid kicker” ion exchange for asking corporations to give up their “stupid kicker”?

          I doubt fairness is what you are truly after. You just simply want as much money as possible for public employees and screw everyone else. Well, you might get your way, public employee unions are very powerful in Oregon. They have reaped the harvest while everyone else has suffered to pay for it. However I think people are getting a little tired of belly aching from a bunch of fat cats who all got raises in the middle of a recession.

          It’s a testament to brute force and political clout, and you can be proud of that, but please, don’t insult peoples intelligence with talk of fairness. We know thats the least of your concerns.

  • Wayne Brady

    I think part of the increase in revenue is the retroactive provision in the new taxes in Measure 67. Businesses cannot change what they already have done. Watch out for the 2010 tax revenue. Businesses will adapt.

  • Jim Ray

    Any governmental body, police activities, fireman’s charities, school athletic fund raising, etc. are told when soliticiting;

    You thought it was so damned funny when 66&67 passed NOW I laugh at you and say “screw you”. Take your tin cup AND BEG to someone who laughed with you!