Just two weeks ago, the State Economists were making headlines for Oregon’s surging tax revenue as it was exceeding expectations.
Personal income tax collections are up $136 million (6%) from the expected forecast. Business income tax revenue is up $62 million (32%) from the expected forecast. Lottery revenue is up 5%.
Now we are told Oregon has a $623 million shortfall. How can Oregon have surging revenue during a time of record breaking national economic growth? How can they have a shortfall after they just raised a billion in new taxes last year? The answer is over-spending. It shows that no economy known on earth can keep up with political over-spending and waste of our tax dollars.
Contributing to the shortfall is the state’s $24 billion PERS pension system deficit which is draining budget dollars from every part of our state and local government. Another cost driver has been the Affordable Care Act (Obamacare) which failed to keep health care affordable. The Affordable Care Act included 20 new or increased taxes along with a mountain of regulations. To the average person it was easy to see why it raised costs and rather than reduced. The other problem of Obamacare was that it was front-loaded with subsidies to attract state participation. Now that those subsidies are declining on schedule the participating states are now facing the true and actual cost of Obamacare. It is more than they can handle. The math was always there to show that this was a bad deal but politicians traded a cheap subsidy deal today for an unfunded crisis tomorrow. Tomorrow is here.
There are also ballot measure spending mandates and $154 million in government raises that are also driving the cost shortfall. The state and local government hiring spree of the past (sometimes as high as 17 new employees hired every day) has now made it more unaffordable to retain them today.
Because of over-spending we have both a shortfall and a pension crisis amidst an over-performing economy. How bad will it get when the economy slows down?
This is why the liberal politicians and Gov. Brown are brewing up billions in new taxes for 2019 to make you pay for their lack of discipline, restraint and for their bad math.
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