By Taxpayers Association of Oregon
Oregon Governor Tina Kotek released her big 400-page budget plan for Oregon.
We de-code some of the politician language to show how they mis-read Oregon’s problems.
Kotek Budget: “… build and maintain a homeless services system that can prevent new families from falling into homelessness …” (p.3,4)
Taxpayers Association: Kotek’s plan is to spend up to $50 million paying people’s rents — so they do not become homeless. It was Kotek’s 2019 rent control bill that artificially pressured landlords to increase rents while other landlords left the business entirely. Having landlords drop out of the rental business caused the rental shortage which drove up rents even higher. The proof, Cascade Policy reports was when Portland passed their own rent control in 2017 and then saw rental homes availability drop 14%. As availability declines, rent prices go up. Also, after rent control, evictions surged 43%. Some of this was the pandemic, but another part was rent control. This was entirely predictable when government interferes with an industry. Now all of us taxpayers have to pay up tens of millions of tax dollars to remedy the problem Kotek created. Coincidentally, Venezuela has rent control. Why are we modeling our rental laws after Venezuela?
Kotek Budget: “I am proposing a $1.02 billion investment in affordable housing production and preservation” (p.4)
Taxpayers Association: Kotek and the liberal leaders have raised taxes so much, while at the very same time blocking land to build new houses, that it will now cost us taxpayers one BILLION dollars to fix the problem they created. Consider the tri-county area where the METRO government has been raising property taxes in order to buy up unused land (vastly reducing supply) and then setting the land aside to remain vacant and unused by anybody. Oregonians are literally being taxed to take land off the market. That drives up cost.
Kotek Budget: “For our public schools, children have the right to an education that will set them up for a lifetime of opportunity…I am proposing $100 million for evidence-based, targeted literacy strategies and $50 million for summer programming” (p.4)
Taxpayers Association: If Kotek believes children have a right to education, then why does Kotek block the formation of charter schools? There is an artificial 3% cap on charter schools that government unions enacted to block any rivals to their traditional government run schools. Kotek doesn’t need to spend $150 million trying to figure out what will work, we already have it — charter schools! Also, Kotek address Oregon’s graduation rates (among worst in nation) by lowering graduation requirements. Kotek made it worse.
Kotek Budget: “The labor market is cyclically tight due to a strong economy, and structurally tight for demographic reasons as the large Baby Boomer generation continues to retire.” (p.10)
Taxpayers Association: Kotek says Oregon’s labor market is “tight” (tight means labor shortage, she dare not utter the words least it make Oregon look bad). The labor shortage crisis is because Oregon continued to pay people more to not work than to return to work during the pandemic. At least twenty four states pulled away from this free federal money spigot of bonus jobless benefits because these states realized it was draining their labor pool. Oregon, however, remained on the program at their peril. Utah made those jobless receiving federal funds, take a simple job skills class. Immediately 30% of Utah jobless went out and found jobs rather than being forced to take a short class. For Kotek to blame our labor shortage on Baby Boomers is just wrong. Other states had seniors retire early, but they found a way to get people back to work. Oregon was rated #44 of 50 states on Covid job recovery. Portland was rated #60 out of 62 for job recovery. Why would anyone work in Portland when you are handing out to the homeless free $500 debit cards, 25000 free tents and three million free drug needles? Oregon lets people stay on welfare for 5 years (longer than other states).
Kotek Budget: “Large metro areas nationwide are lagging. The impact of working from home and loss of business travel during the pandemic is disproportionately impacting big cities, and their urban cores in particular. Population loss has followed as workers are now able to live farther afield.”(p.12)
Taxpayers Association: If you listen only to Kotek you will think that Zoom meetings helped cause people to flee cities. For starters, the CRIME WAVE helped drive people from Portland. The same CRIME WAVE drove people from big cities in New York, California and Louisiana. A crime wave (*nowhere mentioned in her speech *). Also, people fled cities to live in low-tax, low-regulation states. Look at the chart below:
The highest cost of living states are (gasp) mostly liberal states!
Kotek Budget: “…high interest rates are impacting new construction activity as affordability is curtailing demand and slowing household formation.” (p.13)
Taxpayers Association: Government adds nearly $100,000 in permit fees and over-costs to a house before a single shovel is laid or a single piece of wood is bought. As we stated before, The Oregonian had this great story “…the Oregon Senate Committee on Housing and Development invited a slew of service providers, developers and other housing industry professionals to share their ideas on how to ramp up development.The speakers, all from different areas of the industry, had one common thread: to fix the housing crisis, Oregon needs to break some rules. Ernesto Fonseca, the chief executive of housing nonprofit Hacienda CDC, said the state was able to keep Oregonians housed during the pandemic emergency by sidestepping regulations that would have otherwise held the state back.“ If we don’t take the same approach for housing and forgo many of these regulations that are keeping us behind, we’ll never catch up,” he said.” The article quotes a success story in the City of Bend where one building project required the City to dedicate a City staffer for a job where for the sole purpose was to help the builder rush through the byzantine permit process. As noted, “The city designated a staff member to speed up permits and inspections. And through an emergency declaration approved by the Legislature, the company did not have to hold a customary public comment or appeals process.” It took the benefit of an existing EMERGENCY ORDER in order to help move this building permit along. Kotek’s budget has this answer as she plans to form a new Housing Production and Accountability Office to help speed housing. If Kotek wishes to speed up housing, you need to eliminate taxes, fees, red-tape and such. It requires no new bureaucracy or cost to eliminate a tax or rule.
Kotek Budget: “Looking forward, the only way Oregon’s population will grow is through net migration. For the first time in recorded history, the number of deaths in Oregon now outnumber births, meaning the population is experiencing a natural decline.” (p.14)
Taxpayers Association: Here is the dirty secret with why Oregon is experiencing near-record population problems. The demographics of people leaving Oregon are mostly young people and families with kids. The schools are grossly under-performing and nationally rated as such. The taxes are among the highest in the nation. The crime wave makes it unsafe to raise a family. Kotek says we must depend on “net migration” to save Oregon. This is an admission that Oregon is anti-family. The people moving into Oregon are older citizens fleeing California. Kotek calling for the help of net migration is not a proper replacement for young families with children leaving the state.
Kotek Budget: “Oregon’s traditional corporate taxes have grown by more than 160 percent over the past five years.” (p.15)
Taxpayers Association: Wow. No wonder businesses are leaving.
Kotek Budget: “For the 2023-25 biennium, CAT revenues are expected to equal $2,577 million, a 4.9 percent increase from the prior biennium. This is a little less than half of the long-run anticipated rate of growth due to the weak near-term economic outlook.” (p.15)
Taxpayers Association: Wow again! The biggest tax in Oregon history, the Corporate Activities Tax, is bringing in less revenue than projected. That means you over-taxed your business victims. Yet, the CAT tax was designed to help our schools, but Oregon schools saw a 30,000 student decline. Oregon’s taxes are chasing away businesses in order to fund schools that are chasing away students. When will Oregon stop recycling failed high taxes/big government/high red-tape regulation policies?
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