Measures 66 and 67: A Battle in a Larger War

Measures 66 and 67 are merely symptoms of a much larger problem in Oregon. It is the elephant in the living room that the state’s business and political leaders have chosen to ignore even as they fight the tax increases for the third time in the last eight years. It is the problem that they have chosen to ignore through a series of budget busting increases and a plethora of smaller tax and fee increases enacted in session after session.

It is the problem that I have been agitating against since this column’s inception in the Medford MailTribune in the spring of 2004. It is the problem that the January 15, 2010 Wall Street Journal editorial identified succinctly:

“The battle in Oregon is a case study in the political drama now unfolding in many states. Essentially, it’s about whether a state’s wealth belongs to its public employee unions or to everyone.”

The Washington Post columnist David Ignatius referred to it as:

“The political forces that generate deficits are just too strong: a Democratic Party in hock to public-employee unions . . .”

John Steele Gordon of Commentary Magazine in the October 10, 2009, editions noted:

“Public-employee unions are quickly becoming a major and, indeed, imminent threat to American democracy, but one that will be very difficult to correct.”

Dan DiSalvo and Fred Siegel of the Weekly Standard wrote:

“Public sector unions have become political powerhouses in New York, New Jersey, Washington, California, and a host of other states. They have become so powerful as to threaten the Madisonian system set up to constrain any one faction from overwhelming the public interest.”

The December 10, 2009 issue of The Economist spoke about the budget crises being faced by state and local governments:

“For years, public-sector workers have basked in an alternative reality. Nevertheless, as private-sector unions have faded, public-sector ones have thrived. In 2008 37% of government workers were unionised, nearly five times the share in the private sector (see chart), and the same share that was unionised 25 years earlier. Over that period, the share of unionised private-sector jobs collapsed from 17% to 8%. In 2009, for the first time, public workers comprised more than half of America’s union members. Democrats in particular have little incentive to anger workers, who are often their electoral foot-soldiers, and neither party wants to prod them to strike, since they hold monopolies. Those who defy unions do so at their peril. In 2005 Arnold Schwarzenegger, the governor of California, tried to curb the unions’ power. His effort was quickly terminated.”

And finally, Willie Brown, the former longtime Speaker (1980-1995) and former mayor of San Francisco noted:

“The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life.

“But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.

“Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs.”

Each speaks of the political power of the public employee unions. Several speak of the financial consequences — the increasing burden on the state and local budgets from excessive hiring and benefits. And all acknowledge the absolute subservience of the Democrats to the desires of the public employee unions.

There is corruption inherent in a process where the public employee unions bargain with the politicians whose campaigns they financed and where those politicians then use your taxpayer dollars to reward the unions for their political support. It is made more so by the fact that the same politicians have agreed to use state and local government resources to collect the very funds that are used for their campaign finances from the employees who must belong to the unions in order to remain employed.

In Oregon, over $60 million is collected each biennium by state and local governments and school districts from their employees and turned over quarterly to the public employee unions. There is little organizing effort by the public employee unions because union membership is a prerequisite to retaining employment by state and local governments and the school districts. There is little bargaining effort because all of the state, local and school district governments are ultimately run by politicians who are beholden to the unions for financing their campaigns. Virtually all of the $60 million is available each biennium for politics and the union bosses are not reticent in spending it for precisely that purpose.

The point being is that Oregon business leaders are destined to fight this tax fight over and over and over again. They have won the fight the last two times and they may well win it again this time. However, until they are prepared to directly address the financial power of the public employee unions they will never win the war. The battle will be fought repeatedly until the business community losses. Then it will be fought anew at a higher level because the appetite for growth in numbers, salaries and benefits of the public employee unions is insatiable.

The question for Oregon’s business community is not whether they win or lose on next Tuesday but rather whether they are prepared to fight the real battle and restore a political balance now badly tilted toward the public employee unions.