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Closer to Cuts
Now that the latest revenue forecast (pdf) has revealed the state's approximately $4 billion shortfall, the co-chairs of the Ways and Means committee have released their budget projections (pdf) for the next biennium. The figures were released Monday afternoon and will be finalized by the end of the session in June. School districts and other state agencies are already bracing for cuts.
Many Oregonians came out to hearings held around the state in April to let their legislators know which budget items mean the most to them. Did you attend one of those hearings? What do you hope to see in the legislature's budget? What are you most concerned will be cut?
GUESTS:
- Peter Buckley: Oregon state representative (D-Ashland) and co-chair of the Ways and Means commmittee
- Bruce Hanna: Oregon state representative (R-Roseburg) and house minority leader
- Larry Glaze: Superintendent of La Grande school district
- Jane Holbrook: Chair of the board for Morrison Child and Family Services
Photo credit: batega/ Flickr /Creative Commons
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I think this balance is achievable. At one point, our society did invest heavily in public infrastructure that created an environment in which first world industries and jobs could be created and thrive. I believe reason will prevail eventually. Right now though, I see too many ideologues on both sides unwilling to bridge the gap. The culture wars and class wars are getting in the way of problem solving.
I see Obama as someone who, if the Pelosi's and the talk show conservatives of the world don't sabotage his efforts, could bring about a neo "age of reason". Here's to hoping.
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I believe that the corporations are laughing all the way to the bank as we fight our class and culture wars. They're the ones who seem to be taking rational steps toward protecting their interests and do so in an organized way that they fund directly because they see the benefit (e.g.: money spent on lobbying gets laws past the increase profits).
Until the public chooses to become more rational and organized we will continue to be a step behind the influence of business and will only be able to vent our outrage after they've brought the ecomony to its knees--in other words, too late.
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Fatmidwesternwhiteguy says the Pentagon budget is a federal thing, which is true. But it's the same taxpayer. The more money we send to the Pentagon, the less we have for things at home.
There's nothing to stop our state and local officials from protesting. The Illinois Senate passed a resolution to bring our troops home from Afghanistan. If enough state officials were to do the same, maybe President Obama would reconsider his decision.
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Oregon's citizens will all feel the cuts and reductions to essential services like schools and public safety. Shorter school years, or even larger classes? Seniors or disabled people that can't get the services they need? Lack of police or fire-fighters?
I think most people want a fair and shared way to stop the most devastating cuts by raising some new revenue. Fair means shared among private citizens and businesses.
These solutions include:
1) changing the outdated corporate minimum tax of $10
2) Increasing the tax rates on profitable corporations (currently the 49th lowest in the nation)
3) Asking the wealtiest Oregonians to pay marginally more on income exceeding $250,000.Voting for these revenue measures will be difficult for legislators unless the public supports them in making tough choices. Let your state representative and senators know that you want a solution and ask them to support reasonable, fair revenue increases.
Here is an easy way to contact your legisaltors: Send a Postcard!
Sandy Ellis
Hillsboro chapter of Stand For Children -
Those in higher income brackets pay for most of the state budget - of course! That's how it should be. Those earning over $250,000 who feel it is unfair that they contribute more truly do not understand the lives of the average Oregonian.
And, the 2/3rds of Oregon's corporations who pay only the minimum $10 corporate income tax - shame on you!
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People who get up in arms about corporations not paying taxes should ask themselves what a corporation is, and what happens to the profit. Any profit derived from the corporation that is realized as income to a human being must be taxed!! Now, we can have a discussion about overseas income and how that money is transferred to the US and when. We can talk about corporate deductions that are used to give material benefit to individuals. But the fact that a "corporation" doesn't pay taxes doesn't make it evil.
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fmwwg,
Publicly traded corporations can have investors from all over the world that share in that income. We have no way of ensuring that we get a fair piece of it unless we tax the corporation directly. Investors that don't live in Oregon don't pay income tax here.
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If you can't afford it, do you really need it?
I live well within my budget, which allows me to save for a rainy day. I do this by planning for the future, rather than living in the now. It allows me to splurge occasionally, and buy things I truly don't need.
My needs and budget are nowhere near as complex as a small government, much less a whole state. I don't have to satisfy multiple interest groups who want my money. But I do understand the concept of civic duty, as it pertains to societal needs.
We must educate our children. We must provide health CARE (not health insurance). We must create a land use and transportation system that does not require people to purchase a car in order to get anywhere, so that people can find gainful employment without spending 20% of their income on transportation only to sit in traffic. We must focus on long term prosperity (and costs) over short term gains. These are a few of my priorities. I know they are not shared by everyone.
I work in government. I see the good and bad that comes with spending tax dollars. Some of it makes me sick what the taxpayers are subsidizing, and who is benefiting from it. Most people are too simple to look beyond their own needs and consider what is best for everyone. It's like our citizens are wearing blinders. They make decisions based on negative (paid) advertising. I'd be absolutely thrilled if people actually took an interest in their government, and took the time to learn about the issues. Thrilled!
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I would say that government is only as good as the people it represents. I'm not sure why everyone demands such a level of perfection as individuals we aren't able achieve.
Furthermore, I would encourage anyone who feels angry or frustrated to focus that energy on solving the problem. I would suggest joining an organization that champions a cause you are passionate about, meet with your representatives when they put on public forums (I've been to two already this year with a third coming up), and not only vote, but become educated on who and what's on the ballot.
Maybe we don't feel like we should have to make this effort, but if everyone tried a little harder to be engaged it would make a significant difference.
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What about cigarette taxes? Why not raise them to get revenue and to encourage people to quit. Tobacco use costs Oregonians more than $2 billion in health care costs and lost productivity, and it's responsible for almost 1 in 4 deaths in Oregon. Isn't worth increasing cigarette taxes to save money in the not so long term?
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As a student tuition increases are the last thing I can handle right now. Oregon needs me and all my classmates to get out of this fiscal crisis. If we really want to talk about solutions we need to talk about affordable and accessible universities and community colleges. If we lose students because school is too expensive and financial aid, especially for low-income Oregonians, decreases we are never going to draw new business and innovation which is what we need to rebuild our economy.
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Here is a parable. Joe owns a cafeteria. He charges $5 per person and serve 100 people a day. He budgets $180,000 for the year for food and supplies.
One day, new 50-story apartment building opens next door. Suddenly, Joe is serving 500 people a day, bringing in $2,500 a day instead of $500. At the end of the year, the government tells him, "Sorry, you have to pay back all income over your $180,000 budget, even though it cost you more than that to serve your clientele." That would be outrageous, wouldn't it? Joe would go bankrupt.
And yet, that is EXACTLY what we demand of the state of Oregon with the kicker law. More people require more services, but we will not allow the state to keep the additional revenue those people brought in. We can't borrow in bad times, and we can't save in good times because of the kicker. It is no surprise at all we are in financial trouble.
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I agree. The kicker needs to be modified. We need an effective rainy day fund, just like any household would.
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The last caller should donate more to local charities. They typically run much more efficiently and effectively compared to the government.
Also, is he single, does he have any kids? I support my whole family and don't particularly want another $500 a month going to the inefficient government.
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This is really pathetic. All these decent and caring people are fighting over scraps. More money for one humane service means less for another that's just as worthy.
As long as the Pentagon spends up to a trillion dollars of OUR money, these budget hearings are futile.
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Putting the principle aside for a moment, the Pentagon is funded by federal taxes. I believe the discussion today is about the state budget shortfall.
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What will be the affect of sending blind students to their home districts? Will they be plunked down in a classroom with 34 kids in it headed by a teacher with no training in how to teach blind students? A teacher who is already dealing with all of the other "mainstreamed" kids with special needs? Sounds like we will be dumbing down our educational system even further, further solidifying our schools position as a glorified day care center.
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Do you think that $4.8M could not be used better for more blind students then the 32 lucky attendees of the school? Why do they need to live away from their parents to be educated?
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I don't know how many blind students there are in Oregon, and I don't pretend to understand their educational needs. What I do understand is that by putting kids with special needs of all kinds into the same over crowded classrooms, we are not helping anyone. In fact, we are hurting everyone.
The premise is that we can accomplish the same thing with less money. The premise is that the classroom doesn't suffer. I reject these premises.
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I would just like to add that it's unfortunate this wasn't covered more when there were public hearings where people could way in on their priorities and needs and solutions.
I'm a social worker and don't like seeing the cuts happening. But it's like we are all fighting for the same piece of pie as the pie is shrinking. What good does that do anyone to say "don't cut this" or "don't cut this." All of Oregon's state funded programs are priorities. What we need to be asking ourselves is what are ways that we can rebuild the state's revenue because we do not have reliable revenue sources, one of the reasons Oregon is hit so hard in difficult financial times.
Alternative revenue sources the legislators are proposing are a start and a good place to start. They are proposing increasing a corporate minimum taxes, which I think is reasonable. We all pay more than $10 a year in taxes and these corporations that are making millions if not more in profit only have to pay the state $10. They should have to pick up the bill more. Also people making over $250,000 a year should have to pick up the bill more as they don't experience the ups and downs like others and can help out a little more. I still think they should consider increasing the beer tax, that hasn't increased in OVER 20 years and the consumer would only see maybe a $1-$2 more in the price on the shelf and that's because of the way the microbreweries and distributers pile up the tax for consumers. This increase would not decrease sales for microbreweries. I and many others I know will still buy their beers. Oregonians still need to really considers alternative revenue sources and this is from a native Oregonian. I'm even in support of a small sales tax...shocking but you'd be surprised who has proposed this. People you would least expect are in support of this revenue idea. Please make the pie bigger and don't fight over the same size of the pie. Republicans - I think you've gotten us into enough trouble so please don't try to make your way sound better. You haven't listened to what's happening and you continue to ignore what's happening. You think everyone can do this on their own and it's not possible. We need eachother especially in these difficulty times. It's about our community as Oregonians, not the individual Oregonian.
Thank you
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Same old same old - borrow from Trust fund leverage with federal funds to once again mimic CCC,CETA,YCC jobs programs.
I would prefer to move to a budget system where the spending is much more correlated with a given revenue source ( Police and Fire for homes and personal property based on sales/insurance insurance premium values). Actual cash collected would be reserved until released to State agencies at a future date certain and thus extending spending authority.
John Mc Cain suggested that a retreat format - be used to solve problems. Might I suggest a Cruise Ship with no cell phones and no lobbying. The Biennium budget cycle is at best always based upon a guess. A box that the Legislature/Govenor Can't escape. My impression is that nuisance issues have gotten far too much press so far.
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The $4 billion shortfall is equal to the cost of two B-2 Stealth bombers. As long as the nation spends close to a trillion dolars on war, there won't be much left for anything else.
You can say that's a federal thing, but it's the same taxpayer that foots the bill. We are part of a nation that has decided to go to war.
The Illinois Senate recently passed a resolution that calls for the US to withdraw all troops from Afghanistan. Why can't our elected officials do the same?
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Although I think that what we are doing in Afghanistan is important to our security, I don't believe we need expensive war machines, such as the bombers, to accomplish our goals.
For too long, money has been funneled toward "defense" and we now spend more than the rest of the world combined. Give me a break, that can't be necessary.
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How money will be raised wasn't clear in yesterday's Ways and Means Co-Chairs budget. As one reporter pointed out: the budget assumes $800 million from new taxes on the wealthy and corporations -- that isn't meeting budget cuts halfway, it's only meeting them 1/3 of the way.
There has been plenty of mention of an 11% rate on the income of families over $250,000. This is expected to bring in $483 million to educate our kids, run our prisons and help our vulnerable citizens. Only 1 in 60 families have income of more than $250,000. In these dire times, with nearly 1 in 8 Oregonians unemployed, it seems fair to ask more of those who are still doing so very well.
What isn't clear is why more isn't being asked of Oregon's corporations. In the 70s corporations were paying 16% of Oregon income taxes, today they pay 6%. So far, the legislature's plan doesn’t do much to address this shift. Should our legislators continued to keep Oregon’s corporate taxes low while it increases college tuition for our kids?
Certainly, Oregon’s low businesses taxes aren’t helping keep our economy afloat. We’ve the lowest business taxes of the 11 western states and the highest unemployment rate. Low business taxes have clearly not lived up to their hype.
How about a legislative goal to raise as much new revenue from big corporations as we do from wealthy families--$475 million?
Jody Wiser, Chair, Tax Fairness Oregon 503 810-6654
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An income tax at the 6.2% social security rate on income that wasn't subject to social security withholding could raise $2 billion. Even if this tax wasn't applied to investment income under $100,000, it would raise considerably more than the $500 million the extra 2% on incomes over $250,000 would raise.
It would also be harder for the wealthy to argue against this tax since it would only require the wealthy to pay the same tax rates as middle income Oregonians.
Gary
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I tend to agree. Corporations have too much influence over politicians through the money they or do not contribute. They are also well organized and could possibly take steps to refer any tax increase to the voters, postponing the law.
Perhaps it's time to think about publicly funded elections in Oregon.
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I just read the projections PDF thank you for the link.
Oregon should ask, like every household asks in hard times, why am I spending money on ____? Do I have that money to spend on ____? Am I benefiting enough from spending on ____ to keep spending?
An easy one...
Why do we have the OLCC?
It provides no value, and cost money! There should be a 100% positive cash(Tax) flow from the sale of drugs.
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In regards to your show on May 18th:
I just tried to find some of these jobs your guest was talking about. I believe he mentioned the website oregonworksource.org. I went to the website and just got redirected to a job search website like monster.com that had nothing to do with brush clearing or food bank jobs. I found a similar website worksourceoregon.com and it is state affiliated rather than for profit. I have further to slog through this site to find out if this is the right one. Could you please let me know or post the correct website to go to. I graduated from college a year ago and I'm desperate. Brush clearing, whatever I need to live.
Matt
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Matt -
It's not up and running yet but the jobs are supposed to be available through WorkSource Oregon, which is the state employment office. Here is their main website:
http://www.worksourceoregon.org/
Look for a link to the Oregon Emergency Jobs Program off the front page.
Also you might contact the Oregon Food Bank to see how they will be handling it. OFB is expecting to hire 1000 people to help with various jobs in food collection and distribution.
Best of luck - let us know how it goes.
Emily
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I am very concerned that there won't be any money left in the budget for needle exchange programs in Oregon (or anywhere else for that matter).
Aside from Obama refusing to lift the ban on federal funding for needle exchange programs (while simultaneously breaking his campaign pledge), I'm afraid that it won't be seen as an urgent public-health priority at state level. And with the states' estimated $4 billion shortfall - I'm sure there won't be a lot of room in the budget for this kind of thing - as controversial and unpopular as it's been in the past and with many other important programs to consider (education, state health care, adult psychiatric care, etc.).
I hope long-term care costs are taken into consideration. The lifetime cost of treating someone living with AIDS is enormously higher than preventing it with sterile syringe equipment at a needle exchange program. (It's been estimated at an 83% savings in some studies.) We must also acknowledge how many HIV infections can be (and have been) avoided with the availability of needle exchange programs.
Also, many NEP's provide opportunities for contact between outreach workers and drug abusers that may reduce or eliminate drug dependence as well as offer medical and social services, HIV and STD testing, detox, case management, free counseling, and other helpful resources.
With the positive cost benefit of NEP's and millions of dollars and lives saved each year I hope our state can continue to make room in the budget for this invaluable program.
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In 1990, there were about 2.5 million people in Oregon and about 1,000 people employed by Oregon Department of Revenue assisting taxpayers and enforcing revenue producing laws. In 2009, there are about 3.5 million people in Oregon and about 950 people employed by Oregon Department of Revenue. If we were to have the same ratio of Revenue Department employees to people living in Oregon, the Department of Revenue would have to hire about 400 people. The Director of Department of Revenue is asking for about 42. The Governor is creating temporary jobs. Considering auditors and collectors would pay for themselves and more, why isn't the budget allowing for the hiring of 400 new, permenant employees at Department of Revenue?
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It would behoove the Oregon Governor and its Legislature to do a complete reversal on their threatened closure of the Oregon Commission for the Blind. I am not positive who will see this or when.
Be advised that there will be a rally on the Captial steps, Wednesday next, beginning at 9 AM. I say be there, make calls, write emails.
It was proposed by my husband that some of the amazingly large salaries could be cut "just a bit," rather than jeopardize a very important segment of our society.
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AnnieEdwardsWilliams,
Do you know whose "amazingly large salaries" your husband was talking about?
Thanks,
Dave
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Charging a surtax on income over the social security cap could raise over $500 million per year. The social security tax is only collected on the first $106,800/year of earned income.
It would be hard to argue that taxing all earned income above the cap (and large investment income) at the 6.2% social security rate as overtaxing the rich since this would only result in upper income households paying the same tax rate as middle income Oregonians.
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Right on.
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But I should add....that money would go to fund social security..not a source of state income.
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I'm proposing this surtax as a state of Oregon surtax. It would not go to the federal government for social security. It would be spent by the state on state of Oregon needs including educating, incarcerating, medical care for the poor, infrastucture, etc.
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ic. thanks for the clarification.
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I hope that in the future we can use the rainy day fund effectively, so that we can avoid the kind of shortfall we're experiencing right now. Just like many households, the state needs to save for the downtimes that are inevitable. I do not agree that a sales tax is the answer. It is regressive and wasteful to implement.
In the meantime, I've noticed an increase in the number of truly expensive cars I see on the road these days, Ferraris and Maserati. Although I don't object to people spending their money as they wish, in the face of the current shortfall, I would rather see someone have to wait to buy that expensive car than to see others go without essential services such as healthcare. Does Salem have the political will to tax the wealthy in a resonable way at a time like this?
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Most of this economic crisis is due to rich folks not spending enough money, sitting on the sidelines waiting to spend their money thinking they'll get a better deal if they wait. You should walk up to the guy in the Ferrari and thank him for feeding a car salesman's family for a couple of months. By buying that car, he had to pay a luxory tax, registration fees (probably on top of his daily driver), will have it maintained at very high cost by a local mechanic, probably take it to PIR and pay track fees, etc. Believe me, Ferrari's are a far more effective way of redistributing the wealth of rich folks than new taxes.
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I think a tax that is mandatory, rather than something voluntary--such as buying an expensive car and waiting for what little stays in the local economy to trickle down--is a more simple and direct way of achieving increased revenue. It would solve the problem of the people who are sitting on their money and wouldn't buy that Ferrari in the first place, also.
As I implied in my original comment, the Ferrari buyer will probably still by the car, the tax may just delay the purchase, and then we have the benefits of both.
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By labeling my statement "trickle down", you attempt to discredit the point without really addressing the argument.
What seemed implied in your original comment was a resentment that someone could afford the Ferrari or Maserati in the first place. You implied it was objectionable that someone would drive a Ferrari when others are suffering. That they should wait to flaunt their wealth until others are not suffering. Let's put aside for a moment the FACT that there are always people who are poor and suffering. And while we're waiting for the rich to start spending money...or rather, while they wait for us to give them the queue that it is socially acceptable for them to spend their money again on items that we decide are tasteful enough, let's take their money away from them by force and give it to the folks who are suffering.
I was simply pointing out that the reason the economy is contracting is because consumers stopped buying stuff, for many reasons. The last thing we need is for the peope who can still afford to buy stuff to also not buy stuff. The economy wouldn't just slow down, it would grind to a halt. You also seemed to ignore the fact that Ferrari's are already subject to a severe luxury tax.
Also, you seemed to miss the joke about Ferrari's being effective ways of separating the Rich from their money. If you want to separate the Rich from their money, I argue that there are more creative ways of doing it than taxing them. Enzo Ferrari came up with his idea. What's yours?
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Comments are now closed.
Having spent the past 20 years in New Zealand that chose to re-invent a country based on the Free Market and trying to instill in citizens that 'taxes' are bad, Governments should be reduced to the size of a postage stamp and everything should be user pay .... well ... this does several things:
1) Produces a huge amount of civil unrest that will eventually lead to civil conflict because the rich get 'subsidized' while industries no longer are supported ... thereby removing 'finances' from job creation and focusing 'finances' only on 'finances'.
2) Permits those aspects of developed countries (roads, health, education, retirement) from deteriorating because businesses do not pick up the tabs for 'common use'.
The type of Free Market ... low taxes for the weathy and subsidizing businesses to 'create' jobs is a failure. We are where we are because of these policies.
If the conservative political people want to add to the conversation, they do need to rethink these policies. They have failed horribly and the future looks very bleak until we recognize the need to balance the 'individual' with the 'collective'.
Dr. Virginia Lubell