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Taxpayers should vote ‘no’ on Measure 86. Footing the bill for legislative loan is too heavy a burden for Oregonians
Oregon voters will be asked to decide nearly a dozen ballot measures in the November general election. In my opinion, these measures contain a number of very bad ideas. Among the worst is Measure 86.
The measure proposes to amend the Oregon Constitution to authorize the Legislature to borrow billions of dollars through the sale of a new series of General Obligation bonds. These bonds are guaranteed by the full faith and credit of the state and Oregon taxpayers.Measure 86 proposes to direct the Oregon Investment Council and the State Treasurer to invest the borrowed money in stocks, bonds and other investment vehicles. The earnings from those equity investments are to be used to pay for college scholarships. However, the principle and interest on the borrowed billions is to be paid by Oregon taxpayers far into the future.
More specifically, the scheme authorizes the Legislature to borrow an amount equal to 1 percent of the value of all of the taxable real estate in Oregon. That is currently a maximum of about $4.3 billion in new debt. The Legislature will decide how much will be borrowed at any one time.This is not a “one-time deal.” That amount of debt is authorized to be maintained in perpetuity.
The state is authorized to borrow more money, in the event that some of the invested money is lost in bad investments. The only limit is that the total debt does not exceed 1 percent of the value of all of the State’s taxable real estate. Remember, again, that Oregon taxpayers will be responsible for the full costs of repaying the borrowed money.It gets even worse.
In the event that the governor declares an emergency and fourfifths of both chambers of the legislature concur, the measure authorizes the money in the endowment to be spent for other needful things.Can you imagine going to your local mortgage lender with this scheme? You would be asking your banker to lend you large amounts of cash, for you to invest in the equities market, so that you could give away the investment earnings. The deal would require your neighbors to make the principle and interest payments on the debt, and their property and future earnings would be used to secure the mortgage.
It would allow you to borrow even more money if your investments did not work out. Of course, those additional loans also would be secured and paid for by your neighbors. The deal would even allow you to spend the borrowed money in the event of a family emergency.I believe that your banker would laugh you and your absurd scheme all the way out his door.
Excessive state borrowing on General Obligation Bonds, Lottery Revenue Bonds, and Highway Revenue Bonds has already obligated taxpayers to pay more than $1.5 billion in principle and interest each two-year budget cycle. Most of that obligation will continue each biennium for the next 20 years. To put it into perspective, the principle and interest on state debt exceeds the entire budget for the Oregon Department of Corrections.Oregon voters should reject this absurd scheme to give away other people’s money, and vote “no” on Measure 86.
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Page Updated: Sunday September 28, 2014 12:50 PM Pacific
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