Our Klamath Basin Water Crisis
Upholding rural Americans' rights to grow food,
own property, and caretake our wildlife and natural resources.
11/20/11 Oregon's unsustainable spending addiction
May the Oregon state economist predicted that a great deal more
General Fund and Lottery Fund revenue would be available to
spend during this budget period than has materialized. Many of
us believed, and publicly stated, that the economistís estimates
were too high. We based our concerns on persistent high
unemployment, low business profits and Oregonís current dismal
business environment. Never the less, the inflated tax and
lottery predicted-income was considered to be actual-income.
Most of that estimated revenue was scheduled to be spent during
the current two year budget period.
Thankfully, more conservative legislators were able to prevail
in our attempt to set aside a meaningful reserve. We established
a contingency ending balance fund of about $460 million in
unbudgeted money. Many of us were very publicly maligned for
that effort. House Ways and Means Co-Chair Dennis Richardson
took the brunt of the abuse offered mainly by representatives of
public employee unions.
November financial forecast released last Thursday reported yet
another hundred million dollar reduction in the economistís
inflated projections for state General Fund and Lottery Revenue.
The combined September and November quarterly forecasted revenue
reductions total $306 million. Two thirds of the $460 million
cushion has already disappeared during only the first four and
one half months of the twenty four month budget period.
Our state and national economies do not appear to be materially
improving. We may expect that the actual revenue collections may
decline further. That loss of revenue potential will likely
further erode the cushion created by the money held in reserve.
Those ongoing reductions in income may very well result in the
further need to reduce spending.
there is much more to the story.
Although government leaders continue to characterize the problem
as a serious revenue shortfall, the cause of the problem is
overspending. Oregon government continues to suffer an
unsustainable spending addiction.
fact of the matter is that over the past twenty years Oregonís
actual combined General Fund and Lottery Fund revenue has
increased significantly in all but two budget periods. For the
current two year budget cycle, revenue is expected to increase
by nearly ten percent, according to our Legislative Revenue
Office. That is ten percent over and above the amount of money
that was actually collected during the most recent two year
budget period. Government spending is budgeted to increase
nearly ten percent as well.
the average Oregon family or business, that ten percent
estimated increase in net income would be good news. Sadly, our
state government considers this actual ten percent increase in
projected revenue, and in government spending, to be a serious
shortfall. They predict that only a ten percent increase in
revenue will certainly lead to severe reductions in government
point of this report is to highlight the tired budgeting game
that continues to be passed off on the Oregon taxpayers.
Projected revenue is routinely exaggerated to create the
illusion that money is available to expand government services
and to pay increased wages and benefits to public employees. The
true long term costs of those increased services and employee
compensations are routinely underestimated by phasing-in the
costs over the current budget period. The exaggerated quantity
of available money is then fully appropriated to be spent on
budget items. When the exaggerated revenue projection fails to
materialize it is characterized as a revenue loss that will
result in deep cuts in government services.
Service providers and government leaders then clamor to promote
new and expanded sources of revenue to fill the illusionary
budget shortfall. They spend large quantities of money
advertizing and promoting new and expanded taxes and fees in
order to save critical government services. The promotion and
passage of measures sixty six and sixty seven are salient
examples of how this process is propagated. The proponents
continue to use the process because it works.
time to break this duplicitous cycle. It is time to tell the
taxpayers the truth. The state budget problem is actually caused
by increasing the rate of spending faster than the rate of
income. Itís not rocket science. Itís no different than a family
budget. Governments, like families must live within their means.
Oregonians should insist on adopting a Constitutional spending limit. That spending limit should be based upon the actual amount of revenue collected in the past. It should not be based upon inflated estimates of future potential tax income. Whenever tax collections exceed the spending limits, the excess money should be used to build a reserve fund for use during future economic downturns. In the alternative, the money should be returned to the taxpayers who earned it
Page Updated: Monday November 21, 2011 02:29 AM Pacific
Copyright © klamathbasincrisis.org, 2001 - 2011, All Rights Reserved