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Your thoughts on our state budget
Hello friend,
It's been a hectic few weeks in the capitol.
Facing a deficit of more than $800 million, the legislature needs to re-balance the budget for the last four months of this fiscal year. And although we've received much needed federal stimulus funds that help cover a good chunk of that deficit, cuts will be made in the next week.
Thanks to your responses to my Budget dialogue, I have a clearer sense of your priorities as I weigh in on the critical decisions we're making this week.
Next week, I'll be sending out an update on the budget situation as well as a look at how constituents like you have shaped my views on these issues - and influenced the decision-making of the legislature as a whole.
Today, I'm writing let you know what I learned from the Budget dialogue.
On the question of whether the current general fund budget's breakdown matches your priorities, the result was generally positive - about two thirds of you agreed, and another quarter weren't sure.
Erica urged us to prioritize general fund resources for human services: "Cuts to those services, particularly at this time, could be absolutely devastating to Oregon communities."
Sherry wanted "to see a bigger slice of the pie towards Human Services, especially targeting mental health since that could bring down both medical and law enforcement costs."
Danae would like to see less funds go to road construction, and see more go "to green infrastructure like commuter rail and low-level street lights."
Frank believes that more money needs to be allocated to education. "As a parent I see a sad state of education in PPS. We need to invest in the future."
Public Safety, in Michael's view, takes up too large a piece of the pie. He reminds us that Oregon is "one of five states that spend more on this category than we do on higher education."
One tough question I posed was whether we should use money from the Rainy Day fund to bridge this year's budget shortfall. Just over half of you agreed, about a quarter disagreed, and the rest weren't sure.
Steve urges us to wait: "The Rainy Day fund is very small. We need to build it much bigger. We can tap it for a short recession or disaster, but current conditions do not meet that criteria."
Myrna disagrees: "That fund was created for rainy days and we are having a big storm."
Rob makes the excellent point that cuts can have unforeseen costs: "It is easier to protect vital services now, than to cut them and have to restore them later. Cuts to these services will be very disruptive to the public and the employees who work for the various agencies."
Dylan has been following news about the economy closely, and he doesn't see an end to the current crisis anytime soon: "Most economists are predicted the worst of this recession will occur sometime in the next two years. If we use this now, what are we going to use when things are worse. I fully believe we should save this until we desperately need it."
I gave you four revenue-raising proposals that the legislature will consider during this session, and asked for your level of support for each.
The two most popular were increasing the corporate minimum tax and creating a new, higher tax bracket for high-income earners, with about 76% of you in support.
There was also support for both increasing the rate of corporate taxation (about 65% in favor) and increasing the tax on alcoholic beverages (67% in support), though on the latter proposal about a quarter of you indicated strong opposition to the idea.
Tracy believes that reform of the corporate minimum tax must be a top priority: "That PGE pays $10 is an absolute slap in the face to individuals and small business owners (like myself) who shell out thousands and thousands every year and can barely pay their mortgages."
Sharon wants to see "the wealthy pay their fair share of taxes. The middle class has been burdened for a long time."
If economic conditions were better, David "would support a modest increase in the beer tax to fund treatment programs." In his view, however, "it is clear that now is not that time."
Linda thinks that in the alcohol tax "is a no-brainer. It's been too long since the last increase."
I heard from two people named Tim, with opposite views on the same issue: "The best thing to do would be get rid of the corporate income tax in Oregon to spur investment in our state," said Tim. The other Tim disagreed: "If you are truly interested in recovering the economy you wouldn't squeeze the coffers of consumers but increase the Corporate tax which is nearly non-existent in this state."
Carlos urges us to promote investment tax credits. "These credits are extremely powerful in attracting outside capital to a location. More powerful it becomes when you allow such credits to be negotiated among investors in the secondary market."
To make tough decisions on the budget cuts facing every state program, we need principles that can help guide our actions. I gave you five that I've heard in the Capitol, and asked you to indicate how well they square with your own principles.
I learned that you are group that wants the legislature to prioritize Oregon's schools - over 80% agreed that we should fund education first. You were equally adamant about protecting access to government services - about three quarters of you agreed that since people rely on government the most during an economic downturn, we must work to keep it whole.
As an alternative to eliminating positions in programs, you were generally supportive of pay freezes or cuts for public employees - a little less than two thirds of you agreed, while another quarter were unsure.
I saw more split opinions on whether we should spread cuts more or less evenly across all state programs - about a third agreed, a little less than half disagreed, and the rest of you were unsure.
Finally, on the principle that "government should spend less during difficult economic times", you were split almost down the middle: 40% of you agree, 36% disagree, and 24% of you aren't sure.
Donna, a public employee, would support a pay freeze to help fund education, but only "if corporations and the wealthy were paying their fair share." She also points out that state employees in entry positions "make very little money, so I would not support a pay freeze across the board - I'd put it only on professional and managerial positions."
Doug wants public officials who have "the political will to make the right cuts to the right places." In his view, "government at all levels so much relies on money, lobbying, and influence - as it always will. I want to make sure that we don't make cuts to say education, and then not raise a bottle or alcohol tax because the food and beverage lobby is strong and influential."
Michael urges legislators to avoid making across the board cuts to programs, doing so, in his view, "is essentially abdicating responsibility for making the tough choices. I expect my government representatives to look at the situation and make conscious decisions about where we're going, rather than simply maintaining the status quo at a reduced rate."
Finally, I asked you about a bill that would direct the State Department of Revenue to send every taxpayer in Oregon a letter explaining the breakdown in services funded by state taxes - to help taxpayers understand how their money is put to use. While you were generally supportive of the idea (about 57% thought it was a good idea), you brought up valid concerns about implementation costs, as well as new ideas on how to make it work.
Henry believes that "many citizens are totally in the dark about what our tax dollars support. Any education at all would be a vast improvement."
Seth urges us to demonstrate how our tax dollars are an investment that "pays dividends in the form of a better community, economy, and general existence for everyone collectively, far beyond what any individual would be able to do for themselves alone."
Drew likes the idea but is skeptical of whether it will work: "If it increases the public's knowledge and understand, then great. Still, I suspect it will go straight into the junk-mail pile."
Many of you shared Drew's concerns, and offered ideas on how to make the proposal more effective. Ginny suggests using public service announcements and school classrooms to distribute the information. Karen proposed using email, newspaper ads, and neighborhood meetings. Marylyn thought that using a large postcard might increase readership.
What I learned
On the whole, you are a group of exceptionally well-informed people who have no illusions about the magnitude of the budget crisis facing our state. You understand the need for tough decisions on program cuts, but also want your legislature to find the courage to raise additional revenue in a fair and responsible manner.
Your general - but far from unanimous - support for using some Rainy Day funds to help bridge the budget gap and prevent early school closures strongly informed my own views on the matter - I did support using some, but not all Rainy Day funds, and had serious concerns about the looming $3 billion deficit in the upcoming 09-11 budget.
In the end, the State House and Senate heard your concerns loud and clear, and managed to allocate an extra $51 million in Federal stimulus dollars into a School Day Restoration Fund. With the participation of local school districts, the fund should allow most school districts to complete the entire school year. You can read more about the plan here.
Finally, I really enjoyed reading your nuanced and creative thoughts on the "letter to taxpayers" proposal. I think it's a promising concept that will benefit immensely from the type of citizen input you've provided. I have already passed along your thoughts to Representative Jefferson Smith, the author of the bill, and will work with his office to incorporate your suggestions into the committee review process. Stay tuned for a full update next week,
State Representative Ben Cannon
900 Court St NE
Salem, OR 97301
rep.bencannon@state.or.us
http://www.repbencannon.com
(503)986-1446
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