Has tax-cut fever broken?
Russell Sadler
Tax cut fever started in California in 1978 with that state’s infamous Proposition 13. It raced through Oregon in the 1990s with Ballot Measure 5 and the flawed “cut and cap” Measure 47 and became a national epidemic. The fever appears to have abated in the recent election.
Voters in Washington State, Colorado and California rejected measures limiting spending increases or rolled back tax increases approved by elected legislators.
California voters rejected Proposition 76, limiting state spending and giving the governor sweeping powers that traditionally belonged to the legislative branch of government to cut spending when revenues decline.
Colorado voters rolled back a much-touted spending limit so the Legislature could keep an estimated $3.7 billion over the next five years to pay for the repair of roads, bridges, schools and other public infrastructure and avoid the interest cost of borrowing that money.
Washington State voters rejected a measure repealing a 9.5 cent a gallon gas tax increase approved by the state legislature.
Die hard budget-baiters insisted this is not a trend.
“I don’t see it,” said Grover “I-want-to-shrink-government-so-I-can-drown-it-in-a-bathtub” Norquist, president of the misnamed Americans For Tax Reform.
Norquist is the power behind “the pledge” to vote against all new taxes that he demands all newly-elected members of Congress sign when they get to Washington. If Members of Congress refuse to sign, Norquist recruits and finances candidates to run against them in the next primary. Norquist called Colorado Gov. Bill Owens, once an ardent anti-taxer himself, a traitor to the cause for supporting the rollback of Colorado’s poorly-designed spending limit.
Owens told Colorado voters it was silly to refund $3.7 billion because of an arbitrary limit, then go out and borrow the same amount of money and pay interest just to repair the state’s infrastructure. The voters agreed with Owens.
Oregon voters may have their own moment of truth next year. A cookie-cutter copy of Colorado’s arbitrary spending limit is circulating as an initiative petition. It will be on the ballot if supporters buy enough signatures.
One sponsor of Oregon’s spending limit initiative is Don McIntire, author of Ballot Measure 5, a property tax limitation. McIntire’s 1990 measure reduced property taxes by shifting local school spending from locally raised property taxes to state income tax revenues. The shift amounted to a couple of billion dollars a biennium in new state spending. McIntire is now complaining about “reckless state spending” that his Measure 5 is largely responsible for creating. Can you spell s-h-a-m-e-l-e-s-s?
How do you know when you’ve gone too far cutting government spending? That is a question the budget-baiters have never adequately answered. You don’t know know the answer to that question until it’s too late.
You don’t know you’ve cut spending too much until class size in schools becomes unmanageable or test scores decline. That’s how Californians learned the long term consequences of Prop 13.
You don’t know you’ve cut spending too much until the highways are so snarled that a city strangles on its traffic and major bridges are closed or their load limits are reduced, commuting becomes an ordeal and businesses move out of town because the arteries of commerce are sclerotic. That’s how Washington State learned it wasn’t spending enough money in the right ways to cope with its exponentially growing traffic.
But the most painful way to learn you have cut spending too far is to have a natural disaster --- and no one comes to help or the help that does come is too little, too late.
Call it a Katrina moment.
Dumbfounded Americans watched the slow death of a great American city -- live on CNN.
Hurricane Katrina blew through the Gulf Coast doing devastating damage. But once the blow blew past, no one came. Then the levees that held the water out of New Orleans slowly crumbled from years of neglect. The pumps stopped. And a crippled city died.
Brownie the Crony Appointment was Brownie the Incompetent when the call came.
What help came was too little, too late.
Thousands have been displaced -- permanently. Many will never return to the Gulf Coast. Katrina has spawned the biggest diaspora in our country’s history. The human cost of government’s failure to spend enough for maintenance and preparedness is sobering.
Perhaps Oregonians will decide they have listen to the budget-baiters and government-haters long enough. Perhaps we will decide we have cut government far enough before we have our Katrina moment to prove we have gone too far.
So, is Grover over?
Probably not. This well-connected, well-financed political hustler has the multiple lives of an alley cat.
But Norquist’s influence is considerably diminished. It was strangled and drowned in a bathtub named New Orleans when a Katrina moment demonstrated that zealots like him can go too far.
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Nov 20, '05
I'm inclined to believe that when we discuss taxes we are dealing as much with a symptom of society as we are with one of its elements. A fundamental we need to consider is that a majority of people think primarily of themselves with little regard to their state or the nation. Cutting taxes is a way to take care of themselves - at least in the short term. The examples cited above showing a more positive attitude towards taxes may very well be another example of taking care of number one if the negative consequences of inadequate government funding are finally getting people's attention.
For generations corporations have encouraged people to be consumers first and citizens second, third, or whatever. John Kennedy famously asked us to ask not what our country could do for us but what we could do for our country. That brought out the best in this nation, but a significant portion remained and still remain in the thrall of consumerism where the rule is the less you pay in taxes the more you have to spend in the mall or at the SUV dealers.
There is an old saying from the days of sailing ships when men had to go out on deck to secure their ship before an approaching storm - One hand for the ship, one hand for yourself. The inherent logic of this dictum is impeccable but beyond the comprehension of many people while the ship of state is at risk of foundering.
Nov 20, '05
Russell writes: "Thousands have been displaced -- permanently. Many will never return to the Gulf Coast. Katrina has spawned the biggest diaspora in our country’s history. The human cost of government’s failure to spend enough for maintenance and preparedness is sobering."
Didn't you really mean to say: "The human cost of a Cat 4 hurricane on a city 10-15 feet below sea level is sobering"? Yes, 'they' could have spent more money (and more efficiently) on levees, pumps, etc. But the fact remains that there was much to blame on governments at all levels, and there was much to blame on Mother Nature and the fact that the city was built 10-15 feet below sea level.
One question: If the 1996 flooding of the Willamette in downtown Portland were any larger, and the water level did climb over the railings at the waterfront, thereby flooding the downtown of Portland....would that have also been due to "government's failure to spend enough on maintenance and preparedness"?
6:57 p.m.
Nov 20, '05
We're just now beginning to see what happens when government is vastly underfunded. The expectations our society has for government simply can't be met with the resources that have been made available. From my POV, the state (and the nation in general) are in no mood to have the government stop providing things like FEMA, education, roads, regulation of corporations, etc.
It's my view that the tax cut fever has definitely reached it's zenith and is on the way out.
Nov 20, '05
Russell I’m reminded of the hypocrisy of that “tax pledge.” The idea is simple: a candidate or official signs the pledge thereby promising, giving their word, that they will “oppose and vote against any and all efforts to create or increase any tax, fee or surcharge to be imposed by the state.” If the proponents of this fraudulent pledge would admit it’s really a marketing tool to make Republicans appear fiscally conservative, I would at least respect their honesty. Unfortunately, when Republicans break this pledge their breach of contract is never publicized. Dan Doyle even received a golden bulldog award from Taxpayer Association of Oregon but few were told he voted 9 times for more taxes and revenues and 22 times for increased fees. Oops.
The Doyle supporter filling out Dan’s term boasts about a state budget with no new taxes. He signed the pledge, too. Of course fees went up again and although it doesn’t technically violate the “pledge,” we also have the 8th highest debt in the country. Oops.
In my district, people are growing tired of this simplistic nonsense but unlike most districts they are especially fed up with being misled about and by their representatives. Maybe these folks need to start with a pledge of honesty both fiscally and personally.
Nov 21, '05
Regardless of any pledge most politicians make very few should be taken seriously. They recite the Pledge of Allegiance with the opening of each morning session and before they break for lunch the odds are they will have proven their pledge to "liberty and justice for all" to be an act of conscienceless hypocrisy.
Nov 21, '05
Bill, Brian,carla (or anyone), So are you suggesting more taxes/fees and more government spending? It seems as though Oregon is somewhat unique, and difficult to increase taxes/fees. The information from the National Conference of State Legislatures ranks Oregon the 4th highest state in "Per Capita Revenue from Fees, Charges and Interest". This combined with our record for high unemployment and low "per capita income", makes Oregon a very delicate situation.
By increasing taxes and fees, does our business climate become enhanced?
Nov 21, '05
Bailie, For once and for all instead of quoting statistics on Oregon's national ranking for something, could you just say "There should be no new taxes or fees, this is what I think about current tax breaks, and this is what I think should be cut"?
Or do you have this love affair with national rankings?
The people who control the House love to talk about low taxes, but specifying cuts seems very tough for them. So does discussing them in public rather than in closed door budget negotations. And of course, whoever controls the legislature, no cut happens without 31 votes in the House and 16 votes in the Senate.
Nov 21, '05
LT, Numbers are extremely important and essential for a discussion of taxes and their relationship to the economy.
You might have pinpointed the biggest problem we have had in Oregon. We tend to make qualitative decisions, without regard for impact to business, our economy or our ability to pay. Oregon rankings have not been used enough in making some of our decisions. We are not an affluent state, yet some of our decisions disregard our status. The people of Oregon (in Measures 28 and 30) clearly suggested their feelings about their status and the desire for more government spending. Remember that these Measures were outspent about 10-1 to get higher taxes, yet people strongly supported no new taxes.
You say, "could you just say, "There should be no new taxes or fees, this is what I think about current tax breaks, and this is what I think should be cut"?
I did make similar suggestions for Oregon K-12 funding, since we have adequate funding. Increased taxes just to extend a broken business model is not always the best solution. The problem we have in Oregon is mostly how our revenue is allocated, not lack of revenue (in relation to our affluence).
Nov 21, '05
This discussion of how Oregon ranks compared to other states reminds me of a common conversation my husband and I have. I can never get away with saying, "Other couples do such and such and they're happy about it," because he always responds, "We're not other couples." And, of course, he's right. We actually have a uniquely strong and happy relationship, and his refusal to live according to others' standards is a big part of why that is.
I feel the same way about Oregon. I really don't care how other states are doing things. I care only that I love Oregon and I'm happy here. We should be looking to address concerns of Oregonians, making this state what we want it to be, regardless of how other states do it - because ultimately, how other states do it is irrelevant. Would you rather live in any of those states? I wouldn't. I think most Oregonians feel that way, which is why Oregonian tends to be on the cutting edge, a sort of maverick state. Our refusal to live according to others' standards is, I believe, what makes Oregon so great.
Nov 21, '05
Bailie are you arguing with me or someone else? I am saying that, however silly the pledge, it is something you swear to and if broken, it is a clear indication you do not take your own word seriously and lack integrity. That problem tends to grow until the person leaves office, one way or another.
Since you brought it up, I am not suggesting or even supporting new taxes or increases (except the corporate minimum). I am saying that if you’re drawing more money to pay for something I would rather pay for it once in taxes, not twice or more in debt. That is conservative, that is not the Republican record and that’s why they need gimmicks like this phony pledge.
I would think we could agree on that.
Nov 21, '05
Brian, This is not meant to be an argument, I apologize if that was your feeling. I have lived in this state my entire life and desire what is best for the state. I would hope that the pledge is treated more as a goal for Oregon voters, who clearly expressed their feelings in Measures 28 and 30. The "gotcha" politics of this situation are useless. What politician wouldn't be vulnerable to "gotcha" politics? Did they "swear" to this pledge? I don't know and even if they did, this is not significant.
BEcky ----
You say, "I really don't care how other states are doing things. Our refusal to live according to others' standards is, I believe, what makes Oregon so great."
Your attitude might be working for you, but Oregon is having considerable problems as a state. Many people are very comfortable in Oregon, but to dismiss the problems of others is shortsighted. How do you casually dismiss the worst unemployment in the U.S. for the last five-year period? How do you dismiss among the highest use of illicit drugs? How do you dismiss a very low ranking in "per capita income"?
You say, "why Oregonians tends to be on the cutting edge, a sort of maverick state."
This cutting edge you refer, what is it? How does this "cutting edge" overshadow our problems.
Nov 21, '05
Baillie -
I never said Oregon has no problems, and anyone who's read my posts here knows how upset I am about our meth problems, and I've also written on our disgraceful unemployment situation, if I recall correctly. In this post, I merely said that we should wowrk to make this the state Oregonians want and quit fretting over how we rank in comparison to other states.
And I don't even know how to respond to your question as to what is the cutting edge. In any case, I wonder if you read my post or if you read INTO my post. I intended only what I said, and nothing more.
Nov 22, '05
Russell says, "You don’t know you’ve cut spending too much until class size in schools becomes unmanageable or test scores decline."
It is the high individual K-12 employee compensation that is primarily the cause of "unmanageable class size". No other reason. Oregon has adequately funded K-12. Oregon has not allocated the revenue properly. In almost every year since the passage of Measure 5, Oregon has funded K-12 above the U.S. average. There is an economic conflict for Oregon to individually compensate K-12 employees at such a relatively high level, while we are a less than affluent state (ranked 36th). Until this is realized by everyone involved, Oregon K-12 will suffer academically. There are very real reasons why teachers are being laid off, programs cut and we are experiencing terrible graduation rates. But, lack of funding is not one of the reasons.
Nov 30, '05
As with Mr. Sadler,I do not see a "tax cut fever." But then, I never did. What I did witness during trips to the legislature over the years was a failure of legislative acumen. During the time of tax reform advocate Mr. Phillips, legislators listened politely and did nothing of substance. During Mr. Sizemore's many public statements of concern, the dominant reaction was leadership disdain.
The fact that many Oregonians, left, right, and middle, had legitimate tax concerns just did not seem to penetrate deeply. It still has not. We are seeing now a variety of attempts to impose taxes and tax surrogates without a public vote. Another form of tax limitation evasion is wrongfully labelling taxes as fees. Other manipulations exist and are being considered.
We may have attained a period of rough balance in taxation. If that balance suffers from an onslaught of ingenious tax increases, those tactical successes may well be met with new tax control initiatives.
Nov 30, '05
We may have attained a period of rough balance in taxation. If that balance suffers from an onslaught of ingenious tax increases, those tactical successes may well be met with new tax control initiatives.
Wonder what the person who wrote that comment thinks of tobacco tax?
Also, I would trust the anti-tax folks more if they would say "We must cut taxes and cut spending, and here is where you can read my detailed list of proposed cuts" rather than "we must cut spending. period. end of discussion" or the complicated systems like the bucket plan where anyone who asked detailed questions was some kind of subversive.
I am proud my state senator decided to vote for the balanced budget which became M. 30 because the cuts otherwise were too deep. I recall there was no serious budget proposal in writing to counter that bill, just "we can do better but don't ask for details". And I vote. Call me pro-tax or whatever, but I will not support those supported by Sizemore, McIntire, Minnis, Russ Walker, or any of the rest of that crowd.
Nov 30, '05
LT, What is your definition of "anti-tax folks"? Is it the 61 percent of the "folks" who voted "NO" on Measure 30? Must have been a bunch of enlightened Democrats in that group. Is a person "anti-tax" if he/she desires responsible spending of revenue?
You say, "I am proud my state senator decided to vote for the balanced budget which became M. 30"
Obviously, your State Senator is/was out of touch with the people of Oregon concerning taxes? He should have learned from Measure 28.
Nov 30, '05