You could save mega-bundles by reforming the State's Information Technology management. The use of contractors, blank checks, siloed projects duplicating effort, proprietary tools where open source is available, end product quality, usability...I could go on forever, is tremendously wasteful.

It is impossible to communicate the level of despair one feels reading the DHS' stats, knowing that DHS will keep self-declared essential contractors at exorbitant rates, and lay off 15 field staff without blinking an eye. As one DHS director told me, "it isn't a problem. People that are bothered by our aggressively defending our turf are too idealistic and self-select out".

At least mandate some transparency. Set some standards. Why is the State's abortions, medical marijuana and pharmacy licensing databases in MS-Access, with 5 full-time programmers to support each? Very typical. A fly-by-night solution at premium prices. I've seen the same with PDX city and Multnomah County. It is staggering the money we could save if public sector IT used even the same standards you do at home. At least cut the crap with all contractors coming through placement agencies. The excess, per head is twice a DHS field workers annual salary!!! And they use the mechanism as a "black list". Basically they get game players in the name of getting game.

One final consideration on the point. There's a lot of IT workers in the State. Seeing this kind of thing on a day-to-day level really jaundices every other effort well intentioned people make.

All this nonsense about budget cuts and sales taxes would go away if Oregon just restored the old balance between business and personal taxation, and instituted a truly progressive income tax. We need a higher top bracket. The same applies on the national level. Iraq/Afghanistan was the first war we've fought without a war tax. Instead, Bush CUT taxes for the richest. Congress should segregate the costs of the wars of the last eight years and pay for them by both imposing Obama's tax plan (which restores the pre-Bush rate on incomes over $300,000) AND by imposing a war surtax on those same incomes, equal to the cuts they enjoyed over the past 8 yars, until the war debts are paid off. Those costs should be paid for by the ones who made out like bandits since 2001, not by the middle class and working poor who face program cuts.

Chuck, I checked your numbers and I am not sure you are correct.

In what you discussed above I assume that the amount that the Oregon Legislature has is the General Fund and the Lottery Funds together(there have been huge increase in the "all-funds" according to the state's web-site). But even using the smaller number you discuss above I came up with very different numbers:

In 05-07 the Legislature spent $12.5 billion with general fund and lottery.

This forcasts means that the budget is now up $2.75 billion, a 22+% increase to nearly $15.25 billion for 07-09.

Even with this awful estimate the next budget is projected at $16.1 billion, a jump of over $800 million, or 6% increase.

For the coming budget the difference between a 12% increase vs. 6% increase is not really what you implied above. I hate to see us play with numbers (although I rounded a little bit).

At the risk of kicking the "elephant in the room" that nobody wants to talk about, is this the moment when public employee salaries and benefits need to be re-evaluated in light of current market conditions in the private sector? I know that for the most part, public employees have been tireless supporters of the Democratic party and progressive causes, but do we come to a point where societal needs trump the traditional Dem. commitment to protect public employee wages and benefits?

UAW members have also been strong traditional supporters of Dem causes, but if I understand the tone of the current congressional hearings, our elected Dem representatives are likely to let private market forces restructure the domestic auto industry, which will result in huge salary and benefit cuts to UAW workers and retirees.

If it comes down to a choice between providing food and medical care to the needy vs protecting public employee wages and benefits, I suspect many would come down in favor of using limited funds for direct program services. Perhaps we will not be forced to make the choice if the legislature can raise taxes sufficiently, but I am beginning to wonder whether that will ultimately be feasible. Glad I don't have to figure this out.

Another way to skin this cat is to let "temporary" business tax breaks lapse. LWV did a study a while back and found huge amounts of revenue lost from "temporary" tax breaks that subsequently got renewed without discussion ad nauseum.

"A tax increase on very wealthy individuals, who are best able to ride out the economic storm, would tap money that would more likely be saved rather than spent."

Don't you think the very wealthy are savy enough to avoid these tax increases? Raising taxes is no way out of this mess and will only make things worse.

Kari, you said,

"For service levels to remain steady, the budget has to go up. Why? Because a HUGE chunk of the state budget goes for people - salary & benefits."

Ok, granted, that is how it has always worked. Does that mean we always have to pay more for wages and benefits?

Have you noticed people are being laid off in the real world? Have you noticed incomes are contracing in the private sector? You know, the people paying taxes for those receiving those ever increasing wages and benefits on the Gov't side?

Maybe we could just cap the wages, freeze them, like happens in the real world when economic conditions deteriorate?

That,by the way, would be real change!

Long live the kicker!

Because in real life, you need only plan for the current two-year budget cycle.

Imagine if you did that with your own personal budget...

David England wrote:

Don't you think the very wealthy are savy enough to avoid these tax increases? Raising taxes is no way out of this mess and will only make things worse.

So, perhaps we should make incomes over a certain level free of taxes, since these wealthy folks will avoid paying anyway. The very wealthy have no lack of wimpy enablers such as David England. Such people cannot move beyond the raise taxes/cut taxes duality to consider the rationality and justice of tax structure.

As Mr. Sheketoff wrote:

[T]he current economic crisis demands smart, practical solutions, not ideological sound bites.

Let's give it a try, eh?

Greg D. sez: At the risk of kicking the "elephant in the room" that nobody wants to talk about, is this the moment when public employee salaries and benefits need to be re-evaluated in light of current market conditions in the private sector?

Nice Republican resentment-style rhetoric (or concern trolling): Instead of approaching things with the goal of better working conditions and benefits for everyone, stoke the anger and resentment of the have-nots as a way to worsen the condition of the folks who've got an effective union.

And no, I'm neither an Oregon public employee nor a union member.

Jeff Alworth wrote:

we should get a third leg so the damn stool doesn't topple every few years.

Please show us a progressive way of doing this, Mr. Alworth. All "third legs" I have seen proposed for Oregon have resembled plunger handles applied to the posteriors of working people.

Mr. Roberts makes a good point about the proximity of Washington (a no-state income tax state) to Oregon and espically to Portland where the majority of "rich" tax payers live. But I don't really believe that alot of people are going to move to Vancouver because of the "snob factor" that most Portlanders have of Vancouver. Certainly a few will, but I would like to see some data.

Greg D., I am a public worker and I agree with your point. There should be across the board cuts in salary and benefits for public workers. By Democrats taking the lead on this we take the argument away from the GOP (just like some Dems are starting to shy away from the UAW for the good of the nation as a whole on the auto industry debate.)

Whether or not public employees take a hit, I think there should be cuts in direct social welfare programs for adults that do not have child rearing responsibilities. I understand people rely on these services, but unfortunately hard choices must be made and while children programs should be funded, we cannot now afford to support adults able to work who are just down on their luck.

The real elephant in the room is the Oregon Health Plan and I just don't have enough info on that.

I think we need to view the revenue problem as part of a greater identity transformation that is occuring in the state. I think everyone would agree that the "purple" Oregon has increasingly become a "blue" Oregon. We certainly have a strong contingency of frontier independents left and I appreciate and admire them, but to the frustration of them and our ardent conservatives the change is happening.

As a bluer state, certain things become increasingly more intolerable. One such thing is the reduction of school days. In the New Jerseys and the Californias of the the country, you do not cut school days. You don't do it because it's embarrasing. You may be short on cash, but you are not going to let the world know how cheap you are. The least you can do is keep your kids in school for god's sake. If you have to pay higher property taxes or heaven forbid a sales tax, you do it because that's who you are. It's like going to church. You may not like it, but you do it.

The higher message here is that it is embarrasing that we cannot sustain a functioning government. Reducing school days and graduation requirements should never be an option. I think the bluer we get the more receptive our citizens will be to this message and we need to pursue it. When you're embarrassed, you will pay the extra 6 cents on the plastic Santa Claus at the 99 Cent store. And if you are infuriated because you're state is changing you can always move to Idaho. I hear they're doing a good job of teaching their students the Assasinate Obama chant.

Oregon has at least a three-legged tax stool. Though I'm not fond of the lottery, it brings in a significant percentage of our budget. And let's not forget fees. Plus, every time I hear about the three-legged tax stool being necessary, I look south a few miles into California and wonder if a spider would have enough legs.

Oregon has both a revenue and a spending problem. Part of Oregon's bipartisan divide is that both parties only tend to address just one part of that problem.

I know I'm sounding like a broken record here, but "bank the surplus" can be a pretty effective "third leg."

In terms of property tax reform, we can do that whether or not we adopt a consumption tax. The bare majority vote on Measure 5 in 1990 showed that Oregonians wanted some kind of tax relief. There's no reason it NEEDS to be Don McIntire's version. The legislature could offer amendments to the constitution to replace the flat-rate cap with something else that would give homeowners some tax relief while returning more control of tax rates to voters at the local level.

A homestead exemption would be a pretty good way to go, as would be a split-rate system that taxes income-producing property at a higher rate than non-income-producing property. If I own a rental property, the rents will allow me to pay the property tax on it (as well as other expenses). In effect, the property pays for itself. But if I'm living there, the home is an expense, not a revenue source, and I still need to pay the same tax on it.

One easy approach: add the words "owner-occupied residential" in front of "real property" in the property tax limitation sections of the constitution. That would keep tax relief for homeowners while expanding the tax base on those properties that pay for themselves.

Sounds like Sal and Jack have been listening to the Task Force on Revenue Restructuring.

OF COURSE the devil is in the details. That is why we need open public debate on everything, rather than the idiocy we've seen in recent years (remember the "bucket plan" which died when Dan Doyle got into legal trouble?) or the boogeyman of "they will raise your taxes"?

Jack, thank you for saying "Oregon taxes a lot of people who are exempt from federal income taxes". Many people in your party didn't want to admit that.

As far as addressing spending in general, any cut requires 31 votes in the House and 16 in the Senate for final passage, so just declaring in public that something must be cut won't make it happen--regardless of the attitude of some legislators in the past.

We need a total restructuring in this state, nothing taken for granted. All tax breaks should be examined.

Do those who have registered to vote since 1990 believe "the voters spoke" on Measure 5 and thus they have lost the right to express an opinion? If someone registered to vote in Oregon in 2001 or later, do they have the right to an opinion on whether the kicker should be in the Constitution? Or are they denied the right to an opinion because "the voters spoke" in 2000, tough luck that they were not registered (not old enough?) then?

Yes, a sales tax in hard times can be an uncertain revenue source. But so can the current system where individuals pay more than businesses. It is all about a package put together by people who really want to restructure the system. With lots of new members, there might be less investment in the status quo.

And on spending: Republicans seemed to place more importance on evaluating any spending on unionized workers with a fine tooth comb (how dare they have decent wages, any benefits at all, a retirement plan!), while management/administrators apparently had the right to earn whatever the market will bear.

Let's turn that around and go beyond the problem of "golden parachutes" which I believe was addressed in 2007.

Who evaluates whether public administrators are earning their salaries? Do any state administrators make more than the Governor? If so, why?

School principals have a very tough job. Some do it very well, some not. But what about the level between them and the district Superintendent? The HR Director, Curriculum Director, COO, "the superintendent's cabinet", that sort of thing. Is their work evaluated regularly, or are such evaluations only for front line workers?

We need to be talking specifics, not generalizations like "agency funding" or jargon like "all funds budget".

Are there rewards in the system for finding a more cost-effective way of doing things?

There needs to be a serious conversation about all this in public.

The most effective policy for raising revenue in this recessionary context is get revenue from those with the greatest ability to pay — both wealthy individuals and large, profitable corporations. That’s where the money is.

A tax increase on very wealthy individuals, who are best able to ride out the economic storm, would tap money that would more likely be saved rather than spent.

oy vey

"need to exclude many items, target tourists in particular, and include exemptions and transfers."

That is where the debate should be, not whether sales tax is good or evil.

And Kulongoski's hike of the car registration fee hits all people, incl. those who are unemployed when their car registration comes up for renewal. In many parts of Oregon, there is no alternative transportation.

Oregon's corporate income tax rate is a flat 6.6%.

Oregon's personal income tax is basically a flat 9%, once the tax kicks in.

I would like to see these equalized. What is the rationale for giving a tax break to a business because it has a corporate form? I understand the problem about double taxation of dividends, but that can easily be cured by exempting dividends from personal income tax.

A solution to any personal financial crisis:

Maintain your current level of spending and DEMAND you boss give you a raise.

WTF

Jack Roberts writes:

I wonder how long this "soak the rich" rhetoric is going to be good politics. If Oregon adopts a new tax on the rich at the same time Obama passes his tax increase for the rich, it will be very inviting for critics to blame these policies for continuing economic stagnation (particularly if Oregon lags behind the rest of the country).

Two thoughts, one substantive, one rhetorical.

1. The top income tax rate Obama is proposing is 39.6%, well below the 50% that prevailed during Reagan's two years of greatest economic growth (1983 and 1984), and a far cry from the 91-92% maintained by Dwight Eisenhower.

Meanwhile, the top state rate Chuck is proposing -- 11% on joint incomes over $500K and single incomes over $250K -- is virtually identical to the top state rate that prevailed in 1983/84 (10.8%) and below the rate that prevailed in 1955 (11.6%), the year of greatest economic growth in the Eisenhower years.

Bottom line: The two strongest years of economic growth ever delivered by Republican presidents (1955 & 1984) came under tax regimes that had much higher rates for the rich than the combined rates proposed by Barack Obama and Chuck Sheketoff.

1. Against that substantive background, the correct way to discuss this issue is not "soak the rich" but "make the rich pay their fair share."

Public sentiment strongly supports that view, with Gallup's annual survey on tax rates showing that 63% of people think upper-income people pay "too little" and 73% think corporations pay "too little."

As Mr. Roberts notes, if Democrats make modest increases in top rates for the rich, "it will be very inviting for critics to blame these policies for continuing economic stagnation." But those same critics blame taxes in every situation, no matter what the evidence shows.

That doesn't change the fact that their trickle-down, deregulatory policies have led us into this economic ditch.

And it doesn't change the fact that, despite their "pro growth tax cut" rhetoric, the best economic years under Republicans have actually come when we've had higher taxes for the wealthy.

Oregon's corporate income tax rate is a flat 6.6%.

Oregon's personal income tax is basically a flat 9%, once the tax kicks in.

I would like to see these equalized. What is the rationale for giving a tax break to a business because it has a corporate form?

Actually, this disparity is somewhat misleading. The corporate tax is a true flat tax, starting with a 6.6% tax on the first dollar of income. The personal income tax has lower initial marginal brackets and individual and dependent tax credits that lower the effective tax rate to about the same as the corporate rate, around 6 1/2% (although it's lower for low-income taxpayers and higher for high-income taxpayers).

There are two other complicating factors: The number of businesses that do not pay taxes at the corporate level (partnerships, S corporations and LLC's) and, Chuck's favorite, the single-sales factor for allocating income from multi-state corporations.

Simply raising the corporate tax rate from 6.6% to a flat 9% is not as fair as it looks. Having a graduated corporate rate might be another consideration, but I assume the single-sales factor is a bigger issue and could be addressed, at least in part, by a corporate minimum tax.

Funny how we are supposedly in this crisis and no Oregon democrats or democrat blogs question UO spending a quarter billion in state money for a no bid contract NIKE arena. You only seem to debate more cigarette taxes and fees.

You also do not ask the governor if his support for the UO arena has anything to do with the 187,000 dollars he got from NIKE in November of 2006. Why not ?

I read an interesting and compelling paper from the Center on Budget Policy and Priorities. In a nutshell it argues that cutting government spending is worse for the economy in the short and intermediate term than raising taxes -- especially if you target tax increases toward high income earners.

I'm not willing to debate this idea on BlueOregon. But I encourage everyone -- especially those proposing government wage/benefit cuts -- to read the paper. Who knows? You may learn something.

The nice thing about a crisis is that, once in a great while, people are willing to think instead of simply recite their buzzwords.

The present crisis means Oregon has a golden opportunity to craft a new kind of "third leg" -- one that concentrates producing a "Green Tax Shift" as proposed by (among others) Alan Durning and Co. of Northwest Environment Watch (now Sightline Institute).

If we add a leg for green taxes (carbon taxes, taxes on pesticide use, taxes on use of nonrenewable resources, taxes on hazardous waste emissions) then we can shorten the legs that tax investments and earnings (the things we would actually like to encourage).

Redefining Progress has a good book called "Tax Waste, Not Work" that is definitely worth a read. I think the "Tax Shift" book from NEW is still available from them.

A short term bump in the top rate is obviously a good quick-fix solution to revenue shortfall (far better than spending cuts, which only exacerbate the vicious cycle in the economic downturn).

But diddling with rates alone isn't enough--we need to start having our tax system work for us instead of against us. Today, what we do -- the way we tax is -- discourages savings, income, and investments, the very things we then try to spend money to promote. It's like driving around with your foot jammed on the brake and the accelerator at the same time.

If Oregon Democrats really want to make progress, then we need to revisit fundamental assumptions about what and who should be taxed, and how those taxes should affect choices of the people who pay (or avoid) them.

Chuck, thanks for an important and timely post.

The claim that tax increases on those who make the most will hurt the economy is indeed an ideological sound bite -- on that, the point bears repeating, is factually and historically incorrect. As Kevin Phillips has shown quite persuasively in books like Wealth and Democracy, whenever we as a country place limits on the earnings of the wealthiest among us, the middle class and economy as a whole thrive. Whenever we don't, the middle class and economy suffer. So I think the punch line is one of pragmatism: we tried that. It failed. Let's do what works.

On framing the debate over corporate taxes:

What if we were to use a simple everyday metaphor: "Some companies believe that because they create jobs, they shouldn't have to pay taxes. This is like saying that a child who gets good grades in school shouldn't have to do their chores. Every child has to do their chores. And every corporation should pay their fair share of taxes."

And if accused of hating corporations:

"When you ask your child to do their share of the chores, does this mean you hate them? Of course not. You love them. And you expect them to carry their weight in the family. Asking corporations to pay their fair share of taxes is the same thing. No hatred here. Just everybody doing their part."

What do you think of this framing? Positives and negatives?

I'd like to push back on comments Scott J and Greg made about gov't employees wages and benefits being the problem of state budget shortfall. I have a personal example. In 2002, I worked for a county Mental Health agency. We received a lot of our funding from the State. The state cut our budget significantly. We laid off about 1/4 of our agency workforce. Scott seems to think the gov't never lays off people and that's just plain wrong. Also it is ridiculous to cut social services at a time of recession. We saw our clients unable to get psych meds and the streets and buses of Portland get a little scarier. Keynes (and Paul Krugman) have shown that gov't spending, not cuts, in a time of recession can lead us out of economic down times.

About 'soaking the rich' framing. I'd rather see it framed like this. Is it more important to keep rich folks and corporations at a low tax rate or end a recession. Your choice.

Sorry, I just don't buy in to the theory that a state can tax itself out of a recession. It is completely counter intuituve. It really matters not a whit who is paying the increased taxes.

Perhaps the most bothersome thing about the post is Chuck and some others taking as gospel that the state MUST have an additional $1BB in order to run effectively at the current rate. That is only superceded by nary an eyelash batted when DHS is supposed to rack up an additional 24% increase.

For the past 3 years DHS has run a deficit, and is a legacy of missed opportunities, non-accountability and mismanagement. Now is the time to clean house. I happen to know that right now they are seriously considering releasing an RFP for yet another multi million dollar software system.

For the rest of the state, some modest proposals to keep the rise in costs below 7.5% WITHOUT impacting service in critical areas:

1. An immediate hiring freeze in all state positions not directly tied to direct contact public safety, health or education.
2. All non-represented employees have an immediate step and wage freeze imposed.
3. Take an inventory of all gasoline engine vehicles in the state motor pool. Immediately park 25% of them. Next year rotate that 25% back into the mix and rotate out 38%.
4. Stretch scheduled maintenance by 500 additional miles for gasoline vehicles and by 250 miles for diesel vehicles.
5. Abolish Education Service Districts and roll their functions into the various school districts.
6. Abolish the State Liquor Board.
7. Immediately stop all capital equipment purchase planning until a line-by-line review is accomplished regarding utility and efficiency of the proposed purchase.
8. Place all temporary and contractor employees on a 7/28 day rotating furlough schedule. As they leave do not replace them
9. Stop purchasing individual bottled water.
10. Set all public buildings to 65 F in the winter and 80 F in the summer.

I'm sure that there are plenty of other ideas out there that do not guage state workers, but keep a reasonable lid on rising costs.

OK, Kurt, I'll bite.

Suppose I am a legislator reading this: 1) What proof do you have that adopting your list as written will a) fill the shortfall b) actually save money?

About #5. There was a time when Sizemore wanted to kill Metro. But when asked why he wanted to create new bureaucracies in all the jurisdictions covered by Metro, he didn't have an answer.

I'm not a huge fan of how ESDs are run in some cases. But given the amount of school district funding which comes from the state, how does that save money?

You're saying small school districts should, among other things, each hire hearing and speech specialists, special ed staff, register home schooling families, provide substitutes for absent staff. You are sure that the small school districts can do that more frugally than ESDs?

It seems to me that with the current school funding formula with so much funding from the state, more attention should be paid to administrative salaries--agency management, upper level school district administrators, etc. Is that what you mean by " 2. All non-represented employees have an immediate step and wage freeze imposed."?

Who evaluates whether those in management are earning their salaries?

I think the tax/budget system in this state is broken and dysfunctional. I'm glad there are task forces looking at ways to update/ change the system. I hope there is an open public debate on all the possibilities, not the "good people support...." nonsense, shutting off debate before it started, which we saw in the Minnis/Scott et al years after Snodgrass deposed Speaker Lundquist.

To All:

I am a public employee. We are operating with 70% staffing with a 110% case load. The increase in the number of working people applying for services has increased approx 20% in Multnomah County and approx 50% in Bend. Caseloads are enormous!.. Our hearts are broken every day with stories of struggling families and we persevere to the next day.

We have had 2 wages freezes, no COLAS since I have become a public employee. I love my career. My co-workers and I struggle to stay afloat in this economy.

The relevance of the argument to assume Public Employees are rolling in dough, is ridiculous. 1/3 of our work forces are in qualifying benefits themselves. (Food Stamps). YES we matter, and YES we care. I care about my clients.

I invite anyone to please visit an office, any office to see what the lobby's are like. It will break your heart.

My salary is the not issue. The issue is the tax system in Oregon. Why are corporations paying a 10.00 minimum tax? Why when the economy tanks, public employees are "greedy state workers whom are lazy and take and take".

I can only know in my heart and pray each day our public knows how much we do care and how much we strive to lobby our legislatures for funding toward providing services are clients need and deserve.

Please do not blame public employees. We work hard.

Thank you Gina

We have too many government (state and local) employees, and the number just keeps on climbing.

http://www.qualityinfo.org/olmisj/CES?action=rs54&areacode=01000000

It's high time state and local governments conducted layoffs. 20% would be a prudent start.

So that is your answer. Layoff public employees. And what would that accomplish? Satisfying your obvious lack of knowledge of the work we do.

Hey Cut! What kind of work do you do?

And what would an across the board cut of public employees accomplish?

Cut 20% of law enforcement? 20% of public education staff? 20% of staff dealing with ridiculously high caseloads already? 20% of DMV employees? 20% of Treasury, Justice, Gov. office staff? Why--to suit an ideology? When did population in Oregon begin to decrease?

I once knew someone who was a juvenile court counselor and burned out. She said there was a dividing line between a caseload which allowed actually working with clients and a caseload where one did more papershuffling than actually working with clients.

Is Gina's example of 70% staffing with 110% caseload what you want?

I wonder if people working for private employers (esp. those experiencing a shrunken workforce without a shrunken workload) would think laying off people just to meet a percentage someone thinks is a good idea.

Let's say a day in a retail store or fast food operation was going slowly, so management tells some employees to go home early. Then the store is swamped with customers. Are those customers well served by an understaffed business?

Maybe Cut is one of the "cut it all " crowd who don't think the government should do anything for ordinary citizens, just give tax breaks to businesses. Time to realize the tide has turned and brainless slogans no longer control the legislature.

This is slightly off the topic here, but endulge me.

Sam Adams is now callously calling for a "leaf tax" on ALL of Portland homes. This is utterly insane; with the economy in its worst shape since the republican great depression of 1929, any fee/tax hikes are contemptuous! In addition, why should EVERY homeowner be subject to this "leaf tax"? Why shouldn't businesses pick up the tab?

Further, why does Sam Adams need a tax-payer-paid staff of SIXTEEN employees???

The leaf tax - I love it! That's why Sam has 16 employees: to think up brilliant ideas like this requires a large staff of dedicated progressives and intellectuals.

Of course, you're not going to end up taxing that same 5% who got the $414M of kicker money to get it back, as you say. Many of them had their income from the housing boom, which is over. Their income is falling off dramatically and overall income is going down, so whatever top percent you tax will not be the ones who reaped those rewards. Some will, some won't.

The ultimate problem is that you end up taxing people who have the ability to pay, but only just got there after years of frugal living and fiscal responsibility, paying off student loans, etc. Income taxes are not wealth/personalty taxes. They hit the upper middle class, many of whom have struggled to finally get ahead.

And there is still the moral hazard problem which nobody wants to address--abuse of public services by people who specialize in it. I'm not the Republican type who thinks that's a huge segment of people receiving govt services, but it is a problem that needs to be addressed so that we taxpayers can be sure the people getting the money are the ones who really need it. I have literally seen a man living in a HUD apartment with a new Ferarri in the basement. No joke. It's more of a problem than people think.

"We need the money (and the work it buys)and the higher earners have it. End of story."

There you have it - there's only 1 word you need to know to be a good progressive:

You just hold out your hand and say: GIMME!

Spot on, Kurt. For what it's worth most of the rank and file at DHS support your proposals. It's the middle and upper management that is actively concerned with increasing the budget each year by hook or crook, usually both.

If the public would separate DHS' mission from its execution, walk into offices, volunteer and don't leave until something happens, this state could save a bundle. Unfortunately- and the middle and upper management actively cultivate the perception- if you criticize any aspect of DHS operation, one is called anti-(fill-in-the-blank).

I mentioned Information Technology because it is out of bounds everywhere private sector included. I have first hand experience at OLCC and it is even worse. They use their commission unaccountability to violate every statue and administrative rule they feel like. I quit when a manager that shall remain nameless was in a big rush to get a new application installed and decided to leave the firewall open all night long and allow anonymous connections from an Indian software concern (in India) to update any of the java classes they felt they needed to. That was the day after I overhead a conversation about how they were going to hire a contractor for a day at $200/hour, give him an impossible task on the project and when he failed blame his company and ask for more revenue and time to fix the problem. In truth, they had screwed around trying to learn the coding techniques for 6 months and had accomplished what someone that knew what they were doing could have in 2 days.

At least we need to some way to trump the administrative rules so that legislation gets followed. We passed good legislation to reign in contractor use, but the administrative rules allow so many exceptions it has no effect. Start with this simple point that is costing at least two DHS field salaries in waste for every contractor. I have seen at least 7 cases in 5 years, where an individual interviewed for a position and did not receive it because they did not immediately accept that the legacy tool set was the only way to get the job done. Many had brilliant ideas for improvement. So, they hire a lackey, usually much less talented and pay him/her top dollar, like they were as qualified. Then, when the rubber hits the road, they can't perform. A prob? No. They hire a contractor at twice the rate to do the real work. The 7 cases I mention? They are cases where the department later hired the exact same person they had turned down in the interview as a contractor to do the work. How can you possibly argue that you hired the most qualified person for the job when you have to have that person do the job 3 months later?

Bottom line, there is a gulf like the Pacific Ocean between the rank and file and middle/upper management. You could literally run just fine with only the first tier management. If you cut back to that and let them ask for and define what they needed higher up, you could cover the shortfall and be in the black for years to come. The rank and file would be a lot happier too. If you question this as too idealistic consider how many have said they would accept a pay cut. They know all this and they know about their higher ups and that the higher ups will not suffer and yet some would still take a pay cut.

This is a great group of people! Give them any help and you will get better services, happier clients and have no budget probs in the human services area.

How about a 5% luxury tax on exotic cars, yachts, aircraft, and motorhomes registered in Oregon. Oregon is used and abused as a tax haven by thousands (perhaps tens of thousands) of people from Washington and California (perhaps other states too) who register their expensive toys in Oregon to avoid sales taxes in their home state.

A couple of points:

Kari writes: For service levels to remain steady, the budget has to go up. Why? Because a HUGE chunk of the state budget goes for people - salary & benefits.

While a large portion of the state budget is for personnel, that's not the main driver of costs over inflation; it's caseloads and program costs. Looking at DHS, for example, the personnel expenditures are a small portion of the total budget. It's the cost of health care for those on OHP and mental health, child abuse, and addiction services -- real people in real need -- that drive the state budget much higher than inflation. You could fire every DHS employee, and you wouldn't balance the budget.

As for wage and COLA freezes, Kulongoski did that for almost three years in his first term (way longer than needed). The net result: thousands of good state employees left for other work. If you freeze wages, you're telling good employees that they can't get rewarded even if they excel in their jobs. If you freeze COLAs, you actually give them a pay cut every year. Good employees -- those with highly-marketable skills -- simply leave public service for other work. Bad employees, who have no other options, stick around. It's a horrible management tool that basically criples government for years to come.

Kulongoski finally realized that, too late in my opinion, which is why he pushed through such large increases this last year, to slow the exodus.

"The ultimate problem is that you end up taxing people who have the ability to pay, but only just got there after years of frugal living and fiscal responsibility, paying off student loans, etc. Income taxes are not wealth/personalty taxes. They hit the upper middle class, many of whom have struggled to finally get ahead."

Gee, this sounds like the crack that Vicki Berger made during the campaign about those Oregonians "who actually work for a living paying the bills".

In the real world, people can be fiscally responsible, live frugally, and still be laid off with little or no notice. They might move out of a small town for a better job and not be able to sell their home in the small town.

This sounds like the old saw that rich people are proving they worked hard and the unemployed are lazy.

Speaking as someone who has stood the whole shift on a cement floor as a product demonstrator, worked in retail where one might be scheduled to close the store one night and open the next morning, worked a split shift in before/after school child care over a 12 hour period (all private / nonprofit jobs for those of you who persist in thinking all public employees are lazy, underworked and overpaid), I speak for many in such unsung jobs when I say "When you have worked a day in such a job, then you will have a right to make cracks about "hardworking=rich, low income = lazy".

Yes, corporations need to pay more in taxes, but so do wealthy individuals.

Take 3 Oregonians as an example. One works full time in retail. One is a professional, like a dentist. One is very high income--a CEO or someone else in a management position, a Portland Trail Blazer, or for that matter Sizemore's 6 figure salary.

Are all 3 of those Oregonians in the same tax bracket for state taxes? How about the top 2 earners in the group?

The sort of progressive taxation Teddy Roosevelt and the original Progressives believed in 100 years or more ago was a tax system where the wealthiest were in a higher tax bracket than the ordinary worker.

Now, for most of this decade there have been people trying to prevent even the discussion of the information in that last 2 paragraphs.

There are others who want us to believe that the Republican Party was created in 1980 with Reagan and no one should discuss anything done by any Republican president before then. OK, did Reagan finish 8 years as President never having raised taxes? Or is the praise he gets now for flexibility because he did raise some taxes at one point? The 1986 tax reform debate took place while he was president, and as I recall the folks on Capitol Hill spearheading that effort were former pro-ball players. As one of them said at the time, they had a keen interest because when ball players are hired, they are asked "How do you want your salary--straight salary, deferred compensation, annuity?" and that is not how the rest of the public lives.

Now if someone wants to say that because Sizemore earns a 6 figure income he is "frugal and fiscally responsible" than hard working ordinary Oregonians, go ahead and see who believes you.

Question: When's the last time Oregon state/local government trimmed headcount to any significant degree in response to an economic downturn?

Another question: Why aren't families and communities stepping up to provide services and assistance to people, like they did for over a century?

IMO, this is the problem. Government is not always the most efficient means of getting people the assistance they need, nor should it be the sole provider of aid.

Let's bring some real change and get Government out of the aid business, at least to some degree.

for those who would have you believe that OHP and rampant health care cost increases are principle drivers of the budget increase - According to Mercer, a leading HR Benefits consulting company, the average health insurance premium increase this year in the private sector will be 5.8%.

Why are Chuck and the other posters totally ignoring the low hanging fruit--rescinding the large number of "temporary" tax breaks given to corporations, tax breaks that have been renewed over and over again without debate in the legislature? In most cases, the incentive intended by the legislature is no longer worthwhile.

Honest, have you taken in an unemployed relative to live with you or otherwise provided "services and assistance to people, like they did for over a century"?

Do you believe in unemployment insurance? Food stamps? What do you do for a living?

Now it is time for you to answer John H.

From what I gather, the weird "temporary" tax breaks can not be rescinded without a 60% majority in the House or a referendum -- since technically that would constitute a tax increase. I don't like it, but I think it's true.

Bert, you have asked the proverbial $64,000 question (I'm old enough to have seen that show on TV).

Posted by: Bert Lowry | Nov 21, 2008 2:52:20 PM

From what I gather, the weird "temporary" tax breaks can not be rescinded without a 60% majority in the House or a referendum -- since technically that would constitute a tax increase. I don't like it, but I think it's true. <<<

This should be a matter of legal decision, not opinion. AG opinion, court decision, etc.

LT -

What does it matter what I have or have not done? And how is my occupation relevant?

But, to answer your question, I believe in workfare, not welfare. I also think food stamp assistance should be eliminated. Hint: If you own a house, a big-screen TV, or buy lottery tickets, booze or cigarettes, you shouldn't be receiving food stamps.

Necessity is the mother of invention. If you are of the view that, without Government aid, people will die in the streets, cold, lonely and afraid, then you and I really have nothing to discuss.

Honest, it matters because of whether you are part of the solution or not.

If Honest volunteers at a food bank, or with Habitat for Humanity, or efforts to help the needy through his church, that is one thing.

However, if he is part of the "cut it all" crowd who want tax breaks for rich people but thinks anyone recently laid off whose home has been on the market but has not sold in this economy doesn't deserve food stamps, I call that just plain mean.

BTW, my family has in my lifetime taken in a foster child we knew when her single parent died, and taken in a relative who needed a place to live after a layoff.

I'd like to see the Bill Sizemores who make money off ballot measures or some other scheme try to find real work in the real world before I would blame hard working people who got laid off in this economy.

Anyone who doesn't think there is a lot of paperwork involved in applying for food stamps hasn't been paying attention.

And if anyone thinks only allowing renters to qualify for food stamps will solve the state's budget problems.....

Propose a 5% sales tax and double the corporate income tax from 6.6% to 13.2%.

Problem solved without delving too far into the fairness of taxes as everyone from the fruit picking, hotel cleaning illegal alien to the latte sipping, always bitching Portland socialite pays the same sales tax, while business both big and small put their money where their mouth is and help their Oregonians out of this recession.

It takes the breaking of eggs to make an omelet.

The question now is, do the Democrats with their 60% in the House and overwhelming majority in the Senate have the nuts to propose what I have just mentioned?

As for the retorts of "what if Nike and Intel leave Oregon?" I reply, "I'll believe it when I see it and motherfuck them if they do. Weren't we talking about Portland and Oregon being the epicenter of the green economy? If so, then forget the past and lets work on making the future a reality."

I have a dog in the fight as a state worker in management service (non-represented). I am the absolute bottom rung in management service and am only in management service due to the fact I supervise over 20 seasonal workers each year. The pay raises that the Gov passed out this spring to "all" state agency managers didn’t apply to people in the lower rungs of pay where I preside. I left a $26 an hour non-union manufacturing job after NAFTA sent any job security I had down to hell. I took a $10 an hour pay cut (with equal benefits to go to work doing something I love. The agency has been in a reclass process for over 3 years now to look at salary increases for my staff. The realization that we were spending lots of time and money each year training people that can go to federal agencies and private industry and make about double (with about 40-50% benefits by comparison) the salary and have more months of work each year as we let our people go as soon as the need is absent. We are extremely frugal with what little money we have. The thing to remember is that when these pay raises and cost of living increases happen they are based on an analysis of the complete pay package. Pay is lower that adjacent state and federal governments and private industry but the benefits balance out the package. Most of the folks who complain and leave due to the low pay don’t have the long term in mind for retirement. No one gets the old 8% guarantee anymore and every time an attack is made on PERS it lowers the overall package even more making it difficult to hire and retain good people and because of the extreme difficulty in firing people due to the current union contracts we get stuck with the folks. The equivalent position to mine makes approximately 2-2.5 times more within other local government and federal agencies.

We have been spending the last 3 months working through 3 levels of budget cuts up to 20% in various forms. We are working through this by leaving positions vacant, cutting staff, and not replacing vehicles and equipment that have already had money set aside over the life of the vehicle to replace.

The problem as has been suggested of pay freezes is that when the governor did that last time wages where so repressed at the end that there is no incentive to stay. There is never any deal that says once the economy rebounds that we will catch up with making a comparable wage. Why is it that people think that public employees should work for less that anyone in the private sector, because it’s a privilege to work for the state? I hear it from people all the time that "you work for me, you can’t tell me what to do or what not to do" yet these are the same people that expect us to be there to bail them out when things go bad? My coworkers and myself all understand that we are above reproach and must "walk on eggshells" when dealing with the public.

Just remember that it’s a few of the state agencies and employees and that the majority are here not to get rich, have a power trip or to be above any economic decline consequences.

According to PEW Center research (statline.org), Oregon is the #2 worst state for deficit spending and budget gaps, based on 2003-04 data.

As a citizen I'm angry at both parties for allowing such a mess to happen. Couldn't Oregon be in the middle of that Top 50 list somewhere, if not toward the bottom? Nope. We're right at the very top.

Only now is it a burning issue, now that the credit markets and economy are souring. Why didn't Oregon's governments address the problem when we had the slack in the economy to do so? Politicians like to run up the credit card on their terms, because it's popular to spend money. Everybody wants some. When the economy is humming, the bond market keeps upping the limit on that proverbial credit card.

Progressives who believe in balanced budgets and strong financial management of the government, incorporating some libertarian principals into their democratic and green ideals, get scorned for it. The truth is economic cycles are as natural as weather cycles and even the most communal and agrarian societies lived through them. If you don't save when the harvest is plentiful, you will starve when it is not.

"Why didn't Oregon's governments address the problem when we had the slack in the economy to do so?"

Ted, I suggest a short course in the history of Measure 28 and Measure 30. Republicans controlled the House until the 2006 election.

What specific steps should they have taken?

@moonbat:Propose a 5% sales tax and double the corporate income tax from 6.6% to 13.2%.

So you want to make portland businesses pay 13.2% to the state plus 2.2% to Mult Co when the Couv has a 0% rate? Let's see, ZERO versus 15.4%, you tell me where business is gonna end up.

You will accomplish one thing for sure, making tax accountants RICH

@mp97303: Of course, businesses in Washington State have to pay the hated B&O tax every quarter, which levies a tax on gross revenue, rather than net.

And unless they move all their employees with them, those employees would be adding a commute and still paying Oregon income taxes.

Comparisons of jurisdictions is very difficult, and businesses are not exactly cheap to move. Unless lured by a package in the receiving state, they usually find it costs too much to move if they are an industrial concern. And if they're a retail concern, they don't want to move into the state with a big sales tax + local sales tax adders, as they know from experience in Oregon that they get a lot of business from Washingtonians shopping south of the border.

@George:Of course, businesses in Washington State have to pay the hated B&O tax every quarter, which levies a tax on gross revenue, rather than net.

For my former business there, that amounted to 1.5% of net profit, a far cry from 15.4%

Jack Roberts, There are many hidden and indirect costs associated with the arena. The questionable EMX LTD on Franklin blvd. service is one. City planning staff have wasted a enormous amount of dollars "visioning" and "revisioning" a failed urban village concept next to the arena(walnut node). The arena revenue projections were created by sport pork barrel insiders C.S.L. who have overestimated earnings on other projects. Now UO and the city are proposing spending about 100 million to redo Franklin blvd as a "vibrant walkable multiway blvd". My point is the arena spending is just the kickoff and LTD and the City of Eugene will ignore potholes, cut services and bus routes and raise taxes and all to come up with a costly psuedo-European Disneyland like promenade to please rich sports fans UO Foundation and NIKE. This is what the UO means when they call the project a "catalyst". The plans goal is a branded sport-entertainment district.

For Cut the Budget: Here you go. Lets see if you can find more fault and more cuts to give when you read this. I bet you will, simply because pulling the wool over your eyes and complaining about public employees is the answer for everything, right? yeah.. Hopefully you will not need services in the near future. read on. .

Profile of Tough Economic Times: More Oregonians Look To Safety Net

Tough economic times are when Oregonians count on the states safety net the most. New figures for October show large increases in applications for assistance, especially requests for Temporary Assistance for Needy Families (TANF) and food stamps. No doubt rising health care costs are one culprit responsible for the increase in requests.

“This last year was tough for a lot of people,” said Patrick Carey Of Oregon’s Department of Human Services. “Even for people who haven’t lost their jobs, expenses have jumped for so many things in the last year -- food, fuel, tuition, prescriptions, health care – which can be disastrous for folks with low or fixed incomes. It’s a challenge for us to keep up with all the new cases. The good news is we’re not turning eligible people away.”

The increase in requests comes on the heels of unemployment figures for Oregon, which were released last week. Those figures show the current unemployment rate is 7.3 percent, up from 6.4 percent in September, and from 5.4 percent at this time last year.

The number of families receiving TANF is up approximately 16 percent over October 2007 and households receiving food stamps increased by approximately 29,000 Oregonians. Roughly 21,500 Oregon families receive TANF and about 13 percent, or 499,000 Oregonians, receive food stamps. While every county in Oregon saw an increased demand, Central and Southern Oregon saw the most marked increases.

Bend saw a 46 percent increase in TANF and a 24 percent increase in food stamps while the Medford area saw a 26 percent increase in the TANF caseload and a 19 percent increase in food stamps since last year. In the Portland Metro area, Clackamas County had a 22 percent increase in TANF and a 16 percent increase in food stamps over last year. Washington County had a 25 percent increase in TANF and a 15 percent increase in food stamps. Multnomah County had a 13 percent increase in TANF and an 8 percent increase in food stamps.

“People who a year ago would never have imagined turning to the state for help are now coming to us on a daily basis,” says Erin Kelley-Siel, DHS assistant director for the Children, Adults and Families Division.

Temporary Assistance for Needy Families provides cash assistance to families who have children under the age of 18. To qualify for TANF, families must have very few assets and little or no income. The current maximum monthly benefit for a family of three is $528 per month and clients are expected to participate in the JOBS employment and training

Surprise, surprise...last Sundays Register Guard(city region section) reports that now UO officials are seeking 80 million more state dollars associated with the NIKE arena. How about a 330 million dollar NIKE arena ? Not bad for a 100 million dollar NIKE "legacy gift" towards the arena that they are not allowed to spend on it. The legacy gift is clearly a Trojan Horse gift. I am sure Kulongoski will put this project first because of the 187,000 dollars he got from NIKE in November of 2006.