Wasn't Ted just referring to not using the the current biennium which ends June 30? Pending the revenue forecast due out tomorrow, this seems prudent.

I gotta say Chuck that Im normally with you. But, I think you have totally missed the mark here. We are only now starting to realize what the depths of this recession may be. The Governor should have frozen wages, rolled back raises, and made cuts even earlier than this. We have only recently begun our savings accounts and they will not even come close to meeting the shortfall. It would be a huge mistake to blow what little savings we have this early in the recession.

We must realize that we may be facing a situation that all of the revenue "restructuring" in the world won't bail us out of.

Orly? Asking "public servants" to work harder for less pay? That's certainly better than the layoffs many in the private sector are facing.

The unions will bankrupt Oregon just like they are going to bankrupt California. Mark this post: it'll happen before 2015.

Posted by: Mos Dusty Prop | Feb 19, 2009 8:29:46 PM

Do you really believe that the unions set administrative salaries?

It was in the news today that the education cuts proposed by the W & M Co-chairs come on top of December cuts in education funding.

Yet our local school board debated administrator pay increases in December and passed them in January (incl. a car allowance) and then in Feb. started talking about the possibility of reopening union contracts.

Now if you want to say that everything BUT administrative pay should be cut in a recession because although the Gov. reduced his salary they shouldn't reduce theirs, by all means say so.

But do you really think unions control school board actions?

Or are you just looking for something to complain about because blaming scapegoats is so much easier than solving problems?

Posted by: LT | Feb 19, 2009 8:48:09 PM

Posted by: Mos Dusty Prop | Feb 19, 2009 8:29:46 PM

Do you really believe that the unions set administrative salaries?

No, but they definitely determine what gets done for that salary, which goes to the "more work" bit. They also have a big say about headcount reductions and that affects your bottom line more than any single factor.

While I appreciate the logic, I have to agree with Chuck. I see this as more of the same. I have asked, and never received a good answer- any answer,really- to the question, "tell me what, as a Democrat, you're proud of TK for?" All I ever hear is "Canadian Pride". If you ask most Canadians what they are proud of Canada for, they'll list multitudinous reasons that they are proud to not be like the US, but you can listen and listen and never hear anything they do, as a positive, that they are proud of. I just keep getting the feeling that the only answers are, basically, "Are you kidding, why are we proud of him? Can you imagine if we had elected Ron Saxton?"

Well, yes, actually. Rather than focus on all the litmus test issues that an Oregon governor doesn't have much say about or to do with, and he would probably change his position on, what about thinking about the problem at hand? Frankly, on the economy, I think he would be making less of a hash of it than current state government is. I know he'd find the funds to keep the school year intact without throwing the budget out of wack.

Regarding your last point Chuck, can you show me a "revenue solution" that will fill a $3 Billion dollar shortfall that will be supported in a voter referral? (That's how big the shortfall is likely to be by the time budgets are passed in June).

Occasionally reality ought to play a role. Big revenue measures will be referred to the voters through the signature gathering process and Oregon voters are tax averse. Conservatives oppose all taxes. Progressives think everyone else ought to be taxed in order to make it more fair (oversimplifying - I know)... but the time to whack businesses with a higher tax bill is during periods of growth, not at a time when they are doing all they can to hang on.

Reserves total somewhere around $750 Million (not exactly sure off the top of my head). If they can raise another billion with taxes (which they can't), the state is still likely going to be $1 Billion short.

Please show us your math instead of telling people what they want to hear. Times are too serious for folks to ignore reality...

However, I agree about using some of the reserve funds to get through the rest of the current biennium.

"they definitely determine what gets done for that salary, which goes to the "more work" bit. They also have a big say about headcount reductions and that affects your bottom line more than any single factor."

The amount over the Gov. salary that some of our local school administrators are paid is a large fraction of the annual district salary for a beginning teacher. Not to mention the administrator car allowance instead of keeping track of mileage for reimbursement.

There is contract language in our local teacher contract that the contract will not be formally re-opened unless the district supplies specific information (in the form of budget numbers, I think) to the union.

This is not a contract between the OEA and management, but between the local union and management (board & supt).

Had the Republicans maintained their 20-10 majority the session after they passed the law to end tenure (no teacher or administrator contract shall be for longer than 3 years), they might have changed the current status quo. But Neil Bryant was on the radio that election year and said that the Senate intended to specify the number of teachers that each school district would fire each year (because of some studies saying that the average district has a certain percentage of substandard teachers) or give a reason why they kept all those teachers. That November, the Senate Republicans lost 3 seats and they haven't had that large a majority since then.

Earlier this decade, there were some bills which had multiple House hearings on the subject of unions and collective bargaining. The most memorable said teacher prep periods during the school day could not be a subject of collective bargaining. The bills never passed out of committee.

If there were legislators who believed that the legislature had the power to regulate school personnel decisions, then is it too far a stretch to believe the legislature has the right to have outside audits of school district business practices (SB 537) or to condition future state school support on a salary cap for district administrators to make sure the state support was spent closer to the classroom?

Or is opposition to such oversight a matter of anti-union, pro-management, Wall Street type "executives deserve to be paid whatever the market will bear" attitude?

Given that President's day was this week, an item I read recently: a quote from Teddy Roosevelt's autobiography, "the Government must now interfere to protect labor,"

If that idea was valid 100 years ago, certainly front line workers in 2009 deserve to be treated as well as management and not forced to work days without pay unless management does also (as the management and workers at our local newspaper did).

What happens if taxpayers decide that maybe a salary cap for administrators isn't such a bad idea? Would lobbyists be able to overcome that belief?

Comrade Sheketov, I commend you for your intelligence and brilliant article. Amerika is in her death throws and must continue to keep borrowing and spending before we can fully celebrate her demise. Democrats have made great progress towards the 10 planks of governing we have in common. I list them here so that they may be at the front of your hearts and minds.

10 Planks of the Communist Manifesto:

Abolition of property in land and application of all rents of land to public purposes.

A heavy progressive or graduated income tax.

Abolition of all right of inheritance.

Confiscation of the property of all emigrants and rebels.

Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.

Centralisation of the means of communication and transport in the hands of the State.

Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

Equal liability of all to labour.

Establishment of industrial armies, especially for agriculture.

Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equal distribution of the population over the country.

Free education for all children in public schools. Abolition of children's factory labour in its present form. Combination of education with industrial production.

LT asks, "But do you really think unions control school board actions?"

Certainly at the PPS district, the unions (teachers, SEIU, AFSCME) have greater influence over who wins than the PTA. Clearly, the unions that have negotiated the contracts that don't permit any "hardship" pay cuts (and are actively resisting them now) are part of the problem.

We are migrating towards a society where only government and union employees (about 1/3 of the workforce in Portland) enjoy COLA's, employer paid healthcare, and defined benefit pensions. The other 2/3 (whose taxes pay for the "entitled" 1/3) are unlikely to sustain these benefit levels especially during a protracted recession.

Taxpayer revolts are inevitable, and the mere fact that organized labor is prepared to dig in their heels and fight them tooth and nail doesn't constitute a viable long term strategy.

The problem is not union wages, which are mostly fair, so much as the bloated "compensation" given to the fat cats at the top as their reward for losing their shareholders millions and throwing their employees out of work. Not to mention the poverty suffered by people in non-union work who can't keep up.

Take money away from the workers and they won't be able to buy products, and the recession will become worse. Put more money in their pockets, and they will spend it, demand will go up, more products will be needed, more jobs will be created. Give that same money to one CEO, and he'll throw it into an untaxed account in the Cayman Islands. What's it going to be.

Keeping the rainy day fund flush is in general a prudent idea. Keeping the umbrellas dry and in storage when it is actually raining, not so much. If that money is spent in ways that prime the pump and get revenue flowing again, the reserve funds will come through the new revenue produced by the recovery funds.

If you follow Paul Krugman, his analysis would seem to back Sheketoff's argument:

"It’s true that the economy is currently shrinking. But that’s the result of a slump in private spending. It makes no sense to add to the problem by cutting public spending, too." Fifty Herbert Hoovers, 12/28/08 NYT

It seems to follow from that the smart move is to spend the money given to you by the feds now, putting it to work in the economy, rather than stashing it under the mattress for use at a later date. Because by then things will be even worse.

If we tap the reserve fund to help schools now, we will tap the brakes on our downhill recessionary glide. That will tend to make the recession milder, and reduce the shortfall for 09-11.

Here's the question:

Will that benefit be enough to make up for the loss of reserve funds?

Chuck, can we have any confidence in an answer to it?

I cannot agree on Mr Sheketoff as progressive as I am. The governor is correct in planning conservatively for a long recession. Oregon typically exits recessions late. Reduction in wages for public employees in this environment is better than total job loss and loss of health care. So in the spirit of positive suggestion, consider progressive wage reductions - a greater percentage at higher salary. More flexible time off. Retain one or both kickers. In education, how about each school organizing parent staffed replacement days in the community?

Oregonians expect a collaborative relationship between public unions and management on both sides, not an adversarial one.

Government is a business, its customers the people it serves, and its investors the taxpayers. Because of democracy, the taxpayers have a much larger role than private sector investors, they are more like customers. Each agency and division needs to think how it maintains a stellar positive relationship with its investors and customers, even through reductions. Each agency needs to be committed to continuous improvement. (see Edwards Demming and the Toyota Way) For some, the government can do no right, in contrast, I want government to succeed and most Oregonians do too.

(see Michael Lerner's early 90's insights into compassion in times of economic stress in the context of government)

Demand for services are up as they always are in times like these. The Governor is off the mark with his proposed cuts to services. State workers laid off will be added to the unemployment roles and we'll be right back where we started in a hole.

Hard to imagine the rain falling any harder than it is right now.

Then you're not really trying. It is GOING to rain harder next biennium. Potiowsky told us that today. $2.5 billion shortfall!!! Frankly, his forecast should be the final nail in the coffin of those who want to use the education stability fund this year instead of waiting until it gets really bad.

The problem with Chuck's suggestion above that we should blow every dollar we have in the bank now is that it assumes there is no cost to such a spending spree. Just push the money out the door and we'll worry about next biennium. . . next biennium!

The reality is that such imprudence will actually make the cuts deeper next year. Right now, we're looking at cutting five school days. That's significant, sure, but in 2009-2011 we're going to be wishing we could get away with only cutting five days. Option A is to cut five days this year, then use the ESF to keep the cuts to maybe five days next year. Option B (Chuck's option) is to use the ESF so there are no cuts this year, then cut 10+ days next year. Honestly, why would you want to do that? Why would you want to force a deeper trough rather than try to smooth out the reductions?

Things are going to get worse, and pretending they might recover quickly is pretty irresponsible given all the economic data we have before us right now.

But TJ, spending a few hundred million from the reserve funds between now and June won't make a bit of difference in terms of overall economic growth in 2009-11. That's the point that you're missing. Any economic stimulus that money will have -- and in Oregon's $125 billion economy the ESF is less than one-half of one percent -- will be the same if you wait until July 1st. And the COST of spending it now is that you're focusing the necessary cuts on next school year rather than smoothing out the cuts over two school years.

There seems to be a growing mantra among progressives that all government spending is stimulative, and therefore spending more in a recession is always good for the economy. This belief is not dissimilar to the Republican orthodoxy around tax cuts, that they are always forces of good. Both beliefs are more grounded in ideology than facts, and neither is accurate.

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