Ready to push the reset button?

Kari Chisholm FacebookTwitterWebsite

In today's Oregonian, Governor Ted Kulongoski reveals that he's been doing some hard thinking about how to fundamentally restructure Oregon's budget and tax system. And that he plans to make a big push after the legislative session.

He doesn't have any firm proposals just yet, but he's thinking about asking voters to restructure the tax system to roll back (?) or reform (?) the changes made by Measures 5 and 47/50. He's also thinking about shifting control of schools to the state government (presumably so that the state can make tougher budget choices). And he's thinking of asking voters to reconsider criminal sentencing in the wake of the massive increase in prison spending brought on by Measure 11.

[T]he governor told The Oregonian that he's waiting for the right time to put the spotlight on his proposals, which could include revotes on such game-changing initiatives as Measure 5, the property tax limit, and Measure 11, which set stiff minimum prison terms for violent felons. ...

Now, he says he wants a hard look at possibly repealing or changing the property tax limits voters approved in 1990 and again in 1997. If not, he said, he may push for giving the governor and the Legislature much more control over how school money is spent, including the possibility of state-appointed superintendents.

Another topic will be the state prison system and whether the state has gotten too lopsided in how much it spends to incarcerate criminals as opposed to educating students and providing care to the needy. ...

It will take some outside-the-box thinking to bring Oregon through the recession without massive teacher layoffs, school closures, higher tuition and a leakier safety net, he said.

He gave one example: What if, he said, Portland built a 2,000-room hotel adjacent to the Oregon Convention Center and on the bottom floor opened the first and only state-owned, full-service casino? "Dedicate all the profits -- 100 percent -- to schools."

It would be a success, he said, but "my staff hates the idea," and he guesses Portland would never go for it. But a few more years of flat or feeble growth in the economy and resistance might soften, he said.

In the meantime, he is gearing up for a discussion about making what could be some of the most difficult changes in state government in decades.

What are your initial reactions to these ideas? And if you could push the reset button, what would you change? Where would you find new revenue - and what spending would you end?

Let's think out loud together.

  • (Show?)

    My reaction to the ideas are very, very positive.

    My reaction to the Governor really leading this charge is very mixed. I agree with Steve Novick (quoted in the article), what reason is there to wait another six to nine months to lead this charge?

    Let's take advantage of the political winds and fix Oregon's revenue system for good. Get rid of Prop. 5 and the kicker.

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    Put these on the table:

    To get more revenue, the Gov needs to work with our Congressional delegation so that more of the federal stimulus funds can be used by state governments to fund schools, human services, and other state funded services. We should not be laying off teachers while building bridges (especially a $4.2 billion one). And he should support changes in federal laws to legalize marijuana, so that states could regulate and tax its sales (if we don’t change our drug laws, Mexico will continue to descend into chaos).

    For higher education, he should privatize the Oregon University System and move to a system of scholarships for Oregon high school graduates. We can no longer afford a traditional, high-cost, brand name sports oriented higher ed system. If they do not want to change, let them compete on their own. Community colleges should remain public but be pushed to offer more online and study abroad courses.

    For K-12 education, the Gov should invigorate the study of foreign languages. It should become the norm for a high school student to spend a year studying abroad. The global economy will be very different for today’s students. His failure to do anything on this issue so far leads me to question his proposal to shift "control of schools to the state government."

    The Gov should propose a substantial, phased-in, revenue neutral gas tax to cut carbon emissions, give incentives to alternate forms of transportation energy, bring home some of the funds we send abroad for oil, and reduce our funding of petro-state hostile to us and to their own peoples.

    Casino/hotel in Portland, not for me.

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    He's also thinking about shifting control of schools to the state government (presumably so that the state can make tougher budget choices).

    So, the implication is that the legislature and governor are less susceptible to special interest lobbying than local school boards and therefore will be cutting tougher deals with unions? (That's what "tougher budget choices" mean, after all.) Such a scenario seems a little hard to believe.

  • Bob Baldwin (unverified)
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    So, Teddy is finally going to start proposing fundamental change for a broken system? But only after another legislature adjourns? <sigh>

    Repealing Measure 5 just reinstates the old property tax problems. What needs to be "repealed", immediately, are the tax breaks given to corporations, particularly in the apportionment formula for multi-state corporations.

    Rather than taking control of local education districts, how about giving local school and community college districts the authority to place general revenue proposals on the ballot?

    Frankly, state-owned casinos isn't the worst idea I've heard, and it's probably more politically possible than a sales tax.

  • Douglas K. (unverified)
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    The legislature needs to work out a replacement for Measures 5 and 47/50. Both passed by low-single-digit margins in the 1990s. Even back then, voters would have been amenable to a better offer than a simple "yes/no" vote on whatever McIntyre or Sizemore hacked up. Even taking as a given that voters want some kind of property tax limits, there are better ways to do it than what we have. Limiting tax relief to one's primary residence would be one way to go about it.

    I don't want the state government in control of public schools. Public schools should be locally funded, locally controlled. That means, at very least, we need to modify property tax limits to permit stable, locally controlled school funding. Those communities that want to raise more money for their schools should be able to do so without having to beg a potentially hostile legislature for more money. We probably should have a system where a baseline level of state funding is guaranteed (say, $5,000 per student, inflation-adjusted), and local governments can raise their property taxes to whatever level they want to deliver additional school funding.

    As for casinos, I'd like to see seven more casinos in this state: one for each state university. Put PSU's casino in Multnomah County, Western Oregon's in Marion County, U of O's in Lane County, and so forth. The revenue from each casino can pour into a permanent endowment fund for its affiliated university. The endowment can fund capital projects, permanent academic chairs, and scholarships as it grows. Take 10% of the gambling revenue from each casino and steer it to local governments to deal with gambling addiction.

    We need to cut prison spending. The legislature can modify Measure 11 sentences by a supermajority vote. No voter approval needed. Just bring back a system that imposes consistency and rationality on sentencing, and preferably one that wastes a lot less tax money than the current system. With modern electronic monitoring (GPS systems and web cams) being dirt cheap, we should make MUCH more extensive use of house arrest than we currently do. Who cares if an auto thief is sitting in a prison cell for three years at $30,000 per year to the taxpayers, or grounded at home being fed at his family's expense for three years, as long as he isn't out stealing cars?

    We should raise the gas tax 5 cent per year for twenty years, with the first nickel phased in three years from now. Let everyone know the big gas tax hike is coming, and let them start buying new cars in anticipation of higher taxes.

    Replace the weight-mile tax with electronic freight-only tolling of all state highways. Set the tolls just high enough to provide full on-going maintenance of all roads, freeways, bridges and tunnels in the state highway system. Freight haulers have been wanted to get rid of the weight-mile tax for years; it's much easier and paperwork-free to just put a transponder in every truck and toll them based on size of the vehicle and distance traveled.

    Also, take state parks off the general fund. Put in a statewide 5% lodgings tax (hotels and motels) dedicated to state parks. In combination with other dedicated funds, this should make Oregon's state park system permanently secure without needing to compete with schools and prisons.

    We need to sunset tax credits. All of them. Any tax credit in the tax code needs to be voted on every few years, just to check that it's still doing the job it was designed for and still addresses a public priority.

    Final way-outside-the-box thought: We don't need a change in federal law to sell marijuana in this state. Yes, the federal government can and does regulate the private sector, but it can't directly regulate the functions of a state government. The State of Oregon could raise cannabis on state lands, process it into marijuana in a state facility (say, our prisons, which are supposed to run prison-labor programs anyway) and sell it in personal-use quantities to licensed Oregon residents through state-owned liquor stores. That could be a decent source of revenue while all but eradicating illegal pot trafficking in Oregon, and the federal government couldn't do anything to stop it (at least directly -- Congress could do something like cut off highway money. But I suspect a Democratic Congress would be a bit less likely to pull that sort of thing). (Side benefit of processing the stuff in prisons: if we give inmates regular access to weed, it could go a LONG way to cutting down prison violence.)

  • Chris Andersen (unverified)
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    Times are changing. 4 years ago the double-majority rule, the kicker, and measure 5 were sacrosanct. Anyone proposing a change to them would have committed political suicide.

    Now the double-majority has been eliminated by the voters. The lege is talking about throwing out the kicker completely. And now Kulongoski is talking seriously about reforming/repealing Measure 5?

    Could this be the progressive version of The Shock Doctrine?

  • Joseph (unverified)
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    I love the casino idea. I've been a proponent of that concept for over a decade, although I always figured it would end up somewhere like Wilsonville or Troutdale (anywhere that decided to entice a developer before Portland would do so), but a convention center casino really isn't a bad idea at all.

    I also support school district consolidation (rather, consolidation of the many, many varied government and government-like local districts/entities - from school and parks districts, to water/sewer districts, to fire and law enforcement) into logical (i.e., regional) entities.

  • Buckman Res (unverified)
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    ...Portland built a 2,000-room hotel adjacent to the Oregon Convention Center and on the bottom floor opened the first and only state-owned, full-service casino?

    This is the most creative thing to come out of the Governor’s office since he landed the job. My only suggestion would be to site the casino/hotel where Memorial Coliseum now sits. It would go a long way to rejuvenating an area that’s never lived up to expectations.

  • The Machine's Dead, Not Hung (unverified)
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    Open, public contract bids for every IT project.

    A new vehicle class, heavily taxing large personal vehicles.

    Abolish the Oregon Liquor Control Commision.

    Establish PUDs in Portland, Eugene, Salem and Bend.

    Raise out of state tuition to match cost and provide 100% assitance for those in state.

    Establish performance/pay criteria for education administrators. Tie max admin pay to max teacher pay.

    Abolish the kicker, use the money for the current education year.

    Align the current state prison population with today's sentencing guidlines. Pick a point in between that we can afford, past, present and future, rather than it being impossible to get locked up today, while personal use drug felons do 25 year sentences, passed down ten years ago.

    Abolish H1-4 visas when unemployment goes past 10%.

    Quit investing money in things that require us to have a permanent majority of dumb people, like a casino.

  • Douglas K. (unverified)
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    Quit investing money in things that require us to have a permanent majority of dumb people, like a casino.

    What better way to fund education than a tax on stupidity?

  • LT (unverified)
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    I agree with this:

    Posted by: Bob Baldwin | Apr 6, 2009 11:33:49 AM

    So, Teddy is finally going to start proposing fundamental change for a broken system? But only after another legislature adjourns?

    <<

    Does Ted really think we are stupid? Or is he the imperial Ted as that time during the primary when a representative of the campaign said (after the audience had heard a primary challenger answer every question asked) "The Governor is doing what Oregonians want done". ?

    ENOUGH ALREADY!

    Either Ted has some worthwhile ideas which the legislature should be discussing, OR he wants the publicity of making a big splash of his ideas when the legislature is not around to debate them!

    We need to rethink all kinds of things in this state. Starting with having elected officials discuss their ideas with the general public as if the public is intelligent.

    Tax cuts don't end budget shortfalls, which is why the GOP "Mainstreet Incentive" program is stupid. Also, do they really think a family barely hanging on is going to remodel just because the GOP wants them to have a tax break?

    But stupid as that idea is, it is an idea.

    Other ideas are being debated incl. changing the kicker and sunsetting tax breaks. We have no clue where the Gov. stands on any of those ideas, but we should patiently wait until he graces us with his presentation?

    The legislative branch should rise up in rebellion at that arrogance!

  • Terry Parker (unverified)
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    The problem with the Oregon tax system is that it relies to0 heavily on collecting revenue from individuals and families instead of collecting an equal amount from big businesses and large corporations. Half a century ago the split was closer to 50 - 50. Any new plan should set that 50 – 50 rate as a target. However with Oregon’s elitist Governor leading the charge, such an equitable split is highly unlikely.

    So far, all the Governor’s tax, subsidy and initiative policies have been about creating and dictating more social engineering, not about balancing revenue being collected from a variety of sources. Examples include everything from his excessive tax credit give-a-ways to big business from the energy trust to not taxing freeloading bicyclists to pay for bicycle infrastructure. When the Governor, walks like a socialist, talks like a socialist, he must be a socialist.

  • John Brook (unverified)
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    Please explain how rolling back M5 will help? According to my calculations, M5 isn't limiting my taxes. I doubt it is limiting anyone's. Basically the Governor is proposing is higher property taxes? On people who are already struggling? Hello? I don't think the Governor understands the property tax structure very well.

  • LT (unverified)
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    The tax system in this state (property taxes, indiv. income taxes, business taxes, etc.) is out of whack.

    Mere repeal of Measure 5 alone would just cause chaos--do we want to go back to the old days of "sorry, the fire dept. or library or school or whatever will close if you don't pass the local levy?"

    These days there are people who would have trouble paying any higher property taxes, and perhaps are struggling to pay the current ones.

    BUT, there were changes M.5 made which should be discussed. And I am all in favor of open public discussion of all these ideas rather than "Here's a great idea, let's do this...".

    There was a change in how property was valued in Measure 5 which worried county assessors--from assessed value to real market value? Something like that. There is a whole generation who don't recall those debates. For the first time last year, a baby born the year M. 5 passed was old enough to vote.

    There were "shift not a gift" aspects to M. 5 which need to be explained to those who weren't here in 1990. Operating from rusty memory here, but there was something about altering the balance between business and individual taxes, and something about the property tax rate going up every time the property was sold. So, for instance, if you live in a home bought in 1989 and the home across the street has changed owners several times over those years, something like you having a lower property tax bill than the current owners of that home across the street.

    M. 5, btw, is one of those measures which argues for SJR 11, the indirect initiative. Had it gone through a hearings process, it would have been better understood and perhaps less convoluted in the way it was written.

    Terry, do you think the Gov. should present his ideas while the legislature is still in town? Or is calling him a socialist all you wish to do?

    I'm a stickler for definitions of words.

    Socialism is defined in an online dictionary this way:

    "a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole."

    What exactly has Ted done to be "socialist"? Not be a Republican "tax cuts cure all ills" type?

    For all his flaws, I have not seen Gov. Ted advocate taking over industries on behalf of the community as a whole. One might argue TARP and the GM bailout might fall under that definition, but what has Ted done?

    Talk about changing the tax structure is not socialism, at least not to most ordinary folks.

  • John Brook (unverified)
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    LT, you are talking about M47/50, not M5. M47/50 hasn't really done much to limit property tax. Local levies just bypass it.

  • mp97303 (unverified)
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    Would it be constitutional to make a convicted non-violent offender the following offer:

    Take $5000 and a bus ticket out of state. Don't come back *If you do, you serve your jail term in full plus repay money.

    It might be silly, but just a thought.

  • mp97303 (unverified)
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    That should have been $500

  • Bill Bodden (unverified)
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    Quit investing money in things that require us to have a permanent majority of dumb people, like a casino.

    What better way to fund education than a tax on stupidity?

    How about a citizenry with the character to step up to the plate and pay their dues in accordance with Justice Holmes dictum about taxes being what we pay for a civilized society? Encouraging dumb people to become suckers guarantees that they will continue to be foolhardy so that they may very well inevitably prove them to be a burden on society.

  • LT (unverified)
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    47/50 was the Sizemore invention and a spineless legislature which didn't want to anger Sizemore by taking it to court. It brought us double majority, among other things.

    Measure 5 was a McIntire measure building on the work of Ray Phillips. It only passed in the NW quadrant of the state but they had the most votes. It was the original anti-property tax measure to succeed. I do believe that was the one which the assessors were so worried about, and the one which said if one property remained with the same owner over the decades and the other property across the street changed hands several times, the 2 buildings could be identical and still have different property tax bills.

    M.5 was passed in a good economy and thus the drastic cuts didn't hit right away. The kids who were in high school and graduated in the years right after the passage of 47/50 are the ones who are in the generation of our new young legislators.

    It is time to revisit all of this in an OPEN PUBLIC forum. Which is why I am so angry that a Gov. who once was a legislator wants to wait for the legislature to leave town before publicly proposing his own ideas. Who does he think he is?

  • StephanAndrewBrodheadForCongress (unverified)
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    We pay over one thousand a month just to live in Oregon!

    Gambling is a tax on stupidity!

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    I support the repeal of Measure 11, but sadly I don't think you'd get enough lawmakers to support it. We need to go back to putting rehabilitation back into the prison system rather then making it a punishment only system.

  • SCB (unverified)
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    Starting off where I left off on Chip Shield's post about foster care -

    Oregon is Broken!

    We have a mix of mandates and revenue restrictions that will get worse over time if left unchanged. Measure 5 put a limit on local government income from property taxes. Measure 50 limited the increase in that revenue to 3% per year, which is often less than inflation. Measure 5 moved the expense for schools from local property tax to the State General fund. Due to the limits on property taxes for schools per Measures 5 and 50, the General Fund part of what is required for schools will be forced to grow every year. Thanks to Kevin Mannix and his friends, we have prison mandates that will force our prison populations to grow. The outcome of just these voter approved mandates is that eventually the State General Fund will be forced to spend money on only schools and prisons. All the rest of the "non-mandated" programs such as foster care, alcohol & drug treatment, senior programs, State Parks, State Police, the Oregon Health Plan, the OSU extension service, Pioneer Cemetery maintenance, the State Fair, etc. will have to be eliminated from the budget - entirely.

    At some point we have to restructure Oregon's mix of mandates and revenue restrictions, or Oregon will cease to exist as a true State. We are on the road to social services at the level of Romania (at its worst).

    So, late is better than never, the Governor is on the right path.

    I support all that the Governor is thinking about, let's get out there and do it!

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    LT writes: Mere repeal of Measure 5 alone would just cause chaos--do we want to go back to the old days of "sorry, the fire dept. or library or school or whatever will close if you don't pass the local levy?"

    I'd say "yes." Right now, there is an utter disconnect between the way many local services are funded and how citizens view the tax system.

  • J Loewen (unverified)
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    Perhaps our "brave" Governor is waiting until the next legislature to lead the charge? ROFLMAO As usual he's a decade late.

  • Kurt Chapman (unverified)
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    If I could reset the button I'd have the last election changed that put Gov K back into office. This lame duck person is no leader and has been MIA now for two recession cycles at the state helm. Shame on the rerpublicans for not putting any reasonable alternative forward in the first election.

    If Governor K has any worhtwhile ideas he should be out there NOW trying to get support. Repeal Measure 5/50? Good Luck, he knows it is a political non-starter. The same goes for centralized control over public school districts. Now that one would send folks scrambling to local charter, private and religious institutions in a heartbeat.

    I'm glad Gov K finally has "some ideas". Unfortunately he is more than a day late and $3BB dollars short.

  • Bill Bodden (unverified)
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    If I could reset the button I'd have the last election changed that put Gov K back into office. This lame duck person is no leader and has been MIA now for two recession cycles at the state helm. Shame on the rerpublicans for not putting any reasonable alternative forward in the first election.

    How about shame on the Democrats for just offering the lesser of two evils?

  • oneruraloregonian (unverified)
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    The centralization of services and corresponding revenue or lottery dollars to fund the type of bureaucracy needed to run state agencies and their programs is usually very inefficient.Why not look at returning some of the programs back to local control?

    For instance, OECDD uses a lot of its dollars in top end administration as well as endless studies. Who knows better than the folks that live in the community as to where to direct their economic dollars.I say, let the dollars collected at the local level stay there for economic development purposes.

    Why not return to the local jurisdiction the dollars collected for schools? Many of Oregon's rural schools were doing fine, and many had programs equivalent to the larger metro areas before the dollars were centralized at the state level. Citizens were more willing to fund school programs when they were assured that their tax dollars were actually going to the schools in their communities and could require fiscal accountability from the school board.

  • J Loewen (unverified)
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    How about shame on the Democrats for just offering the lesser of two evils?

    We had two better choices in the primary but the money was with T.K. I voted Green in November because I wasn't convinced the R was worse. Both offered nothing as far as I could see.

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