Salem needs to respect rejection of M97

By Knute Buehler

Portland Business Journal

Before all the votes were even counted and Oregon voters had soundly rejected the taxing, spending and economic arguments advanced by Measure 97 proponents, calls had already begun for another major tax increase on Oregon families and businesses.

The argument goes like this: voters didn’t reject more government revenue, just this particular $6 billion (per biennium) tax. And Oregon’s business community, which led the opposition to the largest tax increase in state history, is now somehow obligated to lead the chargeto raise taxes.

Just as all Americans should accept the results of a long and divisive presidential election, Oregon political, business and government-union leaders should also accept the voter’s judgement on Measure 97. They shouldn’t attempt to cherry-pick what portion of Measure 97 voters actually supported even while 59 percent were voting to defeat it.

Rather than start a new debate over another new tax increase, we should unite behind a plan to balance the state budget without raising new taxes. Remember, we’re in this position because the government sector unions — with acquiescence from Gov. Kate Brown and encouragement from House Speaker Tina Kotek — chose this path. They put a massive poll-tested tax hike on the ballot rather than providing bipartisan leadership for a comprehensive and balanced approach to reforming state taxes, spending, entitlements and pensions.

For too long the government-growing ambitions of Salem politicians have exceeded the ability of Oregon taxpayers to pay for them. On top of that, Salem spending priorities have grown out-of-whack. We’re investing too little in things that create economic opportunities – like K-12, higher education and transportation infrastructure. And, at the same time, spending has grown too fast on programs that treat the symptoms of an uneven economy and below-average family wages. And, of course, the unfunded $22 billion-and-growing PERS liability hangs over everything.

During the depth of the Great Recession, Salem politicians told us we needed to raise taxes to avert a state budget crisis – so we did. Now, with Oregon’s economy at allegedly “full throttle”, according to the state economist, we still have a budget deficit. For the past decade, in good economic times and bad, the message from the Salem establishment has always been the same: we have a looming budget deficit and we need to raise your taxes to fix it.

Rather than asking taxpayers to pay more, what’s needed is stronger leadership from Governor Brown and Democrat budget-writers to put state government on a more fiscally sustainable path. I am certain they will find willing Republican partners in making the tough but necessary decisions. But because Governor Brown and Oregon Democrats set the agenda and write the budgets, it is their responsibility to initiate this process. I am hopeful they will also find an engaged business community ready to lend their expertise in cost-conscious budgeting and willing front-line state managers and workers ready to share their unique knowledge in how state government can innovate and save resources.

In 2010, as Gov. Ted Kulongoski left office, he published a report predicting a “decade of deficits” unless significant changes were made in state government spending habits. He challenged policy-makers to create a more affordable state government. Unfortunately, Kulongoski and his report were ignored, the state general and lottery fund budget has ballooned by 26 percent since 2009, and the PERS problem remains unsolved.

What’s worse is that Salem’s spending culture and misplaced priorities persist. Just last week, when an investigative audit revealed that more than $350 million of the scandal-plagued $1 billion Business Energy Tax Credit program were “potentially questionable,” the response from key legislators was to propose doubling the size of the agency responsible for managing it. Just think where we would be, if during the past decade we had invested that $1 billion into Oregon school kids and college students instead of tax giveaways and subsidies to out-of-state energy speculators and investors.

With a state budget that is roughly 75 percent reliant on income taxes, the obvious solution to generating more state revenue for education – a goal we all share — is to grow the jobs and incomes of Oregonians. As jobs and income grow, so will revenue for education. Growing jobs and incomes should also reduce the demand for government services. Over the long-run, a thriving economy and growing family incomes – not tax hikes – is the best strategy to balance our state budget and adequately fund the services important to Oregon’s future. Let’s get to work.

Read the original op-ed in the Portland Business Journal here.