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Measures 59, 61 take $1.4 billion in revenue October 1, 2008

Posted by FairSentencing in : Current News , trackback

The following post is from Salem Statesman Journal, written by Ron Eachus. To go to the Statesman Journal website, simply click here.

Pundits, analysts and even the presidential candidates themselves agree that the size of any pending federal bailout of Wall Street will severely constrain the government’s ability to address other problems and priorities.

And that’s in a budgetary environment where the federal government can spend itself into deficits.

What happens when a state government that is required to have a balanced budget gets hit with a big loss in revenues or is required to spend money on new initiatives without any provision for new revenue?

Oregon is likely to find out if two ballot measures by the initiative-addicted Bill Sizemore and Kevin Mannix pass in November. According to official ballot measure financial impact statements, one, Measure 59 from Sizemore, takes away nearly $1.2 billion in revenues. The other, Measure 61 from Mannix, would require spending an additional $161 million to $247 million.

Taken together, that’s a big $1.4 billion hole in the state budget, and neither measure provides a single dollar in new revenues.

Sizemore’s initiative to provide unlimited deductions for federal income taxes of individual state returns is a retread of Measure 41 from 2006, which the voters rejected 63 percent to 37 percent.

Income taxes account for about 89 percent of the state general fund budget.There are about 1.8 million taxpayers in Oregon. But most of them, an estimated 1.3 million, won’t benefit from the measure because they already can deduct all their federal taxes under existing limits.

Only 500,000 Oregon taxpayers will benefit: the ones with higher federal income taxes. The ones in the higher income brackets who don’t depend as much as the rest of the taxpayers on the services the general fund provides. Services such as education, public safety and assistance for children, the elderly and disabled.

The expected loss of revenues from Measure 59 is estimated at nearly 9 percent reduction in general fund resources in 2009-11, growing to 13 percent in 2011-13.

Mannix’s measure also is a retread of sorts. In 1994, a Mannix initiative passed requiring increased mandatory sentences for violent and sexual offenders. As a result, Oregon began a prison building spree that doubled the Department of Corrections debt service and left Oregon spending more on corrections than it does on higher education.

This time, his measure requires increased minimum sentences for certain drug and property crimes. The state already plans two more new prisons with 3,500 beds. But Mannix’s initiative would add an estimated 4,000 to 6,000 additional inmates, requiring more new prisons and making it harder to fund the cheaper but more effective rehabilitation and treatment programs that reduce these crimes.

The effect of both measures is to restrict the ability of state government and the Legislature to take into account the big picture. Budgetary initiatives with a single issue focus ignore the overall effect on the necessity of state government and the Legislature to balance state priorities.

The Sizemore and Mannix reliance on the initiative process is designed to isolate their pet issues, and themselves, from the rest of the budget by requiring spending on certain services or by reducing revenues for all services.

There is no “pay as you go” philosophy in these initiatives. There is only constriction and restriction. The ability and the flexibility of government to put together a budget, and to be held accountable for it, is taken away.

Sizemore and Mannix have offered themselves to the electorate as general election candidates for the state’s higher offices in the past. Each time, they were rejected.

When the public was asked if they thought these two could be trusted to take a wider view into account and lead the state through the difficult task of weighing and managing compelling and often competing priorities, the majority said no.

This year, they should do the same to their initiatives.



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