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It’s Not a Budget “Shortfall” It’s Really a “Windfall”

December 9, 2016

House and Senate Republicans in the Oregon Legislature need to stop using the word “shortfall” when we talk budget as we go into the 2017 session.  There IS NO “shortfall”.  We have the most revenue in Oregon history.

(From Sen. Doug Whitsett, who’s common sense will be sorely missed):

Last week, Governor Brown released her recommended budget for the upcoming 2017-19 biennium. During a press conference held at her ceremonial office at the state capitol in Salem, Brown made remarks outlining her budget priorities.

She described her priorities as “cradle to career” education, improving the state’s consistently dismal high school graduation rate, expanding health care coverage, investing in transportation, improving access to affordable housing, clean air and water and safe communities.

While those seemingly lofty goals are admirable, the governor’s recommended budget clearly shows they are unaffordable as presented. The proposals would cost about $1.7 billion more than the state has to spend. Her rhetoric undoubtedly sets the stage for many months of pleas for tax increases. Those appeals are certain to dominate the upcoming 2017 legislative session.

Brown stated that “revenue reform” is still needed to align the state’s resources with its “aspirations.” She added that our needs as a state are growing while existing resources are not keeping up with costs to pay for the demands. For these reasons, she proposes nearly a billion dollars in new and expanded taxes.

This is the same tired rhetoric employed since the onset of the great recession in 2008. But according to her own executive staff members, Oregon is leading the nation in economic recovery. Why do Oregonians require more state services when our economy is supposedly thriving?

Having spent much of my legislative career as a member of the budget-writing Ways and Means Committee, I have an entirely different perspective.

Oregon’s General Fund and lottery revenues are projected to grow by $1.3 billion over next two years. My office has verified through the Legislative Revenue Office that the state has more revenue coming into its coffers than at any point in its entire history.  But the Governor’s budget proposes to spend about $2.8 billion more than ever before.

Furthermore, the Taxpayers Association of Oregon Foundation has determined that Oregon is the highest tax and spend state in the Western United States. Total government spending in Oregon, divided by the state’s population, equals over $8,000 per resident. That amount is nearly double what government agencies in Utah spend, and well above that of our neighbors in Washington and California. Overall, Oregon’s state and local governments spend more money per capita than all of the others in the region, as well as 39 other states.

Here is the State Income Tax Collections report from the state’s census bureau for collections over the last 10 years or so :

Below are data from the Census Bureau on total state tax collections per year for the last 9 years.  The 
data goes back to the prior cyclical peak in 2006-07, so safe to say that collections are at a historical 
2013-14:  $9,683.6
2012-13: $9,160.9
2011-12: $8,728.1
2010-11: $8,017.4
2009-10: $7,475.1
2008-09: $7,115.0
2007-08: $7,487.9
2006-07: $7,742.9
2005-06: $7,590.3

So the point here is: STOP using the word “shortfall” and instead a lack of fiscal management by the Democrats.  There was $1.8 billion more revenue two years ago and $1.3 billion more for 2017-19.  That’s NOT a “shortfall” but instead a “windfall”! (Definition: a piece of unexpected good fortune, typically one that involves receiving a large amount of money.)

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