Is There a Supply Sider in the House
that may live in infamy: “It’s time to raise taxes.”
Those simple five words led Oregonian assistant editor Dave Reinhard’s
June 6 column, the “throw in the towel column” that helped
set the tone for Oregon’s “head-in-the-sand,” “tax-raising,”
“mind-numbing,” “death-defying,” special session.
Not since Chicago children yelled out “say it ain’t so Joe,”
to Shoeless Joe Jackson in 1919 about eight baseball players fixing the
1919 World Series, has there been such distress about one pundit’s
change of heart—to bleeding heart. Okay, we exaggerate, a little,
but still, Dave Reinhard’s about face, in your face, article that
“everybody needs to give to get a little,” kinda kicked conservatives
when they were down, kinda kicked them in the gut.
Some conservatives even wondered if someone had snatched Reinhard and
replaced him with a middle-of-the-road, let’s-all-build-consensus
Why the kick? Giving a little to get a little…that may be the story
of love…but it’s not the story of how a state in a recession
deals with a budget crisis.
News Bulletin: You don’t raise taxes during a recession!
The popular conservative columnist Reinhard knows that; every one knows
that, silly. Monetarists know that. Supply siders know that. Gold Standard
purists know that. The Chicago School economists know that. Even endangered
species like Keynesian economists sometimes know that.
Thirty-nine states in America know that.
Thirty-nine states faced with budget deficits cumulatively approaching
$50 billion dollars knew that. Wrote James Mayer of The Oregonian two
days before Reinhard did his official towel throwing exercise: “A
recent survey by the National Association of State Budget Offices found
that 39 states have been forced to cut previously approved budgets so
far this year by a total of $15 billion. Governors in 16 states have proposed
spending less in 2003 than they will this year. Twenty-six states have
used across-the-board spending cuts, 11 states have laid off workers,
and three states have encouraged early retirements.” Even the liberal
Minnesota legislature voted to balance the budget solely through spending
cuts, despite libertarian Gov. Ventura’s preference for tax increases.
Oregon, on the other hand, has not…not done any of these things.
While thousands of Oregon businesses have had to look at sobering bottom
lines and cut budgets in ’02, state government has grown by over
92 percent in the last ten years, averaging nine percent a year, yet inflation
is less than two percent.
Folks, this is simple
stuff. Any mathematician, statistician, number cruncher, person with a
stubby golf pencil will tell you that expenses can’t grow at nine
percent a year when revenues are growing at zilch, or retracting.
So why in Oregon is common sense not even given a chance? Why have our
legislators decided to keep themselves, their policies, and the public
immune from business realities? Or as tax activist Don McIntire explained
Reinhard when he was trying
to talk him out of
writing a “pro-tax” column, “If private citizens have
to experience the vicissitudes
of of everyday life, so should the government.”
Besides raising taxes there were many ways to fix the revenue shortfall
that wouldn’t have harmed an already weak economy that the weak
legislature couldn’t grasp:
· Eliminate the Oregon Economic & Community Development Department
and their 140 employees. (They’ve already spent 2.4 billion dollars,
and what they’ve accomplished is creating the highest unemployment
in the nation)
· Privatizing OLCC
· Across the board two percent cuts for all departments (it is
what businesses do during times of recession)
· A hiring freeze
· Eliminate non-essential new programs such as the increases to
the Oregon Children’s Plan (the intrusive program which asks government
workers to make “at risk” assessments of every newborn Oregon
baby: savings $67 million.)
· Restructure Oregon’s PERS system.
· Eliminate excess bureaucracy at Oregon’s Department of
Education (the state has more than 100 employees hired to implement an
exam, CIM-CAM, that students, parents and teachers don’t want.
If all this common sense sounds
like it will take leadership…it will. But leadership we must have.
Because, (one more time the refrain) Oregon has the highest unemployment
figure in the nation, yet it’s also the last state to consider doing
what any business would do when their books don’t balance…that
is…cut spending. If you’ve got the worst economy in the country,
then you have to know that raising taxes will only make that economy worse,
Already Oregonians are starting to feel that this decade is eerily reminiscent
of the early 1980s when unemployment reached 12.5 percent. Already Oregonians
know fellow Oregonians who are thinking of relocating their families,
their companies out of state. Already it looks as if opportunity may be
someone else’s dream…and something that may not happen here
again for sometime.
When the state legislature arrives at an emergency special session in
a rough economy and has only one answer—raise taxes, and when other
states, states that didn’t gut their resource economies, or didn’t
discourage innovation, are reacting so much more “on the mark”
than Oregon—then it’s hard not to want to vote with your feet.
Recessions are man made. We in Oregon seem to be pretty good at making
them. Too good. If we’re smart, we’ll get that towel out of