PERSPECTIVE FROM THE 19^TH HOLE: This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as a Congressional press secretary in Washington, D.C., an Oregon state government manager in Salem and Portland, press secretary for Oregon’s last Republican governor (Vic Atiyeh), and a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.

…This is the first of several blogs outlining criticism of State of Oregon budgeting processes, which is important as voters here consider a major new tax increase…

Head down a back hallway on the first floor of the State Capitol in Salem and what do you find?

A back room where legislators and budget staff hammer out the State of Oregon two-year budget beyond the glare of public view.

It used to be called “a room with a blackboard” on which staff wrote big numbers reflecting proposed commitments to the largest budget categories – K-12, higher education, cop and prisons, and social services, including health care.

These days, there is a “whiteboard.”

But the point is the same. Proposed allocations of the state budget are discussed and agreed upon in private. Yes, of course, ratification occurs in public, but the deals are cut in the backroom, then simply endorsed blandly in public.

I outline this to underscore a reality: It is impossible to understand what goes into the State of Oregon budget and how one fund relates to another. I would defy even an acknowledged budget expert to uncover the interrelated details.

I have tried. And, while I may not be a “budget expert,” I have lobbied state budget issues for more than 25 years (see footnote).

The basic problem can be summarized in one word – supplanting. Supplanting occurs when money comes in to state government for one purpose, the money is used ostensibly for that purpose, then other resources are taken out from behind the original allocation, thus making the “new money” ineffective.

Supplanting can be difficult to understand and almost impossible to track through the corridors of state budgeting processes. But it is critical concept and one that renders state budgets nothing if not opaque, even as legislative budget leaders trumpet transparency.

Let me cite a few examples to illustrate my point.

HOSPITAL TAXES: In 2003, state officials decided to do what most other states were doing, which is to tax major hospitals, take the tax proceeds into state coffers, and then use the money to generate federal matching funds under the Medicaid program while, in theory at least, paying back hospitals for their taxes.

Sounds good, I suppose, especially if you believe that state government needs more money to do so-called “good work.” This was a scheme, albeit legal, to garner the federal matching funds and bring the money home to increase support for health care programs.

But, I would defy anyone to prove that the money actually went to fund expanded health care programs. What happened was typical legislative sleight of hand. Sure, the “new money” went to health care programs, but, behind that, legislators and their budget took “general fund” money away and directed it instead to K-12.

Supplanting occurred in spades.

HEALTH INSURANCE TAXES: Or, consider another let’s “hide the real purpose” legislative construct. This time, it was a proposal to impose a one per cent tax on top of all commercial health insurance premiums.

The tax proceeds would flow to the state, where, again, much like money in the hospital tax, they would be used to garner federal matching funds under Medicaid. The justification was that the new money would be used to fund health insurance for children who did not have coverage.

What happened?

Not that.

Instead, legislators practiced another budget shenanigan. They “swept” the money from the health insurance fund and used it, again, to fund K-12 education.

Those left holding the bag were private health insurance premium payers who might have been okay helping to fund health insurance for children, but might have not have been okay diverting health insurance money to fund K-12.

TOBACCO SETTLEMENT FUNDS: One of the most egregious legislative slight-of-hand actions occurred with “tobacco settlement funds,” which emerged in 1998 as a result of a court case against tobacco companies.

As part of a $10 billion settlement, millions of dollars were supposed to come to Oregon (as well as other states) to fund anti-tobacco education programs, as well as expanded health care programs.

The money arrived; the result did not.

Instead, legislators diverted general funds behind the tobacco settlement money to fund K-12 education.

Same supplanting story. Second verse.

Oregon likes to talk about itself as a leader in transparent state budgeting practices. But, as these three examples indicate, the truth does not match the rhetoric.

And that should be an important factor as voters consider Ballot Measure 97. There is no way to understand where the new money will go if the measure passes.

What’s needed is simple and straight-forward: An open and candid state budgeting process that is clear about where the money comes from and where it goes.

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[Full disclosure: The author, Dave Fiskum, represented private health care interests in Salem for 25 years. He was at the table in 2003 when the hospital and health insurance taxes were first envisioned and he watched – not to mention opposed – actions to renege on the deals. He also opposed the “sweep” of health insurance taxes and the diversion of tobacco settlement funds.]