PROBLEMS WITH THE OPAQUE STATE OF OREGON BUDGET

PERSPECTIVE FROM THE 19TH 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.

I defy you, even if you are a budget expert, to make sense out of the State of Oregon budget.

It is impossible.

Some contend that Oregon runs a transparent system when it comes to developing a biennial spending blueprint. I disagree.

I contend that the budget is opaque.

You cannot tell where money is going, for how long it is going and what it, the money, will fund.   That includes “general funds” (individual and corporate tax revenue), federal funds, “other funds” (money paid to state government through fees and other assessments), and lottery funds.

Still, there is at least one virtue with the budget. It is that expenses must be in balance with income.

Consider that reality for a minute and note how far away balance is in relation to the federal budget where deficit spending always results and is intended.

Let me emphasize that I do not necessarily ascribe ill intent to those who develop the State of Oregon budget, either elected or appointed officials. I just think genuine transparency is not a goal, so, of course, it is not achieved.

Other than the balanced budget requirement in Oregon, consider these budget realities in Oregon (and give me credit, if nothing else, for finding alliteration, even if it is a bit stretched on one occasion below):

Supplanting: This is what occurs when new money comes into state government to fund a specific program, then legislators on the Joint Ways and Means Committee, take “general funds” out from behind the new money, thus neutering the purpose and effect of the new.

I experienced this repeatedly when I represented hospitals and insurers for more than 20 years at the Capitol. I knew supplanting happened; just couldn’t do much about it, though I tried repeatedly.

A new example of supplanting is occurring as I write this at the Capitol. Senate Republicans are concerned that, if the business sales tax passes, providing $2 billion more supposedly for schools, money will be taken out from behind for other purposes, thus reducing the potentially beneficial effect of the new money for K-12. 

Update: In a development yesterday, Monday, Senate Republicans returned to the Capitol after reaching what they called “a deal” with Senate Democrats. It appears that the deal does not include any changes in the sales tax bill since it passed the Senate and was sent on to Governor Kate Brown. So, watch for supplanting.

Sweeping: In some ways, this is more egregious than supplanting because, when it occurs, it violates the will of the taxpayers who provided the money in the first place.

An example will make my point.

What legislators have done in recent years is levy a tax on commercial health insurance premiums to create a repository of “state money” that can be used to garner federal matching funds under Medicaid.

To support the premium tax, legislators said the money would go to help put kids on insurance if their families could not afford it on their own.

What happened?

Without much, if any, hesitancy, legislators said they intended to “sweep” the money to fund other programs, thus not keeping faith with assurances made to payers.

Sojourning: I stretch to get to this “S” as a way to indicate that, in many cases, new money “sojourns” in its intended place for only two years, then becomes just general money for use wherever legislators want to deploy it. Thus, the money sojourns in its location only temporarily.

The best current example goes back to the sales tax on Oregon business.

If most of the $2 billion in new tax revenue goes to K-12 for the first biennial budget, the money will just become “fungible” in succeeding biennia.

Pardon the budget word “fungible.” It just means that the money targeted for K-12 schools won’t necessarily all go to K-12 after the first two years.

There are ways to improve this situation.

  • Outlaw supplanting so new money improves programs rather than allow diversion by
  • Outlaw sweeping because it violates the trust of the people.
  • Be very clear about the sojourning issue – if new money becomes “just money” in the future, say that in an attempt to restore trust in government budgeting.

These are just a few of the reforms I would propose at the Capitol in Salem if I were, perish the thought, king for a day.

With such reforms, state budgeting would become, in fact, transparent.

 

 

 

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