by RaeLynn Ricarte
It is almost a law of nature that politicians will spend money as fast as they can — and then look for new ways to dig even deeper into taxpayer pockets.
When they can’t get tax hikes approved, bureaucrats increase “user fees” or “surcharges” (taxes by other names) in an effort to avoid spending reductions.
The amount of income the average taxpayer turns over to Uncle Sam and his local and state cohorts is enough that Tax Freedom Day will be observed on or around April 21 of this year.
The Tax Foundation calculates Tax Freedom Day to illustrate the proportion of U.S. income diverted to fund the annual cost of government programs. Oregon is rated as the 16th highest tax state in the country.
Of course, Tax Freedom Day doesn’t factor in repayment of the whopping $18.1 trillion federal debt that grows by an average of $2.38 billion per day...
Oregonians have attempted to get government spending under control through a series of laws.
Measure 5 and 50, approved in the 1990s, set limits on the amount of property taxes that can be collected.
The “kicker” refund was incorporated into the Oregon Constitution as another spending restraint on government. The law seeks to ensure that, when the state over-collects money, it goes back to taxpayers.
In 1979, the Legislature approved the kicker law due to increased concern over rising property taxes and inflation.
The issue was brought before voters in 1980 and approved by an overwhelming margin. In 1999, the Legislature referred a measure to the ballot that amended the constitution to include the kicker law, making it more difficult for politicians to get their hands on this money.
The trigger for the kicker lines up with the state’s budgeting process; economists do their best in odd-numbered years to project how much money the state will take in during the coming two years.
At the end of the two-year period, actual collections are compared with projections. If state revenues are 2 percent or more above projections, then the entire surplus must be returned.
Critics of the refund contend the money is vital to education and other essential services. They argue that the kicker law prevents Oregon from building up a fund to cover costs during a recession.
America already spends more than any other country on education, but I’ll defer the discussion about how well that is working for another day.
I believe that it is vital to the private sector, which funds government services, to retain as much income as possible, especially during tough economic times. Families are now struggling with higher costs at the grocery store while wages remain flat.
Every time I hear government officials bemoaning the fact that Oregon’s laws prohibit them from obtaining the tax revenue they need, I wonder how much they would take if allowed?
Look for movement in Salem this year to eliminate the kicker.
What you are unlikely to see are true spending reforms because “living within your means” is a foreign language to politicians.
by Mark Gibson
When Oregon voters rolled back and limited future growth of property taxes in 1991, they lost not just the local control that came from funding their children’s education, they shifted that responsibility to the state, trading the stability of property taxes as a funding source for the up-and-down cycle inherent in the state-wide income tax.
Students attending school in the good years have enjoyed the benefits of a good economy: Sufficient teachers, inspiring electives, art and music.
Students attending school during bad economic times have suffered from the subsequent loss of funding: Insufficient teachers, shrinking elective choices, less time in class.
In the meantime, available jobs have increased in sophistication, and the educational baseline for entry-level workers is higher than ever.
The high unemployment rates of the “Great Recession” are dropping slowly, and one of the reasons for that sluggishness is the lack of sufficiently educated workers.
With the reins of education firmly in the hands of the state, Oregon voters adopted the “kicker” refunds in the hope, apparently, of forcing the state to live within its budget during good times and bad.
The refund is based on a two-year-old prediction from the state economist. I would rather have responsibility for spending in the hands of the men and women we have elected to our state legislature and governor’s office than base our future on the vision an economist saw in his crystal ball two years ago.
If the state is spending too much on administration and pet projects, we can demand better management. If they are they wasting our money, we can replace them. Our lack of control over state spending is a matter of apathy and lack of engagement.
Education, whether you are looking at K-12 or higher, is too important to subject to the whims of a volatile economy.
Education is our future, education more than anything else can drive our economy forward. But to do so, there has to be stability. Don’t get me wrong, there are plenty of problems with our current educational system.
Bad teachers continue to teach, year after year, simply because they have been teaching (badly) for a good many years.
And our adoption of China’s test-centric educational model is all to the bad; high scores look great on paper, but they have little meaning in the working world where innovation and creativity drive success far more often then parroting answers. We need schools that are able to support a dynamic, well-rounded educational system, with opportunities for all.
A system that doesn’t churn out athletes and test takers, but encourages the growth of artists, engineers, entrepreneurs, scientists and engaged citizens.
If we throw up our hands in despair and simply say “the state doesn’t know how to spend our money and so we ought not to give them any,” we are giving up on representative democracy itself. The personal “kicker” ought to follow the corporate “kicker” and go to a “rainy day fund” to help stabilize education funding — and we should accept the responsibility of demanding fiscal leadership from our government so those funds are not wasted.
Commented