From West by Northwest.org Voices of the Northwest Sadler's Sense: Look in the Mirror, Oregon By Russell Sadler Feb 13, 2004 The most frustrating thing about the campaign against Measure 30 was its utter dishonesty. Hiding behind focus group-tested slogans like "Don't blackmail us," "Don't hold taxpayers hostage," "End government waste first," and "No new taxes," many Oregon conservatives who are responsible for the present budget crisis denied their responsibility in creating the problem. Opponents of Measure 30, including State Republican Party Chairman Kevin Mannix and the Republican legislative leadership, pose as anti-government protectors of the taxpayer although they have been in control of government fiscal policy for the last decade. The Republican legislative leadership has mortgaged Oregon's future and Oregon taxpayers and their grandchildren will pay an additional $500 million in interest over the next 10 to 30 years. Are you ready for "the rest of the story"? It is a fact that Oregon's General Fund budget has grown faster than inflation. But the loudest opponents of Measure 30 refuse to admit their role in the increase. Two initiatives, sponsored by conservatives and approved by voters with conservative support, account for nearly all of it. Ballot Measure 5, the property tax limitation sponsored by conservative activist-turned-lobbyist Don McIntire and approved by voters in 1990, shifted more than a billion dollars in school costs from locally-raised property taxes to state-raised income taxes without any new revenue to pay for the shift. Ballot Measure 11, the mandatory minimum sentence law sponsored by Kevin Mannix and approved by voters in 1994, triggered the construction of more than $500 million in new prisons and added hundreds of million of dollars of state spending each budget period to operate them. Again, it provided no additional revenue. The Republican-controlled Legislature juggled most of this new spending by borrowing money to pay for stuff lawmakers have traditionally paid for in cash in the past. In the 1990s, the State of Oregon sold about $856 million in "Certificates of Participation," a form of bonded debt that pledges future income tax receipts to pay off the bonds. Two-thirds of the $856 million was spent to buy land and build prisons for Measure 11 felons -- if you build it, they will come. The remaining money was spent on things like a crime lab for the State Police, computer systems for state agencies and an underground parking garage at the State Capitol. Kevin Mannix was part of the legislative leadership during this period. This fiscal house of cards fell apart when the recession struck and income tax revenues plunged in 2001. Lawmakers could no longer juggle the competing and conflicting demands voters created with budget-busting initiatives like Measures 5 and 11. When voters rejected Measure 28, another budget-balancing surtax, in January, 2003, the legislative leadership plugged the hole by borrowing another $450 million to keep Oregon's ship of state afloat. Oregon Republican legislative leadership borrowed about $1.3 billion so it could pretend it did not have outstanding financial obligations. That allowed Republicans to justify nonexistent "budget surpluses" and issue "kicker" income tax refunds. During the time Oregon Republicans controlled the Legislature they have "refunded" $1.3 billion dollars in personal and corporate income tax revenue while borrowing about $1.3 billion to make up the difference at an estimated interest cost of $500 million over the next 10 to 30 years. Ironically, those interest charges might have been avoided if Republicans had been honest about the state's financial liabilities and allowed the state to keep what it collected in taxes to pay for them instead of issuing phony "rebates." There is no new revenue to pay for the interest charges either. Half a billion dollars in interest payments will compete for available income tax revenue with other public priorities for the foreseeable future. It is irresponsible to mortgage Oregon's future like this. But do not take my word for it. Bond rating agencies -- Moody's, Standard & Poor's and Fitch's -- all lowered Oregon's credit rating in the last few months. State Treasurer Randall  Edwards says the bond rating agencies cite Oregon's unbalanced budgets, increased short-term borrowing to pay operating costs, volatile revenue sources and their fears of future initiatives that increase state spending while other initiatives limit revenue that might pay off bondholders. The markets have spoken and their judgment is the people who run Oregon's fiscal policy are no longer responsible enough to justify a higher credit rating. Who is guilty for this Enron-like accounting deception? Mannix and the Republican legislative leadership should be standing in the dock right now. They will be long gone when your grandchildren finish paying the bill for these fiscal follies. But there are at least 620,098 Oregon voters who should also be taking a hard look in their mirrors. Voters who approve initiatives that spend money without providing the necessary revenue are no less culpable that the politicians they elect to office. Copyright 2004 by Russell Sadler       Visit Russell Sadler's articles at West By Northwest.org:         Sadler's Sense: Why We Must Pay the Piper Now Government is treating its fiscal affairs just like the American family treats theirs -- going into debt by pledging tomorrow's income for today's purchases. Sadler's Sense: A Short History of Measure 30 Re-building Political Consensus Is Now a Matter of Survival Editor's note: Columnist Russell Sadler is spending the winter in Eugene writing a short history of Oregon for tourists and newcomers. He can be reached at russell@russellsadler.org © Copyright 2000-2004 by West by Northwest.org