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Does Oregon Deserve a D in Money Management?

Steve BucksteinQuickPoint!

A new national report card funded by the Pew Charitable Trusts finds that Oregon state government doesn’t manage its money very well. Only Oregon and California earned D’s. Oregon may well deserve its D, but not for the reasons this report gives.

The authors of Grading the States 2005 apparently value bigger government, because they marked down for factors that reduce state funding. Oregon’s kicker law, which refunds excess taxes to taxpayers, and our initiative and referendum process, which allows voters to override legislative tax increases, were both seen as negatives.

The report also calls Oregon’s tax system “dysfunctional” because it relies heavily on income taxes. The authors’ implication is that we should also have a sales tax, but this “fix” has been nixed nine times by voters using the very initiative system the authors fault.

Oregon may deserve a poor grade in money management, but that is because it wastes money on excess school support services, for example, and funds non-core functions such as the Oregon Cultural Trust while denying funding to core services such as the state police.

Grading the States would be more useful if it recognized the value of mechanisms that hold down wasteful and inappropriate state spending.

Steve Buckstein is senior policy analyst at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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