When Governor Kitzhaber argues that we should pursue revenue increases to balance the budget, let’s not forget that Oregon is a very high spending state. According to recently released U.S. Census data, Oregon state and local governments spend more per capita than all but seven other states. This stark fact bolsters the argument that the budget should be balanced by cutting spending, not by raising taxes.
Fourteen months ago, long before the current recession, Cascade Policy Institute published a report showing Oregonians exactly where their governments are overspending, and we suggested market-based reforms to cut spending without harming services. The report found that, adjusting for demographic factors such as age composition, income levels, economic growth, education levels and poverty rates, Oregon state and local governments spend on the order of 19 percent more than comparable states.
Specifically, Oregon education spending is 14 percent more than comparable states, health care 30 percent more, welfare 13 percent more, corrections and police 19 percent more. In fact, of five major categories, Oregon only underspends in one-highways by 3 percent.
Now that tax revenue is down due to the recession, and the budget is some $850 million out of balance, it’s time to seriously consider the reforms Cascade called for over a year ago in Dr. Randall J. Pozdena’s report, Can Oregon Tighten its Fiscal Belt?
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