Time to Reset Oregon’s Budget and Recharge Our Economy: Facing Reality 2013

April 16, 2013 0

The Oregon legislature is struggling to balance the state budget while meeting the perceived need to adequately fund education, health care, public safety, and other services. In 2010, Cascade and Americans for Prosperity – Oregon published our first Facing Reality report, offering state legislators an opportunity to “reset” state government using the time-tested principles of limited government and pro-growth economic policies. While this opportunity was mostly ignored in the 2011 legislative session, we decided to update several key proposals from that report, add one more, and present them to the 2013 legislature.

We have just released our new report, Facing Reality 2013. Together, its proposals can save over one billion dollars in the state budget, and add 50,000 jobs over the next five years without any cost to taxpayers. These savings and economic benefits more than counter any claims that we need to raise taxes on hardworking Oregonians and businesses.

Here, in brief, are these proposals and their potential benefits:

FACING REALITY 2013 Components

Benefit Summary

Privatize liquor distribution and sales

$8 million biennial revenue

Reduce corrections costs

$68 million biennial savings

Eliminate the PERS pick-up

$772 million biennial savings

Align state employee compensation with private sector compensation

$160 million biennial savings

Enact Right-to-Work legislation

50,000 more people working in five years; 110,000 more working in ten years.

 

$2.7 billion more in wage and salary income in five years; $7.0 billion more in ten years.

 

14 percent more taxpaying families per year moving into Oregon from non-right-to-work states.

 

Our Right to Work proposal stems from Cascade’s 2012 report, Right to Work Is Right for Oregon, which broke new ground by covering 70 years of data and every state, and relying on what we believe to be the largest datasets ever used to study the impacts of right-to-work laws. Coincidentally, an initiative petition may be circulated soon to grant such freedom to all Oregon public employees. If that happens, Cascade will be in the forefront of making the economic and moral case for its approval.

Decades of well-meaning politicians, bureaucrats, and special interests have grown state government spending without regard for long-term consequences, producing an unsustainable budgetary premise that threatens Oregon’s financial stability. Long-term debt, unfunded liabilities, inefficient programs, unnecessary spending, and bloated bureaucracies all contribute to this bleak future. Along with higher tax rates, fee increases, and unfunded mandates that make it harder for businesses to produce a profit, we face the perfect storm that manifests itself in Oregon’s budget and economy today. Without a drastic change in direction, it will only get worse.

Unfortunately, the demonization of corporations and small businesses during the debate over tax-increase Measures 66 and 67 which passed in 2010, along with proposed regulations and higher state fees, has reinforced the impression that Oregon is not business-friendly. This must be addressed immediately if long-term investments in expanded business capacity are to occur.

The proposals in Facing Reality 2013 represent significant changes in the way Oregon government operates. More will need to be done, but these are a good start. We encourage all Oregonians to study them and ask their state legislators to do the same. It is not too late to refocus Oregon government on its core functions, reduce its costs, and remove it from areas in which it has no business, such as the distribution of liquor.

While we recognize the enormity of the politics that surround these concepts, we believe they are essential if we are to “recharge” our economy and ensure Oregon’s long-term future. Without them, Oregon’s future looks dim. With them, the future is as bright as we want it to be. 

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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