15 Oct

Without new revenue, Oregon’s schools and situation will never get any better

ASHLAND – To anyone looking at the growing Oregon economy and figuring we’re just about to reinvest in schools, higher education and early childhood, Peter Buckley has a deflating message:

“This is as good as it gets.”

And there’s no guarantee it stays this good.

Have a nice day – and don’t expect too much from the school year.

As co-chair of the Joint Ways and Means Committee since 2009, the Ashland Democrat has overseen the last four state budgets, so he’s assembled spending plans much more painful than the one in effect now. But without additional revenue, he doesn’t expect the state’s financial outlook to get any better – which is a small part of the reason he’s decided four budgets are enough, and isn’t running again.

If the state comes up with some additional money, he figures, the budget will be manageable. If it doesn’t, well, he’s assembled a cuts budget before, and wouldn’t look forward to doing it again.

In the 2017 session, the legislature will face considerable new costs from the expansion of the Oregon Health Plan and the Supreme Court’s rejection of most of the PERS reform plan. At the same time, Oregon’s close to the limit of its revenue stream.

“There are no more major shifts to make in the state budget,” explains Buckley. “The economy is performing as well as it has in decades,” meaning there are no likely revenue surges from faster growth.

Following the sharp revenue changes from the passage of Measure 5, “We never solved the problem. We got through, but we never solved it.”

Buckley explained the state’s fiscal realities at the end of last month to a gathering of United for Kids, a coalition of children’s advocacy groups eagerly looking for the next advances in state funding. He explained it further last week in Ashland, during the kind of Southern Oregon autumn afternoon that can make you wonder why anybody would leave it for a Salem committee room, even if the numbers were a lot more encouraging.

Right now, he noted, “There are just so many people stressed to have a decent life,” and the state is just about at the limit of its capacity to do anything about it.

The hope for additional revenue is an issue likely to appear on next November’s ballot, which could feature a burst of measures from all sides, some previously blocked by former Gov. John Kitzhaber’s negotiations with business and labor groups. Buckley expressed interest in a measure to increase corporate taxes proposed by the group A Better Oregon, which this month is beginning to collect signatures. The measure would seek to reverse the steady decline in the proportion of state government costs paid by Oregon businesses, which by some calculations carry the lowest state tax burden in the country.

Many Oregon Democrats, including those who would welcome the money, have been hesitant about such an effort ever since the traumatic 2010 votes on Measures 66 and 67. Their passage saw the state budget through the Great Recession but tore open a painful rift with the business community.

The memory doesn’t scare off Buckley.

“Measures 66 and 67 were absolutely essential,“ he says. “If we hadn’t passed them, I can’t imagine what our system would look like now.”

To some surprise, both Measures 66 and 67 passed relatively comfortably, in a more conservative (and non-presidential) year than 2016 seems likely to be. And, Buckley notes, the predicted massive flight of companies and upper income taxpayers out of the state never happened. Some time later, The Wall Street Journal reported breathlessly that Oregon had many fewer high-income taxpayers, but the cause seemed to be less exodus than what the financial collapse did to incomes.

In Buckley’s view, a significant change in the state’s post-Measure 5 revenue structure could change funding possibilities across the board.

“It’s a game-changer for K-12, for early child care, for mental health, for higher education,” Buckley says after eight years’ immersion in the looming shadows of the state’s budget numbers. “We could imagine a generation of Oregonians graduating from college without debt.”

So is there a possibility of the state’s voters actually bagging what has been, ever since 1990, the great white whale of Oregon public policy: replacement revenue for the Measure 5 cuts?

“I think,” says Buckley, “people get to a point when they say, enough.”

As a title for a romantic comedy, “As Good As It Gets” is fine.

It’s less encouraging as the highest hopes of a state.

NOTE: This column appeared in The Sunday Oregonian, 10/11/15.

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