Why Kulongoski’s New Taxes are a Bad Idea
Economist Mark Skousen once declared
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure.
Apparently, Governor Kulongoski agrees with Skousen. Currently the budget for the state of Oregon $48 billion— that’s $6,376 per year for every man, woman and child in Oregon. Taxes today are nearly twice as high as they were 25 years ago (yes, this number is adjusted for inflation). Consider the chart below:
| Oregon All Funds Budget per Biennium and per Person per Year 1985-2009 | ||||
| Biennium | All Funds Budget per biennium | Population | Actual dollars per person per year | Dollars per person per year if budgets grew only at rate of inflation |
| 1985-87 | $12,060,094,718 | 2,690,000 | $2,242 | |
| 1987-89 | $12,570,014,958 | 2,791,000 | $2,252 | $2,400 |
| 1989-91 | $15,174,994,031 | 2,927,800 | $2,592 | $2,600 |
| 1991-93 | $17,866,757,268 | 3,059,110 | $2,921 | $2,750 |
| 1993-95 | $20,042,060,862 | 3,182,690 | $3,149 | $2,900 |
| 1995-97 | $23,218,655,377 | 3,302,140 | $3,516 | $3,050 |
| 1997-99 | $27,308,692,023 | 3,393,410 | $4,024 | $3,150 |
| 1999-01 | $30,462,319,439 | 3,471,700 | $4,387 | $3,250 |
| 2001-03 | $35,508,990,712 | 3,541,500 | $5,013 | $3,400 |
| 2003-05 | $38,743,009,114 | 3,631,440 | $5,334 | $3,550 |
| 2005-07 | $43,220,555,200 | 3,690,505 | $5,856 | $3,700 |
| 2007-09 | $48,005,409,654 | 3,764,684* | $6,376 | $3,850 |
| All Funds Budget includes General Fund, Lottery, Federal, Other (fees) Budget numbers from Legislative Fiscal Office as provided to Rep. Kevin Cameron Population data from Population Research Center, College of Urban and Public Affairs, Portland State University *2007-2009 population projected at 1% annual growth Revised from handout produced by Rep. Kevin Cameron, 2007 (rep.kevincameron@state.or.us)Final column calculated and rounded by Steve Buckstein, based on GDP Price Deflator, St. Louis Fed. |
||||
As we have reported earlier, currently Governor Kulongoski is asking for $2 billion in additional taxes and fee hikes. What is Kulongoski going to do with this money? You guessed it, he is, in fact, adding some 1,500 new positions to Oregon Government. In addition, services like veterans affairs are being decreased by some 16% and the state’s bureaucratic agencies are being increased (Department of Human Services +18%, Administrative Services +23%).
Why is Kulongoski doing this? According to the Register Guard
Government labor unions unquestionably have a lot of muscle in the current political environment. Labor unions are big donors to the campaigns of Kulongoski and top Democratic legislators in the Oregon House and Senate, where the state budget will be worked on.
Kulongoski is increasing his largest voting block (public employees), and decreasing services like senior services, veteran affairs, mental health, and public safety and standards.
How is Oregon’s economy currently? We are suffering from unemployment rates over 8%:
Oregon’s unemployment rate climbed to 8.1 percent in November, leading to a rise of nearly 50 percent over the last six months.
According to the economic think tank Cascade Policy Institute:
Looking forward for the next biennium, the Legislature will be faced with the age-old challenge of satisfying unlimited demands with limited resources. Smart Spending, rather than new taxes, will be one step on the path out of our current crisis.
There is no economic rationale for Governor Kulongoski to increase taxes. That is, no rationale–except that of expanding government.
The $2 billion increase is a bad idea. Send the Governor an email and let him know you think that.
