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Bennett's Blog: 'Helpful' budget advice from Salem Print E-mail

chuck-bennett.jpgby Chuck Bennett, Director of Government Relations

Budget advice is always helpful.

Get up about 3 a.m. and turn on the TV and you’ll get all kinds of it. Buy this, invest in that, don’t miss this opportunity – the airwaves are full of it.

Add to the list of advisors, Gov. Ted Kulongoski. The Governor, armed with the ultimate crystal ball – state revenue forecasts – is advising districts to approach this year’s budget process with a real eye on the next biennium’s likely shortfalls.  Probably good advice as far as it goes.

Right behind the Governor’s suggestion that districts hold back money come letters from legislators with a different take on spending – put simply it’s, “spend.” You can boil it down to simply – “We didn’t give you the money from state taxes to have you put it in the bank.” Unsaid is that many districts are in bargaining and there are strong constituencies that want everything on the table.

As you might guess these clashing messages pretty much leave the field open to interpretation – yours. But then that’s the way it was before these two branches of government began circulating their points of view and proffering budget advice to 200-plus districts and ESDs that begin serious budget writing in the next few weeks. The good news for school kids in Oregon is that decisions regarding local budget priorities, including reserves, remain at the local level.

What is worrisome is to recall just a couple of years ago when legislators prowling for cash came across the line item in local school budgets that showed some districts were actually maintaining cash reserves (an uncommon concept in Salem where “rainy day fund” commonly refers to the amount of cash it takes to buy an umbrella during a cloud burst). It was during those discussions that some wag, elected or otherwise, proposed that school districts were sitting on a boat load of cash that could be tapped by declaring the reserves “local revenue” under the formula. Like any bad idea that gets legs in Salem, this one just sits at the starting blocks waiting for the starter’s shot. This one is probably the most worrisome idea we’ve seen over the past several years because it has all the allure of one of those TV ads I mentioned at the top of this column. You know the ones – “I’m a millionaire and I did it with no money down.”  You can almost hear the balloon bursting.

Bottom line? Glad you asked – and even if you didn’t let me share. And by the way, I know this is gratuitous but then so is the advice you’re getting from everyone else. Ignore messages from Salem that don’t include a check attached. Fortunately, we continue to have a local government budgetary policy that places the real responsibility for decisions firmly in the hands of locally elected and appointed officials.

Oregon’s business taxes are lowest in the nation
On another front, there has been substantial discussion after the January 26 vote on Measures 66 and 67 and the impact those measures will have on local economic development throughout Oregon. There aren’t many chambers of commerce where school officials won’t hear a litany of doom and gloom scenarios arising from the successful vote to keep schools open, classroom sizes manageable and teachers and other school employees at work.

Jeff Mapes reported in this morning’s Oregonian that a report from the Council on State Taxation, a national business group, shows Oregon is tied with two other states in having the lowest total business taxes as a percentage of gross state product in the U.S. The main reason for Oregon’s low tax status is the lack of a sales tax.

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This page was last updated on Wednesday, April 07, 2010 .