Reckless Abandon

by Oregon State Senator Dennis Linthicum, District 28
7/19/17

Hello Friends,

A well-balanced, realistic policy-making approach could pave the way toward long term fiscal solvency and achieve investment goals for Oregon’s future. As I entered my first legislative session, I anticipated Democrats and Republicans would work together to achieve those goals by supporting both spending and revenue reforms. It only makes sense that balancing both sides of the ledger would increase stability for our state’s budget.

It seems, I was wrong.

In early July, we adjourned the 2017 legislative session without any meaningful action to address Oregon’s runaway spending. Nor did we put the state on the path to a stable financial future. In the Senate, my Republican colleagues and I consistently advocated for a balanced, three-phased approach: 1) cost-containment, 2) PERS reform and 3) revenue restructuring, if needed.

However, there was never any interest in our conservative, common sense solutions for slowing, diminishing or containing the costs of our runaway government. The Democratic majority had no interest in our cost reduction ideas. Apparently, their typical method for solving problems is accomplished by raiding our wallets , but this won't last forever. I might be naive, but I thought everyone knew that even millionaires can run out of money.    According to the National Endowment for Financial Education, nearly 70 percent of all people who win a big lottery prize end up completely broke within a couple of years. Steve Lewit, CEO of Wealth Financial Group in Chicago, has analyzed the statistics and says, “People who were little, ordinary people all of a sudden become extraordinary, they're euphoric. They lose all sense of reality. They think they're invincible and powerful. They think they're Superman.”

Several finance advisers agree, the biggest problem, is that lottery winners give away too much money to family and friends. Lewit continues, "Once family and friends learn of the windfall, they have expectations of what they should be entitled to, and many of these expectations are not rational, it can be very difficult to say no."

Fortune Magazine reports,

“Everyone—parents, siblings, friends, neighbors, coworkers, charities, and strangers—will want some of your money. Many will ask for it and some will demand it, arguing that they need it more than you. The guilt trips and manipulation start quickly. Expect also to get plenty of investment pitches: Open a restaurant! Buy a hotel on Main Street… the list goes on…. Requests and demands for money is the start of your path to ruin.”

Oregon is in the same boat. Our state is swimming in revenue, and our Governor believes she is invincible.  The Democrats in the legislature are the modern-day equivalent of Mister Super-Lotto Winner. First, they don’t know how to say ‘No.’ Second, they can’t separate truth from fiction so they are always ripe for the picking.

Certainly, there are wise funding choices to be made in education, human services, public safety, transportation, et. al., but, the "friends and neighbors" who knock on the doors of the legislature come from every nook and cranny in Oregon. Steven Malanga identifies the modern tendencies of progressives in his book, Shakedown: The Continuing Conspiracy Against the American Taxpayer. He documents that many requests come from self-interested coalitions of public-sector unions and government-financed community activists (like the young Barack Obama.) This is the new political power; the legislature is just the machinery.

Mr. Malanga shows how the single-minded goal is always bigger government and more public spending. The bill for this extravagant spending is now coming due because of the relentless rise of this new political powerhouse. Malanga chronicles how public-sector unions and the corrupt political hacks beholden to them have all but bankrupted once-rich states like California and New Jersey.

Is Oregon next? Will our state use wisdom and prudence, or, will we end up like most lotto winners – spending money with reckless abandon on our way to the poor house?

Currently, our state’s revenue exceeds all expectations. Oregon gathered billions more into the state’s coffers than ever expected. Personal income tax revenue is up, corporate revenue is up, property tax contributions are up, even marijuana sales tax cash flows are now pumping into the revenue stream.

The Legislative Fiscal Office released these budget numbers last week:

Not only does this represent a 3.7% increase in total funds from the 2015-17 budget but it represents nearly $18,500 per person in services. If your household has four family members they should each be receiving just under $10,000 in annual services.

Let’s figure you have kids in school. Some would argue the $10,000 was justifiable. Yet, we also know that Oregon’s education tab per student, per year, approaches $13,400.  Yet, only 21.2% of the population is 18 years-of-age or younger.

That leaves a bunch of bootie for annual services that most of us never see. Where does that money go? Also note, these numbers represent a 10.3% increase in General Fund/Lottery Funds from the 2015-17 biennium.

Oregon needs to learn to live within its means and taxpayers deserve a break. All it takes is a clear strategy for maintaining economic growth over the next decade. 

This strategy would include allowing businesses to thrive and prosper rather than seeing businesses as a never-ending source of booty. Sustained economic growth dynamically contributes to increased opportunities along with good-paying jobs that contribute mightily to the public coffers. So then, let’s allow people to thrive, allow their businesses to grow and give them the liberty they so desperately desire.

Today’s existing taxation and revenue structures bring in tremendous resources and there is no need for any gross receipts/sales tax, which occurs nightly in the dreams of Oregon’s progressives.

Every small business owner I know is already working long hours, with little pay, hoping their business can succeed. I hear from many hardworking families who in desperation ask me how to stop the relentless assault on their earnings.  They have hopes and dreams for their businesses and they are sincerely afraid that more taxes, fees and regulations will be their undoing.

Across the nation, we face a seeming ideological civil-war regarding self-governance. 

Should government provide everything? Can it? At what cost? How many other states, county and municipal governments have promised more than they can provide? Will Oregon follow Illinois’ perilous journey?

I say, “Enough is enough!” 
 

Regular people must balance their checkbooks, live within their means and save to plan for their futures. Oregon’s citizens must continue to demand the same diligence from our State Government.

Our nation’s Founders struggled to avoid this problem on the national front, yet, we face the same turmoil today at the federal, state and local levels.  As the witty economist, Thomas Sowell, penned not too long ago, “There is nothing that politicians like better than handing out benefits to be paid for by someone else."

Remember, if we don't stand for rural Oregon values and common sense...
No one will!

Best Regards,

Dennis Linthicum
Oregon State Senate 28

Capitol Phone: 503-986-1728
Capitol Address: 900 Court St. NE, S-305, Salem, Oregon 97301
Email: sen.DennisLinthicum@oregonlegislature.gov
Website: http://www.oregonlegislature.gov/linthicum

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