Thursday, August 10, 2006

Whew--TABOR Won't Cut $7.4bil, just $2.2bil!

This story has been published for over 24 hours now, and I haven't seen any Oregon blogs cover it yet. OK, maybe they're like me and they hadn't gotten the time until quarter to one in the morning, but not everybody has a job and a family--surely others saw the story, right? Even our friends at Our Oregon and OR Center for Public Policy were silent on the article, which to me read not only like a bit of a bombshell, but also a hidden bombshell inside that.

The headline topping The Oregonian's Metro fold yesterday was "Spending Limit Start in Question," which is a rather innocuous way to begin a story in which the various answers to the question concern billions of state dollars. The main thrust is that the required financial impact analysis for Measure 48 has revealed what can only be called a flaw: Don McIntire's oh-so-carefully-crafted, don't-you-dare-call-it-TABOR petition doesn't happen to mention when it takes effect, and in such cases the default is that it starts 30 days from passage--early December, in other words.

That does indeed raise a question for when legislators would have to calculate the spending limit between one budget and the next: which two budgets? According to McIntire scheisster Eric Winters (and obliquely, state Asst. AG Cynthia Byrnes), it's meant to apply from the current budget to the next budget, which will be written sometime in 2007. But if it takes effect in December, we're still IN this budget, and then the calculations will need to be from the LAST budget to this one.

Confused? Let me spell it out: under one rationale called "a realistic legal interpretation" by the AG's office, Oregon would have to retroactively yank $2.5 billion from a budget cycle with just a couple months left in its life. On top of that, the projection is that $4.9 billion of what the Legislature expects to spend in the next budget can't be spent, either. Wow, so if we pass TABOR this fall, it's entirely conceivable that we'll have to take back money we've already spent, and fall short by double that amount next year. I bet you're not confused anymore! And this got no blogreaction? Isn't an opening-round forfeiture of over 7 big ones--including two and a half we've already spent--a fairly potent argument against ratifying this utter stupidity of a spending bill?

So that's the bombshell. But all right, let's cede to Winters' wisdom and suppose that his interpretation is correct. If we consider the 2005-07 budget done with and apply the law beginning with next year's budget, everything will be fine, right? We'll have plenty of money to spend on necessities and all those things we've been putting off since the recession began (trivial stuff like infrastructure and public safety and education), because we'll get 8% more to spend, right? Not so much; even with the later time frame, analysts still project $2.2 billion that could not be appropriated.

This is the first time I've seen anyone specifically estimate what implementing OR-TABOR will do. OCPP has put out some great material showing what would have happened if we'd had the law since 1990, and since the last recession in 2001, but as far as I know they hadn't determined what would happen just in the next budget. Now there's a number, and it's two billion dollars of revenue that the government will receive that can't be spent.

I could be utterly, completely wrong, and the mood of Oregonians is that we have no pressing need for any more revenue, because the state's in fine shape already and that money is better off sitting in a lockbox awaiting its fate. This is not money gained by raising taxes, mind you; it's just the increased production of Oregonians that would lead to increased tax receipts. Crazy us, we used to say "Hallelujah! Times are good! Let's invest our good fortune and make ourselves stronger!" But Don McIntire wants us to say, "Ack, too much money! Let's put some away...somewhere, and then maybe when things are dire in the budget (not like now, of course) we'll spend it then...if we can get 2/3 of the Legislature to sign off on it."

McIntire, his attorney, and his puppetmaster Grover Norquist know that the money details of their plan will end up spelled out in the Voter's Guide, and that if it says $7.4 billion in actual and theoretical cuts, the chances of it passing go way down. That's got them plenty freaked out, and that should be setting off light bulbs among opponents of the bill: McIntire doesn't want people to know what it costs, because he fears what they will do if they find out.

So go forth, defenders of Oregon budget sanity, and make it known to those who think TABOR sounds like a good idea: are you ready to lose two billion in budget dollars next cycle just because our economy is finally doing better? And that's the best-case scenario--what if we lost double that, AND had to pay back over two billion more that we've already spent? Because that's what TABOR will do for (to) Oregon.