Gov. Kate Brown’s new proposed budget and policy agenda has some nice ideas — and some that are completely wrongheaded.
Brown aims to spend $2 billion more to improve education, help families with child care, add more affordable housing, add more state troopers, add more auditors and add more.
Those new goodies sound great. But we need to know the math. Where does the money come from?
Running government like a business would mean when you outline a bunch of great things to buy or invest in, you need to show where the money comes from. Anything else is monkey business. Even running a home budget, we’re sure Oregonians can draw up their own wish lists real quick. There’s got to be a responsible plan to pay.
Oregon faces a $623 million budget gap for the next two years, even with a projected increase in revenues.
Brown points out in her budget document that the state has another hole to fill. It needs at least $1 billion to help schools stabilize their state pension payments or any new dollars spent on education will not make it to the classroom.
Oregonians should be told upfront how they are going to pay. There are only a few clear proposals to raise revenue in her budget plan. They don’t add up to anywhere near the billions in new costs.
Among the few revenue proposals mentioned directly in her plan is a $2 tax increase on a pack of cigarettes. Oregon has about 1.5 million households.
If every Oregon household bought more than 300 packs of cigarettes a year, the state could fund the $2 billion biannual increase in education. We can’t imagine Brown’s plan is: Smokers for schools!
She is upfront about another tax. But this one is pretty awful and only projected to bring in $120 million. Brown is proposing to tax employers whose employees are on the Oregon Health Plan. The details are not clear.
The concept is similar to the Stop Bad Employers by Zeroing Out Subsidies Act (That spells out Stop BEZOS, the Amazon CEO) on the federal level.
The idea is seductive: Tax companies who don’t pay their workers enough or don’t provide enough benefits so their employees end up having their health care subsidized by the state and federal government on the Oregon Health Plan.
Sen. Bernie Sanders of Vermont denounces that sort of thing as “corporate welfare.”
“In the third quarter of 2017, there were approximately 44,000 Oregonians working more than 30 hours a week at firms with 50 or more employees who were enrolled in OHP, shifting costs to state and federal taxpayers,” Brown’s plan says.
This solution doesn’t fix the problem. It could even be hard on the poor. It creates a strong incentive for employers to avoid hiring employees that might be on OHP. Those employees would end up costing employers more.
People who look poor might face discrimination. People who have larger families might face discrimination. Of course, the state would take steps to try to stop any sort of discrimination like that. But the state should not create incentives that will discourage hiring the poor.
Another problem with this tax is that eligibility for OHP is determined because of household income, not just because of one employer. How would the state calculate when a single employer is responsible?
A third clear revenue proposal in Brown’s plan is to reinstate a tax on insurance premiums. Voters rejected Measure 101 in January, which would have blocked those taxes, so it’s reasonable to think Oregonians might think they are OK.
Don’t forget, though, that those taxes on premiums weren’t structured fairly. Individuals who bought health care through the exchange had to pay. College students who bought their insurance through their schools had to pay. Small businesses had to pay. Oregon’s K-12 schools had to pay. But who didn’t? Big employers, such as Nike and Intel, that are large enough to self-insure. How is that a fair tax?
The next legislative session will be a special time for Brown. Because of decisive Democratic majorities, she can pass new taxes without needing a single Republican vote. She does, though, need the support from Oregonians or they can block new taxes at the ballot box. Building support starts with being forthcoming about what she wants in new taxes, not just new goodies.