Measure 30 options are discussed

LORI CAIN / Statesman Journal

Jim Barclay (left) and Doug Hovenden, mail operations workers for the state of Oregon, wash and fuel their truck Friday before putting it away for the night at the state Department of Administrative Services motor pool. The motor pool cut gas attendant jobs from their budget, leaving state employees to pump their own gas.

January 24, 2004

West Salem resident Ralph Rollo said he’s sick and tired of “blackmail” from his elected leaders.

Every time they propose a tax increase, he said, it’s the same old story: “If you don’t vote for this, we’re going to cut everything.”

The Measure 30 tax referendum on the Feb. 3 ballot is more of the same, Rollo said.

Lawmakers ordered $545 million in cuts to public schools, health coverage for the poor, state crime labs and other programs if their $1.2 billion tax package gets overturned by voters.

Yet critics argue there are other ways to balance the budget without a tax increase and without wrecking Oregon schools, human services and public safety.

Here are some ideas being discussed as alternatives to Measure 30, or as options to consider if the measure goes down to defeat:

Raiding SAIF Corp. money

Sen. Rick Metsger, D-Welches, heard testimony early in the 2003 legislative session that the state-owned insurance carrier for workplace injuries had a sufficient amount of money in its reserves and required surplus funds. But Wall Street’s surprising rebound in 2003 drove up SAIF’s portfolio $284 million, from $2.58 billion to $2.86 billion. Metsger and others predict that could make SAIF’s funds a ripe target again for lawmakers looking to avoid damaging cuts to schools and health care. State Insurance Commissioner Cory Streisinger said that only an audit could determine what SAIF’s proper reserves and surplus level should be. She cautioned lawmakers to tread carefully there. SAIF customers also could be expected to sue, arguing that excess reserves should get rebated to them.

Selling SAIF

Selling the state-owned insurer could net the state $1 billion, by some estimates. “We don’t think the state should be in the insurance business,” said Russ Walker, Oregon director of Citizens for a Sound Economy, which is leading the drive to pass Measure 30. SAIF supporters counter that a sale would end a competitive business advantage for Oregon employers and jeopardize gains made for injured workers.

School health-care pool

Gov. Ted Kulongoski and labor leaders say that the state could save $90 million or more in each two-year budget by grouping all Oregon school employees in one health insurance pool, as done with state workers. Some Republican senators and business groups oppose the idea. They doubt the savings would materialize and resist taking away business from private health insurers.

More timber cutting

Republicans and many rural Democrats say more intensive logging in Tillamook and Clatsop state forests could create 4,000 jobs and yield state income tax revenues of $12 million per budget cycle. Environmentalists and urban Democrats favor more ecological protections and recreational uses on the land.

State lottery

Bars and restaurant owners want the right to offer video slot machine games to customers. Some estimate that could net the state $50 million to $100 million per budget cycle. Adding a sixth computer terminal at lottery retailers also could raise $6 million per year. Others say that the state should get a greater cut from lottery profits that have enriched many tavern and restaurant owners who host the terminals. Reducing retailers’ cut from 32 percent of the profits to 15 percent would yield up to $150 million per biennium.

Re-pass some taxes

Lawmakers could separately pass the less-controversial elements of Measure 30 that enjoy broader public support. A 10-cents-a-pack cigarette tax, netting $22 million, has been in effect several years but got mixed into Measure 30 because of parliamentary maneuvering. An increase in the state’s $10 corporate minimum tax, which yields $73 million, wouldn’t be opposed by many business leaders. “We’re willing to agree to that if it comes to that,” said Joe Schweinhart, lobbyist for Salem-based Associated Oregon Industries, the state’s most influential business lobby. “Business has pretty much written that off.”

Eliminate more state jobs

Some say that the state can eliminate most of the 3,000 positions now vacant. Oregon Republican Party chief Kevin Mannix estimated that this could save $4 million for each 100 jobs cut. State officials say many of the positions aren’t funded, so there would be no savings. They are kept on the books in case of surging human service demands or other contingencies. Others are critical positions in the process of being filled, or seasonal jobs for forest firefighters and others.

More pension cuts

Walker wants the state to go beyond its 2003 Public Employees Retirement System reforms and drop guaranteed pensions. Instead, Walker said school districts and other governments could switch to a private-sector-style 401(k) plan. “The private sector pays 3.5 to 5 percent of payroll for retirement systems,” Walker said. “Even with the reforms, we spend between 8 and 16 percent.” That potentially could save the state tens of millions of dollars, though it’s likely to be tied up in court for years. Others say that it would make recruitment harder for Oregon government, and deprive workers of a fair pension.

Privatize government services

School districts could invite private caterers to take over lunch programs. The state could sell its motor pools and use private rental car companies. Some say Oregon could let private companies operate prisons. However, there is little agreement on potential cost-savings derived from many privatization ideas, and strong opposition in many quarters.

Steve Law can be reached at (503) 399-6615.