Thursday, November 20, 2008

Here we go again

Every time the economy is in trouble, what is the headline news? What gets splashed across the front pages and discussed in hand-wringing lead editorials?

The budgets of GOVERNMENT.

All we hear about is what can we do to make sure government doesn't have to feel the impact. And of course we are treated to an endless parade of human-interest stories about how people can possibly get by without this or that government program. It has only just begun.

So perhaps it would be wise to actually put things in perspective. The state revenue reforecast came out yesterday, and the estimate is that the state tax revenue will .....

Increase by $857 million.

Say what? Yup. It's true. That new estimate you hear all that caterwauling about is because state revenues will only go up by almost a billion. You see, in the prior forecast they thought they would have $2 billion more than last biennium, so the government class is crestfallen that some of their big spending plans might be at risk.

It's like if you thought you were getting a big raise next year, then your boss told you it would be smaller than you expected. 

Clearly, this is untenable. Unless the state government has 20% increases each biennium, we are in crisis. Just ask them.




8 comments:

Anonymous said...

How fortunate that Teddy was able to get those state employee raises appropriated before the latest forecast. Would that be considered a coincidence, or not?

Anonymous said...

What's amazing is that Oregon voters keep electing the same bunch of spendthrifts and expecting a different result. Now, they've given them a super-majority. Normally, I think the voters generally make good decisions, but on this one, it's pretty tough not to question their sanity.

OregonGuy said...

What came first, the chicken? or the egg?

I don't know when the Oregon economy is going to be recognized as being in free-fall. 7.2 percent unemployment should be a pretty good indicator that the wheels are coming off. That's 72 men looking for work out of every thousand. Will we have a problem when more than 100 men of a thousand are looking for work? 200?

What are the essential, fundamental requirements for a sound economy? And why is it that we aren't having a discussion of returning to the fundamentals in Oregon?
.

Anonymous said...

That new estimate you hear all that caterwauling about is because state revenues will only go up by almost a billion. You see, in the prior forecast they thought they would have $2 billion more than last biennium, so the government class is crestfallen that some of their big spending plans might be at risk.
---

Yes, but they do "NEED" all that extra money, since they have a budget that has already 'spent' that extra money, even though it was only a 'projection'. Next year, state employees will still get their multi-year wage increases, regardless of if the state gets any revenues.

That was why I voted against big spending Union wage increases when I was on my local school board, since it not only increased spending during the good times, but also "locked in" wage increases for years into the future.

As long as those teachers can still fog a mirror as they grow another year older, then they will get their 3.5% COLA, their 4-5% step, and if they finish their online MA, then they get more money for that also. And their benefits, remember, are guaranteed to increase, since PERS has a guarantee, even if the markets go down, the taxpayers are liable for the PERS.

My 401K, split between US and International stocks, is down about 50% in a year (just like the S&P). Nobody is going to cover my 401K losses, but us taxpayers will cover the PERS liabilities. And the taxpayers will also cover the teachers unions, when they have to cut the younger teachers next year, to balance the budget, so that the older teachers can continue to fog their mirrors. Remember, if we don't, then Doonesbury will shame us into another additional temporary tax.

Anonymous said...

Defined benefit pensions are killing everything from states, to cities to autmobile companies.

Anonymous said...

Speaking of automobile companies...

From the carnival of cars blog:
"Jim Lindgren at the Volokh Conspiracy offers a critique of bailout proposals, including this observation: "If a business is failing, union auto wages should be priced well BELOW what nonunion auto workers make, not well ABOVE what nonunion workers make. So until the unions have given back everything above the market value of their labor, they haven't given back nearly enough. I don't know enough about what goes into the $72 compensation rate, but perhaps the parties should consider having all current employees, both management and union workers, take a 50% pay cut."

Anonymous said...

Time and time again the State, local governments and school boards have adopted new programs and increased salaries and benefits when they knew they would not have the money to pay for them.

As for the salary and benefit increases without adequate funding, some still call this process "good faith negotiations".

Balderdash. When public officials grant these increases when budget shortfalls are realiized it's "good faith" anything.

When elected officials expand government when current functions are neither funded or functioning as they should the resulting chaos is entirely preditcable.

What were they thinking would happen?

Anonymous said...

When public officials grant these increases when budget shortfalls are realiized it's NOT "good faith" anything.