An actual, practical kicker compromise
Well at least he used the word "compromise."
In his new column Dave takes on Oregon's "kicker"- the state constitutional amendment that redistributes unpredicted revenue to corporations & individuals that generated the revenue- and tries to find a solution that appeases both kicker opponents and pro-kicker supporters.
Before we analyze Dave's column further, I'd like to explain the kicker for those readers who may be unfamiliar. Imagine this following scenario: a family of four wants to plan on taking a vacation in two years. After looking at their budget, they come to the conclusion that the funds they'd have saved will only allow them to spend a weekend in Astoria. However, two years go by and in the meantime, Dad gets a promotion, Mom gets a better-paying job, Little Billy gets a paper route, and teen-ager Suzie becomes assistant manager at McDonald's. If their increased money were to be pooled together, they'd be able to take a week-long vacation to Disneyland, plus get the braces needed for Billy and pay Suzie's community-college tuition. But as the decision was made two years ago to go to Astoria, Dad sticks to his guns, with funds to be distributed piece-meal between family members to purchase souvenoirs, the children's needs be damned.
Replace Astoria with "predicted revenue," the family with "state's economist", and Dad with the "kicker amendment" and you have a close approximation of what this stupid law does to Oregon's finances. I don't have a good analogy for the corporate interests that will receive $200 million from the state's kicker, but in the end Oregonians will receive a check for $150. While that is great, it is impossible to purchase pothole-free roads or healthy schools for $150. Similar to Billy and Suzie, needs will be ignored that could be fixed by pooling or earmarking unexpected revenue instead of being "kicked back" piece-meal to individuals.
In the end, the kicker is nonsense. It is the only kind of law in the country, which has been on Oregon's books since 1979, and provides a selfish "me-first" sentiment rather than a coomon-sense "rainy day fund" for unexpected revenues that every other state has. In his column, Dave sates that Oregon is a "state prone to boom-and bust revenue cycles." There couldn't be a more simpler explanantion as to why the kicker should be repealed. It prevents Oregon from conserving funds to prepare for the future, allowing the state to be extremely susceptible to economic setbacks, as the disastrous 2001 recesion proved.
But Dave, a fan of the kicker as that means an extra dinner for two at McCormick & Schmick's this year, wants to talk "compromise." His idea? Allow the Legislature to have access to the $200 million being kicked back to corporations (two-thirds of which will leave the state) in return for slashing the state's capital gains tax and distributing the corporate kicker into a general rainy day fund. When you think about Dave's proposal for more than two seconds, you realize, as a compromise, it doesn't make sense.
First, capital gains taxes have no connection with the unexpected revenues being distributed through the kicker. None. Its just been on Dave's mind this week, so he connects the two together in his 'compromise.' As I've all ready pointed out, capital gains tax cuts benefit the investor class, with the occasional household earning less than $100,000 making an average of $14 through these cuts. It's a hand-out to those who don't need one, and the tax cut alone won't cover all the revenue lost. And any revenue generated would pale in comparison to the amount needed to fund the gaps currently plaguing the state, which raises the concern of insisting that the corporate tax kicker be deposited into a rainy day fund. Why insist that the money should be saved for the future while ignoring the problems of the present? A rainy day fund makes sense, but we need to make sure school districts are healthy and there are no glaring holes in local government's budgets.
'You just want to increase government spending!' the pro-kicker critics will respond. That is not what I want. Government spending should not sprawl, un-checked. At the same time, if our state and local governments can't provide essential needs and services, then what's the point of continuing to slash budgets? For example, consider the decreasing number of state troopers in Oregon as the methamphetamine crisis escalates. To aruge that more money, if its available, shouldn't be made available for State troopers is patently ridiculous.
So Dave's 'compromise' has been exposed for what it is: a sop to the wealthy investing class while tying ordinary Oregonians' hands from being able to fix funding problems that plague them on an everyday basis. Here's an actual practical compromise that could be applied to the kicker:
Keep the kicker in the constitution. As much as I hate it, I must admit I enjoy the occasional check in the mail. I'm a few DVDs short in my Cuba Gooding Jr. collection. However, amend the kicker law and make it so that if there are any funding shortages for key government budgets- such as school districts and the Department for Human and Health Services- those shortages should be filled from the unexpected revenue before anything is kicked back. Also, increase the amount that revenues need to exceed projected amounts to three percent. And earmark five-percent of returns to a rainy day fund. With this compromise, the infrastructure used by both individuals and corporations to generate such returns will be kept healthy, and ensure the generation of future revenue. Plus, everyone would get a check back, though it may be for $135 instead of $150. But money coming in the mail is always a good thing, regardless of the amount. Especially if its unexpected.
I mean, Dave could still have dinner for two at McCormick's for $135. He just may not be able to order the special.
In his new column Dave takes on Oregon's "kicker"- the state constitutional amendment that redistributes unpredicted revenue to corporations & individuals that generated the revenue- and tries to find a solution that appeases both kicker opponents and pro-kicker supporters.
Before we analyze Dave's column further, I'd like to explain the kicker for those readers who may be unfamiliar. Imagine this following scenario: a family of four wants to plan on taking a vacation in two years. After looking at their budget, they come to the conclusion that the funds they'd have saved will only allow them to spend a weekend in Astoria. However, two years go by and in the meantime, Dad gets a promotion, Mom gets a better-paying job, Little Billy gets a paper route, and teen-ager Suzie becomes assistant manager at McDonald's. If their increased money were to be pooled together, they'd be able to take a week-long vacation to Disneyland, plus get the braces needed for Billy and pay Suzie's community-college tuition. But as the decision was made two years ago to go to Astoria, Dad sticks to his guns, with funds to be distributed piece-meal between family members to purchase souvenoirs, the children's needs be damned.
Replace Astoria with "predicted revenue," the family with "state's economist", and Dad with the "kicker amendment" and you have a close approximation of what this stupid law does to Oregon's finances. I don't have a good analogy for the corporate interests that will receive $200 million from the state's kicker, but in the end Oregonians will receive a check for $150. While that is great, it is impossible to purchase pothole-free roads or healthy schools for $150. Similar to Billy and Suzie, needs will be ignored that could be fixed by pooling or earmarking unexpected revenue instead of being "kicked back" piece-meal to individuals.
In the end, the kicker is nonsense. It is the only kind of law in the country, which has been on Oregon's books since 1979, and provides a selfish "me-first" sentiment rather than a coomon-sense "rainy day fund" for unexpected revenues that every other state has. In his column, Dave sates that Oregon is a "state prone to boom-and bust revenue cycles." There couldn't be a more simpler explanantion as to why the kicker should be repealed. It prevents Oregon from conserving funds to prepare for the future, allowing the state to be extremely susceptible to economic setbacks, as the disastrous 2001 recesion proved.
But Dave, a fan of the kicker as that means an extra dinner for two at McCormick & Schmick's this year, wants to talk "compromise." His idea? Allow the Legislature to have access to the $200 million being kicked back to corporations (two-thirds of which will leave the state) in return for slashing the state's capital gains tax and distributing the corporate kicker into a general rainy day fund. When you think about Dave's proposal for more than two seconds, you realize, as a compromise, it doesn't make sense.
First, capital gains taxes have no connection with the unexpected revenues being distributed through the kicker. None. Its just been on Dave's mind this week, so he connects the two together in his 'compromise.' As I've all ready pointed out, capital gains tax cuts benefit the investor class, with the occasional household earning less than $100,000 making an average of $14 through these cuts. It's a hand-out to those who don't need one, and the tax cut alone won't cover all the revenue lost. And any revenue generated would pale in comparison to the amount needed to fund the gaps currently plaguing the state, which raises the concern of insisting that the corporate tax kicker be deposited into a rainy day fund. Why insist that the money should be saved for the future while ignoring the problems of the present? A rainy day fund makes sense, but we need to make sure school districts are healthy and there are no glaring holes in local government's budgets.
'You just want to increase government spending!' the pro-kicker critics will respond. That is not what I want. Government spending should not sprawl, un-checked. At the same time, if our state and local governments can't provide essential needs and services, then what's the point of continuing to slash budgets? For example, consider the decreasing number of state troopers in Oregon as the methamphetamine crisis escalates. To aruge that more money, if its available, shouldn't be made available for State troopers is patently ridiculous.
So Dave's 'compromise' has been exposed for what it is: a sop to the wealthy investing class while tying ordinary Oregonians' hands from being able to fix funding problems that plague them on an everyday basis. Here's an actual practical compromise that could be applied to the kicker:
Keep the kicker in the constitution. As much as I hate it, I must admit I enjoy the occasional check in the mail. I'm a few DVDs short in my Cuba Gooding Jr. collection. However, amend the kicker law and make it so that if there are any funding shortages for key government budgets- such as school districts and the Department for Human and Health Services- those shortages should be filled from the unexpected revenue before anything is kicked back. Also, increase the amount that revenues need to exceed projected amounts to three percent. And earmark five-percent of returns to a rainy day fund. With this compromise, the infrastructure used by both individuals and corporations to generate such returns will be kept healthy, and ensure the generation of future revenue. Plus, everyone would get a check back, though it may be for $135 instead of $150. But money coming in the mail is always a good thing, regardless of the amount. Especially if its unexpected.
I mean, Dave could still have dinner for two at McCormick's for $135. He just may not be able to order the special.
posted by true_slicky at 2:53 PM
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