Posted on 01/28/2003 8:33:55 PM PST by chance33_98
Oregon's secret surplus is fools' gold
01/28/03
ROBERT LANDAUER
O regon Has At Least $11.04 Billion In Potential Surpluses of the Taxpayers Money It Is Not Using."
This provocative headline appeared over material distributed during the statewide special election on the temporary income-tax increase. Regardless of how the vote turns out tonight, it's important to challenge this misinformation and manipulation. It was distributed by FreeRepublic.com, which describes its operation as "The Premier Conservative News Forum."
Their idea is that the state has "potential surpluses equal to $3,147 for every man, women and child in Oregon" that could end an artificial budget crisis (www.freerepublic.com/focus/news/824703/posts).
Theirs is a cramped, peephole view of the world of a type widely and unfavorably known in economic circles.
The authors, for instance, were shocked that Saif Corp., the workers' compensation insurer, has piled up $3 billion of reserves over 67 years -- more than enough to fund Oregon's current services shortfall.
This money is not available for General Fund uses. Most of it has been set aside to cover already-filed claims, the rest to pay for injuries for which claims have not yet been filed. Experience enables the company to estimate these future claims quite accurately.
If Saif didn't set aside the money, it would be put out of business, closed. And if the reserves were raided, current premiums couldn't continue to cover payments for work injuries that have accumulated over many years.
The insurance industry calls these long-term obligations its "tail."
Saif's tail is 60-70 years long, says Cecil Tibbetts, vice president of external affairs. "Saif has a claim that came to it in 1939. The company is still paying because the person was totally and permanently disabled, and the company must provide wage replacement and all medical expenses . . ."
Among other big pools of money supposedly available to be drained are $1.6 billion of unemployment compensation reserves, $74 million of Residential Assistance reserves, $641 million of Housing and Community Development money, $596 million of Oregon Health & Science University funds and on through some 40 state accounts. To these they would add "potential surpluses at the school districts, cities, or counties in Oregon."
As with the Saif case, the authors get many facts right, but fail to get the right facts. The most important missing information is that they don't present corresponding liabilities or restrictions on the use of that cash; for example, accounts payable that are paid July 1, the start of the fiscal year.
The presentation ignores constitutional and legal limits on use of the "potential surpluses." The Unemployment Insurance Fund may be used only to provide jobless benefits. Similarly, other laws covering fiduciary responsibilities prohibit accessing or using the moneys for other purposes.
No matter how hard we rub the lamp these propagandists offer, no genie will let us collect a multibillion-dollar bonanza of surpluses.
I t was common during the election to see letters to the editor and hear talk-show groupies say things like this: "The public is quite aware that there is no such thing as a temporary tax increase."
Rubbish! Oregon enacted temporary tax increases twice before in order to ease recessions' hammer blows to public services. A 45 percent Oregon income tax surcharge was imposed in 1955. It was in effect for that year and for 1956, then ended. In 1982, Republican Gov. Vic Atiyeh and the Legislature's Democratic majority collaborated on a one-year income tax surcharge rising from 5 percent to almost 9 percent depending on ability to pay. It was extended for two more years by the 1983 Legislature and then died.
In addition, about 20 percent of locally imposed property taxes are either temporary bonds to raise money over a fixed period or are local-option taxes, temporary additions over the permanent taxing authority. In fiscal 2002 total property taxes were $3.1 billion. Of that $481 million were bonds, and $126 million were local option taxes. They require local voter approval, and most have a maximumn five-year life. Reach Robert Landauer, editorial columnist, at 503-221-8157, or robertlandauer@news.oregonian.com
Comprehensive Financial Reports are interesting critters and citizens should investigate them in their own locales.
Best regards to all,
Best regards,
It's a great night to be conservative! First, the SOTU speech...then measure 28 going down...and, now the icing on the cake...
getting under the Rats skin!
Color me happy...
Dessert, I mean.
Here is another thread I just saw that is also likely to have some Rats in a frenzy. We are toppling all their sacred cows tonight.
Just when I thought it couldn't get any better than this...;o)
Nothings better than a good, conservative overdose!
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