After tax hike, decreasing revenue has left Oregon with $563 million budget deficit

Posted on May 27, 2010 by

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You mean raising taxes and driving businesses out of the state actually made revenues DECREASE? *Head slap* Who could see THAT one coming?

When will they ever learn their lesson?

From the Oregonian:

Shock waves from the recession continue to wreak havoc in Oregon, punching a big hole in the state budget and prompting Gov. Ted Kulongoski to order hundreds of millions of dollars in cuts to schools and other state programs.

The cuts, if they stand, could eliminate school days, idle some state police troopers, and lead to pay freezes and benefit rollbacks for state workers.

“There will be layoffs,” the governor stated flatly.

Why do they always start the cuts with the essentials (police, fire, schools) and leave all their pet projects (green subsidies, the arts, light rail, bike trails) off the chopping block?

They always threaten the schools and use “the children” as their excuse to raise taxes (as they did with their Measure 66 & 67 marketing campaign), and then go spend the money on other things, so the kids get screwed anyway!

Even some Democrats are starting to realize that raising taxes has had the opposite effect that they had hoped:

Lower tax collections? How can that be when the majority in the legislature only a few months ago got the majority of voters to approve tax increases on business and people in higher income brackets?

Maybe it’s because, as the opponents of those tax measures said at the time, many of those people who were supposed to pay the higher taxes decided they were paying enough already. So maybe they closed the small businesses that provided them with their personal incomes and retired.

Maybe they resented the implication that they could afford to pay the state more even though, in their own eyes, they were already paying plenty and also had other obligations they could not ignore. So they might have talked to their tax advisers about additional ways to defer or shield income, not just to save money in a tough economy but also to make a point.

And maybe the opponents were also right that in a deep recession, it is stupid to raise taxes and depress the business climate even more.

Such arguments fell on mostly deaf ears with the majority of voters. But the facts of economic life don’t care what voters believe. What counts are the figures and hard facts.

The hard facts are that less tax is coming in, less than what the proponents of the tax hikes had promised and hoped. And those who maintained the tax hikes would not solve the problem were proved right.

Oregon’s spending problem drives up deficits as Dems propose more tax increases

Cross posted at ThoughtsFromAConservativeMom.com

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Posted in: Oregon