A Citizen's Guide to the Oregon State Budget

(EUGENE, Ore.) - As Oregon Voters prepare to decide whether or not to dedicate a greater share of their income to supporting the State Government it would be beneficial to have a better understanding of how that money is used and what benefits are conferred to the taxpayers in exchange for their investment.

The legislature declared last year, in House Bill 2500, that the lack of financial transparency in Government was an “emergency” for which an immediate remedy was required for “preservation of the public peace, health and safety.”

HB 2500 established January 1, 2010 as the deadline for the Department of Administrative Services to establish a new website providing detailed financial information for all State agencies.

This deadline has come and gone with no new websites being produced. Apparently the preservation of the public peace, health, and safety has not been a sufficient spur to action.

The Department of Administrative Services has a budget of $1.1 billion. It has not released a report to the public since 2008.

It is possible that Lonn Hoklin, the Public Affairs Manager for DAS who receives a salary of $92,664 dollars per year, could not find time while dealing with the staggering work load of making a total of 14 press releases in the last year. That is over 1 press release per month.

The highly paid staff at DAS have failed to meet the legislature’s deadline for delivering transparency to the taxpayers. They have failed to address what the legislature itself recognizes as an emergency created by a lack of taxpayer confidence in the honesty, integrity, competence, and value of the State Government.

Is this failure emblematic of the general state-of-affairs in State Government operations? A review of the evidence on this subject will shed light on that question.

Education is considered by many to be the most important social service provided by the State Government.

Given the importance of primary education to the public as the most important and most universally used Government service, it may be of some surprise that it only makes up 12% of the State’s budget.

When the legislature says that it must make cuts to primary education in order to close its budget gaps, it is relevant to ask whether or not it would be possible to make all of the necessary cuts somewhere in the other 88% of the State’s budget.

In 2007-2009 the primary (K-12) education system, which serves 560,000 students, had a budget of $6.2 billion. Community colleges, which served 176,000 students, had a budget of $731 million. Oregon Universities, which serve 86,000 students, had a budget of $5.2 billion.

Although the Oregon University System keeps the salaries of its employees secret, it is well known that they are the highest paid on the public payroll.

This budget includes the Department of Corrections, which had a budget of $1.3 billion. The DOC employs 64 individuals earning over $100,000 per year.

Why does the DOC require so many highly paid staff? Because inmates are guaranteed healthcare, and are attended to by a staff of doctors, dentists, and pharmacists earning up to $222,216 dollars per year.

That’s right. The second highest paid government employee is working to provide health care for criminals, while the people who pay him cannot afford healthcare for themselves and their own families.

Interestingly, Physician Specialists at the DOC are earning more than Physician Specialists at the Department of Human Services, and much more than Public Health Physicians. Apparently criminals are getting better care than children from low income families, the elderly, and the disabled.

Perhaps the fact that criminals are so deeply loved by the State Government is meant to assist them in their rehabilitation. Either that or officials at the DOC just love their fat paychecks.

The Oregon Corporate Welfare Department (sorry: Economic and Community Development Department) had a budget of $429 million.

This is the department that provides subsidies for Hollywood movie studios, green energy scams, and pharmaceutical companies, amongst others.

The governor is recommending a 200% increase in tax subsidies for movie studios. The Governor’s proposal is that Oregon taxpayers should give more money to private corporations producing movies in our State than is spent on our own public broadcasting system.

The human services budget is the largest outlay for the State. In 2007-2009 the budget was $12 billion.

The Department of Human Services runs the Oregon Health Plan, provides services for children and the elderly, as well as providing services to individuals with mental illnesses and substance abuse problems.

This is more or less your traditional “welfare” program. What you learn from the budget is that the welfare of the individuals working for the DHS, and the corporations they funnel money to, seems to be more important to them than the welfare of the people they supposedly serve.

The DHS is the one agency with employees who actually make more than those working for the DOC. 112 DHS employees are earning over $100,000 per year with salaries up to $242,000.

One of the issues with DHS spending is that much of it appears to be tenuously related to providing services. The Commission for the Blind ($16.2m), the State Commission on Children and Families ($88m), the Administrative Support Division ($484m*), and the Long Term Care Ombudsman ($2.7m) are examples of groups funded under the DHS that do not directly provide any services.

[*Governor’s proposal. The actual spending amount is not given in the document of the legislatively passed budget.]

A prominent feature of the DHS budget is the tens or hundreds of millions in corporate welfare being doled out under the guise of welfare for people who actually need it.

The Office of Private Health Partnerships, which is a subsidy for private health insurance companies, had a budget of $82 million.

Public health expenditures ($4.8 billion) include large sums going to private insurance companies, and other private for-profit corporations.

Other DHS programs, such as those providing mental health and addiction treatment ($766 million) also operate as conduits for public money into the hands of privately owned for-profit corporations.

If the Oregon Government actually provided real financial data, it would be much easier to find out who is profiting and in what amounts. The lowest estimates that can be made of public taxpayer dollars being turned into private profits are $10’s of millions, and the number is probably over $100 million.

This group of agencies has a budget of $875 million. Most of it comes directly from fees on the people to whom services are being provided. The one exception is the Bureau of Labor and Industries, which has a budget of $12 million.

Where the Government regulates individuals, such as Accountants, Contractors, or consumers of public utilities, it requires them to pay directly for the costs of regulation. Where the government regulates big corporations, it passes on the bill to the tax payer.

The costs for the legislature were $121 million for 2007-2009. This is an increase of 61% over the 2005-2007 budget of $75 million, and a staggering 208% increase over the 2003-2005 budget of $58 million.

Has Oregon’s GDP grown by 208% in those years? Have the incomes of Oregon taxpayers grown by 208%?

About the only things that are growing at a similar rate are foreclosures and unemployment.

Costs include $5.7 million for the Legislative Fiscal Officer, who has a staff of 8 people earning over $100,000 per year.

The Legislative Administrative Committee had costs of $68 million. For some reason that department employs three Chief Information Officers being paid over $100,000 per year. They have a fourth "Chief Information Officer" with a salary of $94,440.

I am not sure if they have ever heard the saying “too many chiefs and not enough Indians,” but it would seem to be applicable here.

Ironically, the entire budget for the Commission on Indian Services (another legislative department) is less than what is being paid to the holy trinity of Chief Information Officers.

$585 million: $369 million for judges, prosecutors, and courts, and $215 million to pay for public defenders.

Six-figure judges hearing cases argued by six-figure lawyers, so that they can put people in prison to be taken care of by six-figure doctors and dentists. Welcome to the world’s most expensive and bizarre circus act.

This is not a comprehensive review of the State’s budget. A comprehensive review is impossible because the data is not available, and the time it would take to prepare and present would be excessive.

What can be concluded from the available data is that the State Government’s budget includes hundreds of millions of dollars in corporate welfare, unnecessary administrative costs, and inflated salaries.

Oregon is a State with a per-capita income of $38,000. The taxpayers are employing 567 individuals (not including the university system) earning salaries of over $100,000 per year.

Public employees, including politicians, are employees of the taxpayers and of the citizens of this State.

It is rare for an employer to give their employee a higher salary than their own. The reasons for this are simple and obvious.

No publicly paid employee should be earning more than $100,000 per year in a state where the citizens who pay them are averaging $38,000 thousand.

Public salaries should be capped at 200% of per-capita-income, or roughly $70,000. If public employees want to earn more, then they should enact the policies necessary to increase incomes for all Oregonians. That is supposed to be their job anyway.

If anybody in government doesn’t want to take a 20%, or a 30%, or a 40% pay cut, so much the better. They can take a 100% pay cut.

Salem-News.com Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications. Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance. You can write to Ersun at: warncke@comcast.net

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Curt January 29, 2010 9:21 am (Pacific time)

So you want to cut the doctors and dentists to $70k? Good luck.. Curt

Veronica Marzilli January 19, 2010 8:13 am (Pacific time)

I did take issue with your statement that the Commission for the Blind doesn't "directly offer any services"...quite the opposite, actually. It is a servoce-bsed agency that offer training and rehab services to low-vision Oregonians - the only source for that type of help in the State. If their funding is cut, there's not any alternative that exists to get the blind assstance in being able to live and work effectively with their disability. I agree with challenging large salaries, but not core services like this agency provides. Thanks for listening!

Harris January 18, 2010 6:11 pm (Pacific time)

Measures 66 and 67 proponents may have a valid argument in defending our educational system. After all, an educated voter would clearly recognize why you don't increase taxes on small businesses during a recession.

Hank Ruark January 18, 2010 4:10 pm (Pacific time)

Friend Harris: Controlling concept in both mine-to-you: "Thus corporations finally claimed the full rights enjoyed by individual citizens while being exempted from many of the responsibilities and liabilities of citizenship. Furthermore, in being guaranteed the same right to free speech as individual citizens, they achieved, in the words of Paul Hawken, 'precisely what the Bill of Rights was intended to prevent: domination of public thought and discourse.' The subsequent claim by corporations that they have the same right as any individual to influence the government in their own interest pits the individual citizen against the vast financial and communications resources of the corporation and mocks the constitutional intent that all citizens have an equal voice in the political debates surrounding important issues.": -- David C. Korten - Source: in his book, When Corporations Rule the World, 2001

Hank Ruark January 18, 2010 2:54 pm (Pacific time)

Harris: 1. Unionism is Constitution at work; for governmental units it presents no more problem than does First Amendment: Simple common sense applied with all good will and professional management techniques a la Drucker. 2. Far better than before,but not good enough yet. Real national rational and reasonable problem is oldstyle planter-attitude now fully contorted into obstructionism no matter what nor how nor when nor why.

Harris January 18, 2010 11:45 am (Pacific time)

Henry Ruark you wrote and I am in 100% agreement: "Re nearly every other point, do believe transparency --as in more democracy for every democratic problem--is truly the ONLY answer..." So how do you think the current congress is doing in the transparency department?

Harris January 18, 2010 10:19 am (Pacific time)

Civil service salaries are there for every current and potential employee to evaluate. What needs to be done is to dissolve the unions in any employment where the taxpayer's taxes pays the salaries of employees. The conflict of interest is quite obvious, and there are already many employee protections in place to address employee abuse and to also provide a 3rd party for arbitrating salaries. It is very difficult to remove/terminate an incompetent employee who is working for the taxpayers, this needs to be changed.

Hank Ruark January 18, 2010 8:28 am (Pacific time)

Ersun et al: You wrote:"An interesting trait of Government spending priorities can be observed here. Where the Government regulates individuals, such as Accountants, Contractors, or consumers of public utilities, it requires them to pay directly for the costs of regulation. Where the government regulates big corporations, it passes on the bill to the tax payer." See, we learn rapidly from dialog; this paraphrases deep statement from corporate law involved in early work in D.C. making point of how to handle funding sought-then but open to varying state control. Re nearly every other point, do believe transparency --as in more democracy for every democratic problem--is truly the ONLY answer. But pragmatic politically unavoidable pattern, protocol and massive flow of corporate campaign contributions make it nearly impossible without the radical re-make of deeply-now distorted/perverted patterns, starting with party and corporate campaign "enforced purification."

douglas benson January 18, 2010 7:02 am (Pacific time)

Good idea ,good luck though .We have a contract with the OPEU we must honor .Not to mention they have huge political clout ,this would have to be done as a grass roots initiative . Corprate welfare can go along with no more tax incentives for big corps . The legislature is a big payoff scam and those that "play ball " get the sweet department positions .We need a clean sweep with regular folks that dont run huge campains .How do they have time to truly do the peoples businesss when all thier time is spent collecting monies for the next election and making promises of support for contributors . There is one thing I take issue to in your article ,if you think prisoners recieve good health care you are sadly mistaken .Staff infections are a good example ,staff ,TB, Hep C ,ect run rampant and are rarely treated properly . Then we get to pay the lawsuits because someone loses thier leg ect . Have cancer? Good luck getting treatment in prison .I know a girl who they refused to treat and by the time she got out her cancer was terminal ,it was treatable but they refused to treat it while she was in prison for charges related to her addiction .Another little tidbit for you all inmates are covered under the OHP used as an end run both on getting around the lawsuits for poor care , an increase of the corrections budget ,a huge increase and a huge drain on the OHP. Last but not least how about telling folks how many unfilled positions there are that departments still get paid for ,the old mob payment scam paying for "no show " workers . But these things wont change by not giving them the new taxes they wont cut the fat they will cut social services that directly effect the public . The changes we need will only come by citizen initiative and a legislature willing to enact them .So put your money where your mouth is and lets vote ! Write up an initiative and I will be happy to help collect signatures ect.

Josh A. January 18, 2010 12:11 am (Pacific time)

"If public employees want to earn more, then they should enact the policies necessary to increase incomes for all Oregonians. That is supposed to be their job anyway." That is a damn good idea. Link their salaries to ours. It will happen but not soon because corporate media would have us all whipped up in a huge anti-communist fervor. Well... What we have NOW is a Corporate Fascism that really is dying fast in the information age. The only change I believe in is what I take into my own hands. That's all you've got. No more pinning all your hope and dreams on a politician. Centralized power will debase in the 21st century. The cream always rises to the top, a little 'evening out' of a elitist culture is not communist. The best will always make more because they give more.

Josh A. January 18, 2010 12:06 am (Pacific time)

Daniel January 17, 2010 5:10 pm (Pacific time)

Ersun the investment in the film industry brings much more into the state that it cost . The public broadcasting that I no longer watch is full of ads in the begining and end of the show . Its also true there are many over paid in the state system , I also think $70,000 is too low to find quality people in certain positions .

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