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Cap and groan: M48 critics rail

Proposed state spending limit draws fire from detractors, who predict dire results for schools, public safety and the poor
by: File photo,

When state Rep. Chuck Riley and challenger Terry Rilling squared off at the Forest Grove Senior Center last week, they found plenty to disagree about, from limiting abortions to funding education.

The final question asked at the Chamber of Commerce forum offered another chance for Riley, the Democrat, and Rilling, the Republican, to lock horns.

What is your position on Measure 48?

This seemed like a no-brainer for Rilling. The Republican hopeful has crafted his campaign on the notion that state government needs to live within its means, cutting waste rather than raising taxes.

Measure 48 is supposed to do just that, limiting state spending to a formula pegged to inflation and population growth.

Riley, predictably, opposes the measure saying it will force drastic cuts to social services and threaten public safety.

And Rilling? He agreed.

'There's not enough research to say it would do any good for our state,' he said. 'And I think there may be some research showing it would hurt.'

Rilling's response, and its echo by a sizeable number of other Republicans, is bad news for Don McIntire.

The man who fundamentally altered Oregon's property-tax system 16 years ago is back this fall with his latest plan to further limit government.

Gresham resident Don McIntire, the father of 1990's Measure 5, is campaigning for the state-spending limit.

McIntire says his proposal would allow reasonable expansion of state budgets from biennium to biennium. His opponents say the measure would damage state programs and result in a projected $2.2 billion spending reduction in the coming two-year budget cycle.

Measure 48 is a mere 270 words long, but the analysis and debates surrounding it already have consumed tons of paper, hours of airtime and voluminous bytes on blogs and Web sites.

The concept behind the measure is relatively simple: Oregon's state government budget can increase each biennium by an amount equal to the growth in population plus inflation. State fiscal experts estimate that, historically, Measure 48 would have allowed 10-percent expansion of the budget. By comparison, the actual growth in spending has averaged 14 percent per biennium.

The gap between actual expenditures and what would be allowed under Measure 48 amounts to billions of dollars over time. McIntire sees his initiative as a way to save money for a rainy day. His critics say it would further tighten what they view as an already-lean state budget.

In Colorado's footsteps?

While McIntire's measure means different things to different people, the 68-year-old author of the initiative wants to be clear on two points. 'This is not the same as TABOR,' he says in his emphatic style. 'And TABOR is not a failure.'

TABOR - the so-called Taxpayers Bill of Rights adopted in Colorado in 1992 - is important to the Oregon debate because Measure 48's opponents point to it as an example of what can go wrong with state budget limitations. In 2005, Colorado voters chose to suspend TABOR for five years.

'It didn't work for Colorado, to the point where it was suspended,' says Becca Uherbelau, communications director for Defend Oregon - a coalition that formed to fight both Measure 48 and Measure 41 in this election.

Riley wasted no time in playing the TABOR card during last week's forum.

'The TABOR bill in Colorado drove the state into the ground,' Riley said. 'They don't even have enough money to vaccinate their kids.'

McIntire, however, vigorously disagrees, pointing out that the Colorado measure restricted how much money the state could collect, while Measure 48 limits how much Oregon can spend.

'Colorado's is a revenue limit,' McIntire says. 'Any amount above that limit must go back to taxpayers. Oregon's is a limitation on spending. It doesn't command that anything go back to anybody.'

Uherbelau and Riley argue that, regardless of whether the measures restrict revenues or expenditures, both the Colorado amendment and the

say, because some categories of state spending must increase at a higher rate than population or inflation.

'The prison population grows at two times the rate of the general population,' she says. And with a wave of Baby Boomers approaching retirement, the senior population, which also receives state services, will grow at a much faster rate than the rest of the population, she says.

Health care and education costs - two of the state's largest areas of spending - also typically rise faster than inflation, Uherbelau says.

McIntire, however, sees other reasons for government growth - wasteful practices and bloated benefit packages for public workers.

Under Measure 48, McIntire says, the government would become more efficient as a result of the 'modest' limitations. Money would begin to pile up in a rainy-day account, and eventually the state Legislature could choose to send some of the money back to taxpayers or invest it in critical needs.

In either case, the state would have the comfort of knowing that it had billions of dollars stashed away in a rainy-day account. The Legislature would be able to break the spending limit only with a two-thirds vote of both chambers, plus a vote of the people during a general election.

Despite that high bar for busting the limit, McIntire argues that in a true emergency, the Legislature would have the support it needed to take such action - and it would have the cash in the bank to actually deal with a tsunami, earthquake or economic crisis.

The fact that TABOR was suspended in Colorado, he says, is proof that limits can be broken if necessary.

Potential effects debated

Opponents of Measure 48, however, portray the initiative as a dire threat to public schools, higher education and services for the poor and elderly.

They say that in an emergency, such as a tsunami or disease outbreak, the state would be unable to respond for months while the Legislature convenes, votes and then sends the matter out for the populace's approval in a general election.

But the question of emergency response is an incidental issue in the much-larger debate about state spending. The real issue is whether Oregon would prosper or wither under the new limitations. And both sides look to Colorado for evidence to bolster their cases.

McIntire, while arguing that his measure is better than Colorado's TABOR, nonetheless produces a list of categories in which Colorado is outperforming Oregon - from median income per household to proficiency in fourth- and eighth-grade reading.

'Colorado kicks our butt,' he says.

Uherbelau uses a different set of statistics to back her claims of impending doom. Under TABOR, Colorado tumbled from 35th in the nation to 48th in spending for higher education. Colorado is now 49th in the country in what it allocates for K-12 education as a percentage of personal income in the state.

'And it is dead last in vaccinations for children,' Uherbelau says.

McIntire notes that he has heard dire predictions before - during the debate over Measure 5 in 1990. That measure, which limited property taxes to $15 of $1,000 in assessed value, didn't bring government to a halt, he says.

Both sides seem to accept the projection that Oregon will have approximately $2.2 billion less to spend in the 2007-08 biennium than it otherwise would have. Measure 48 excludes some streams of revenue and expenses, but does apply to about $36 billion in spending.

McIntire says that the Legislature ought to be able to figure out a way to do without what amounts to six percent of the total budget. Even with Measure 48, he says, the state would have eight percent more to spend than it did in the previous biennium.

Uherbelau, on the other hand, says that the $2.2 billion would hit disproportionately hard on the state general fund, which was $12.5 billion in the last biennium. The Legislature would be less likely to touch spending that occurs outside the general fund, such as transportation projects funded by the gas tax. That means, according to Uherbelau, that the general fund - which pays for education, corrections and the Oregon Health Plan, among other things - would bear the brunt of the funding limit.

The measure's potential effect on the other spending also worries state Sen. Bruce Starr, who says he's opposing Measure 48.

The Hillsboro Republican, who is up for re-election next month, said that capping all state spending could hurt big-ticket projects like new roads.

'If you want to do a highway project that means you have to cut somewhere else,' he said. With schools, prisons and other projects popular with voters, he fears nothing will get built.

'I've been advocating for a big investment in Oregon's transportation system,' he said. 'If this passes, you can write that off. It creates false choices. That's my gripe with it.'

Members of the Forest Grove School District Board of Directors, who officially came out against Measure 48 last week, have concerns as well.

According to estimates provided to the district by the Oregon School Boards Association, Measure 48 would result in at least a $5 million hit to the district's $50 million annual budget.

McIntire says the school board association's numbers are bogus.

'They can't say that. They do not know,' he said.

Measure 48 might not affect the general fund at all, he says, and it is impossible for anyone to speculate on the measure's budgetary impact when the 2007-09 state budget doesn't even exist yet.

'All the measure wants to do is slow the growth in spending and save the state some money,' he said.

Rep. Riley, who's wrapping up his first term, said the fact that Measure 48 got on the ballot and is posting good poll numbers shows that the public wants lawmakers to do a better job of curbing state spending. The problem, he said, is that McIntire didn't come up with the right fix.

'Even the Republican governor in Colorado is calling it a big mistake,' Riley said. 'I don't think we want a failed policy in our state.'

News-Times editor John Schrag contributed to this report.