Oregon could use a Grace Commission

Three views • How can we salvage the failing economy and beef up a lean budget?

Since the first day of the 2003 legislative session, Oregon lawmakers have wrestled with a recession-induced decline in state revenue. That decline has been severe:

Between 2000 and 2002, the state's tax intake plummeted 16.7 percent. And in late spring, state economist Tom Potiowsky announced that revenue would fall yet again, this time leaving lawmakers $634 million short of funding the $11 billion state budget their leaders had proposed for 2003-05.

To address the shortfall, the Legislature may raise income, beer and wine taxes and even institute a state sales tax. But are more taxes needed?ÊIs Oregon's problem inadequate revenue or excessive spending?

A survey conducted by the Small Business Survival Committee, a national business-advocacy group, suggests the answer:Ê'The committee released a report ranking the states in terms of fiscal responsibility for the period from 1992-2000,' BrainstormNW magazine summarized. In that period, 'per capita state spending in Oregon increased by 68.9 percent, while inflation over the same period registered only 16.4 percent' Ñ leaving Oregon 49th (before only Mississippi) in spending restraint.

Ergo: Before 'enhancing revenue,' Oregon should determine how to wring every last ounce of productivity from what taxpayers already send it. To this end, Gov. Ted Kulongoski and state legislative leaders should appoint a task force to scrutinize every state program and ask:

Does this program serve a legitimate government purpose?ÊIf it doesn't, can it be abolished?ÊIf it does, can its agency administer it less expensively and more efficiently, or might the private sector manage it better?

A precedent exists for such a task force.ÊIn his first term, then-President Reagan commissioned a panel, chaired by businessman

J. Peter Grace, to examine the federal government in minute detail for needless, wasteful or inefficient spending. At the conclusion of its 18-month study, the Grace Commission forwarded about 2,500 proposals to cut, streamline or privatize federal programs. From three years of budgets expected to total about $3 trillion, the commission identified savings of $424 billion Ñ 'without,' the commission noted, 'in any way harming necessary social welfare programs.'

Many of the commission's recommendations were administrative: to consolidate management of duplicate programs, sell excess federal land and institute user fees for 'recipients of government goods, services or other benefits that are not shared by the public.'

But the commission also suggested that $28 billion be saved by 'contracting out' some federal services to private companies. Those services were as diverse as constructing federal buildings, processing Social Security computer data and managing dams, airports and military commissaries.

Today, the trail blazed by the Grace Commission is trod anew by President Bush. This spring, The Associated Press reported, about 850,000 federal jobs were 'opened to private companies under new rules É that encourage competition to replace federal workers who perform tasks such as giving weather reports to private pilots, fixing computers and taking money and tickets at national parks É Government studies show that savings of as much as a third can result from competition.'

An 'Oregon Grace Commission' could do for our state government what the original did for the federal government. It could be composed of nine to 11 independent, objective Oregonians who have no financial interest in any state government program.

Such a commission could include Democrats, Republicans and independents. It might include a representative apiece from the Cascade Policy Institute (whose raison d'etre is downsizing government) and Associated Oregon Industries (whose president, Richard Butrick, has forwarded specific ideas to cut state government without infringing on its fundamental responsibilities).ÊAnd it could be given reasonable time (say, 12 months) to complete its work and submit its recommendations.

'We have proved time and again that we can find common ground to do what is right for Oregon,' Kulongoski said earlier this year. To prove it once more Ñ and help assure that state government serves Oregonians' needs while living within their means Ñ our governor and Legislature should appoint an Oregon Grace Commission.

Richard F. LaMountain covered the Grace Commission in 1984 while he was assistant editor of the national magazine Conservative Digest. He lives in downtown Portland.