Rainy-day fund should be good fit for Oregon
Fund will keep the state afloat during times like the recent recession
Thanks to action from the state Senate last Thursday - and signed by Gov. Ted Kulongoski last Friday - Oregon will be better prepared for the next recession than it was for the last one.
Earlier this decade, the state's budget was ravaged, its citizens were left vulnerable and its economy was diminished by the worst recession in two decades. Fortunately, memories of that experience were still fresh enough in legislators' minds to allow them to work through political differences and pass legislation establishing a meaningful rainy-day fund.
The plan will be funded by a one-time cancellation of the corporate kicker. Businesses will give up nearly $300 million in tax rebates for just one biennium, but in return they will be assured that state services will be better protected from economic downturns in the future.
Those services are important not just to individual citizens, but to the state's collective economy. That's why the state's major industry groups were willing to forego the corporate kicker on a one-time basis. The plan approved by the Senate - after earlier passing the House - also calls for 1 percent of future state budgets to be allocated to the rainy-day fund.
Sen. Richard Devlin, D-Tualatin, whose district includes Lake Oswego, voted in favor of the measure.
The bill drew the fire of some Senate Republicans, who felt it constituted an unfair tax on Oregon businesses.
'We can put lipstick on the lips of a sow and at the end of the day it's still a pig,' said state Sen. Doug Whitsett of Klamath Falls, who argued against the measure.
A rainy-day fund has been discussed for years, with both Republicans and Democrats giving lip service to the concept but failing to agree on details. This most recent deal almost fell apart several times as it traveled through the House and Senate. But now - with business people leading the way - Oregon finally has joined most other states in the nation in recognizing that it is only prudent to have a savings account for those inevitable tough times.