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Mail Tribune Local News Section
October 6, 2006

Spending limit called economic 'disaster'

Jackson County could feel the deepest hurt among Oregon counties if a proposed ballot measure is passed that limits state spending, officials said.

The potential loss of $23 million in federal timber subsidies would make the county's dedicated funding from the state even more vital to maintaining services, said County Commissioner Dave Gilmour. Measure 48 would drastically reduce that funding source, he said.

"I think it would be an utter disaster for municipalities and counties," Gilmour said. "In a time when we're probably going to have a reduction in (timber subsidies), it would have a double impact."

The measure would amend the Oregon Constitution to limit state spending to the percentage increase in state population plus inflation. It was authored by Don McIntire, the tax activist who formulated Measure 5, which cut property taxes in 1990, forcing the Legislature to take charge of funding schools. Oregon law now limits state appropriations to 8 percent of projected personal income.

The proposed spending limit likely would cut $10 million in state funds from the Medford School District's budget in this biennium and $8.8 million from the next, said Peggy Penland, a member of Medford's school board and Defend Oregon, a broad coalition dedicated to opposing Measure 48.

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"To have something like this hanging over us is just disheartening," Penland said.

Oregon University System officials also denounced the measure in a Thursday press conference. If passed, it would eliminate $2.2 billion from the 2007-09 budget, they said. Selling and repaying bonds for capital improvements to higher education also could count against the proposed spending cap, said Becca Uherbelau, spokeswoman for Defend Oregon.

Cuts wouldn't stop with education, Uherbelau said.

Health and human services would have been reduced by $98 million in Jackson County alone if the formula had been in place since 1990, Uherbelau said. The county's department of health and human services now operates under a $42 million budget each year and is funded almost solely by the state. Local public safety would have lost $2.7 million since 1990, based on projections by the Legislature's fiscal office, Uherbelau said.

Measure 48's placement on the November ballot was funded largely by Howard Rich, a New York City real estate investor and proponent of reducing government. Americans for Limited Government, which he heads, provided 87 percent of the $1 million in pro-Measure 48 contributions so far, according to The Oregonian newspaper.

"It's put out by people who really don't understand what government does for us and don't care," said Sen. Alan Bates, an Ashland Democrat.

"You'll end up with non-functional schools, unsafe communities. ... You'll have increased numbers of mentally ill literally wandering the streets," said Bates.

Bates and other opponents point to a similar measure's failure in Colorado, which passed its Taxpayer's Bill of Rights in 1992 before suspending it last year.

"Why do we think it would work here?" asked Rep. Sal Esquivel, a Medford Republican.

"We have in place spending limits," he said.

But Rep. Dennis Richardson, who has decided to throw his support behind the measure after initial uncertainty, said he doesn't believe the Legislature has the ability to "rein in its own spending."

Legislators have operated under a 6.8 percent annual spending increase over the past six years, Richardson said, citing an August report from the Legislature's revenue office. By contrast, average statewide inflation — based on Portland's rate — was 2.6 percent during that period, the Central Point Republican added.

"The Legislature has a habit of being an addict," Richardson said. "Its drug of choice is money."

Reach reporter Sarah Lemon at 776-4487, or e-mail slemon@mailtribune.com.

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