Things Don’t Look Different Here: Making Sense of Taxes and Spending in Oregon

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Things Don’t Look Different Here: Making Sense of Taxes and Spending in Oregon

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Like most other states, Oregon is facing a serious budget shortfall. Due to the economic downturn, Oregon expects $720 million less revenue than at the close of the 2001 legislative session. Additional anticipated costs of $130 million raise the General Fund deficit to $850 million, which must be closed by a combination of increasing revenues, using one-time revenue sources, accounting gimmicks, or program cuts.

Things Don’t Look Different Here: Making Sense of Taxes and Spending in Oregon

Executive Summary

Like most other states, Oregon is facing a serious budget shortfall. Due to the economic downturn, Oregon expects $720 million less revenue than at the close of the 2001 legislative session. Additional anticipated costs of $130 million raise the General Fund deficit to $850 million, which must be closed by a combination of increasing revenues, using one-time revenue sources, accounting gimmicks, or program cuts.

The debate over how best to balance to the state budget has been clouded by anti-government groups who have confused the public debate with misleading information about Oregon’s relatively high rank for per-capita total state and local government spending.

Among its findings, this OCPP analysis of Oregon’s tax and spending shows:

  • After accounting for federal aid received, general expenditures by state and local governments in Oregon are close to the national average. Oregon’s state government ranks 24th for general expenditures (less federal aid).
  • State and local government expenditures in Oregon have remained at constant levels, relative to income, for the last 20 years. Fluctuating between 19 and 20 percent of income, general expenditures from state and local governments in Oregon have risen only as fast as the state’s economy has grown.
  • Government employment has shrunk as a share of total employment. State and local governments employed 16.2 percent of all Oregon workers in 1979, but just 14.6 percent by 2000.
  • Only five other states dedicated a smaller share of their income to state and local taxes than Oregon. Oregon ranks 46th out of the 50 states and Washington, D.C. Looking just at state taxes, Oregon ranks in the middle of the pack. If fees and other charges are included, Oregon ranks 29th.
  • Oregon’s tax burden remained steady over most of the last 20 years. Total state and local taxes absorbed an average of 10.5 percent of Oregon’s income in 1978-79, and 10.6 percent in 1993-94, but just 9.3 percent by 1998-99.
  • Oregon’s total spending rank is relatively high while its tax rank is low because Oregon spends money that it receives from the federal government, and collects other revenues that are not taxes.
  • How Oregon ranks against other states is irrelevant to Oregon’s ability to afford the public goods and services that our state and local governments provide.

Download Thigns Dont Look Different Here Making Sense of Taxes and Spending in Oregon

Related materials:

News release on this report

OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.

Jeff Thompson

Jeff Thompson is an economist and policy analyst with the Oregon Center for Public Policy.

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