States need smart spending for tough times
As the economy heads toward recession, state government budgets are projecting much lower revenues than in the past. In an Oregonian op-ed, Eric Fruits suggests first applying some smart spending principles before heading down the tax hike route.
This isn’t a good time to be a state legislator. In Oregon, state revenues are now projected to be $1 billion short of paying for existing services in the next biennial budget. At the same time, the economic downturn is putting pressure on all levels of government to hand out help to households and businesses. …
As Oregon households and businesses see their incomes shrink over the next year or so, state and local governments will be challenged to explain to taxpayers why they should open their wallets wider for more taxes.
By adopting principles of “smart spending” the incoming Legislature can fund valuable services and calm taxpayer jitters. The principles of this concept allow for increased spending — even in a recession. However, smart spending puts a burden on policymakers to critically evaluate benefits against burdens. …
[I]f new road and rail projects truly are needed, then roadway users and rail passengers should be willing to pay for such improvements. Properly implemented mileage-based user fees can fund construction, reduce congestion and diminish emissions. Transportation revenue would rise in line with road use, ensuring adequate funds for road maintenance and expansion. Because better roads boost economic productivity, the benefits to all Oregonians would exceed the individual costs of user fees — an important principle of smart spending. …
Another principle asks whether more money will produce better outcomes: How much bang will Oregonians get for taxpayer bucks? In a series of studies for the Cascade Policy Institute, Randall Pozdena and I found that, after accounting for differences in income and demographics, Oregon’s state and local government spending is among the highest in the country. Spending on K-12 education and on police and corrections are especially high relative to that of comparable states.
Update: The Statesman-Journal, the Beaverton Valley Times and the Forest Grove News Times have also published the op-ed.
