Alan Cohen
We can’t take an official position of the We the People party on the issue of the impacts on Oregon state and local budgets (because we can’t yet canvas the voting public), but I will present here some thoughts consistent with our principles.
To respond to the immediate crisis, we Oregonians would do well to decouple our tax code from our present rolling reconnect policy.
If money for services deemed essential by the state of Oregon (of course, such services must be vetted for necessity, cost-benefit value, corruption and effectiveness) is being cut by the federal government to decrease taxes for corporations and the rich, that money should be replenished by increasing state taxes on corporations and the rich.
A balanced tax increase mirroring the federal tax decrease would make the most sense.
Reasonable supplements or alternatives might be rescinding tax abatements; auditing the tax returns of individuals and families, with annual incomes greater than $500,000 (and corporations with revenue more than $500 million) per year or families with wealth greater than $10 million; and/or increasing inheritance taxes by perhaps 3 percent.
The Democratic response to the transportation component of the problem involves increases in fees and gas taxes, regressive taxes that will affect the people getting the least benefit from the federal tax cuts more than those getting the most benefit (contributing to yet another bipartisan increase in inequality).
The Republicans have promised a solution that will not raise taxes, one must assume by cutting projects and services for lower income workers. The University of Oregon has so far responded with layoffs. There are better, more equitable choices.
To address the issue of federal funding of state governments in the longer term, we must first elect governments of by and for the people. (Without that change nothing substantive will be done, so please join us and help us to elect such governments.)
We have chosen to be a federal constitutional republic, with local, state and federal governments, because we recognize that the needs of different parts of the country are various, and many issues can best be addressed locally or regionally. Each government collects its own taxes and tries to fund itself.
However, something changed 50 years ago that is not generally recognized, and that has amplified the importance of federal contributions to state coffers: President Richard Nixon took us off the gold standard. This made balancing the federal budget less important.
We had already learned during the Depression that a deficit created by government spending could be beneficial, and, except briefly at the end of the Clinton administration, we have had one ever since. But now, because we no longer need a gold reserve to back up each dollar, our federal government (but not our state or local governments) can print as much money as it wants.
The only restraint is the impact of printing (or electronically transferring) too little or too much. Too little can choke the economy, and too much can lead to inflation — but only if the money generated is not used productively. Money given to states to educate the young, maintain roads, improve health, feed children, develop communities, secure incomes, and create jobs is productive and so a safe and useful reason to print money.
Last year, the federal government provided a little more than a third of state and local budgets as it has for decades. If that contribution were increased to two fifths, it would go a long way toward making state governments solvent again.
Naturally, what is being funded matters as well, and it has been medical costs, particularly Medicaid, which is budgeted by states, that have diminished funds available for all other purposes. In 1970 Medicaid accounted for 11.3 percent of federal grants to states and today it accounts for 56.8 percent. Why medical care has become more expensive and less effective is a matter for another presentation. But addressing those costs could rejuvenate state budgets.
Alan Cohen was chief of primary care at the Roseburg VA, based in Eugene, prior to retirement. His poetry has appeared in nearly 100 venues; in 2023, Easy in Harness: A productive approach to hiring a good manager was published, and in 2024, Taxonomic Vignettes, a book of poetry; and this fall, Inferno, a novel, will appear.
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