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Legislative Report 5-05
March 25, 2005
Number Crunching
As Chair of the Ways & Means
subcommittee on General Government, I do a lot of number crunching and
fact-checking. Listening to all of the arguments as to why this or that
expenditure is “critical or essential” has made me a bit cautious about
believing everything I hear. In fact, when anyone tells me that Oregon
ranks first or last when compared with what other States are doing, I
automatically want to know the context for the statement and the methodology
or assumptions leading to the conclusion.
The numbers really get
interesting when used to promote spending cuts or increases in spending to
spur growth. I am well aware that just about any argument can be supported
with statistical analysis and that statistics are often abused, but a few
comparisons might be helpful the next time someone you know cites a few
“facts”.
Does a relatively low tax
burden really spur growth? According to the 2000 Census the fastest growing
state during the 1990-2000 period was Nevada, which grew by 66%. Oregon, by
the way, grew by 20% during that same period. When the tax burden of Oregon
and Nevada are compared, however, Nevada has the 11th highest tax
burden in the Nation and Oregon ranks just 29th.
Washington grew at a
slightly higher rate than Oregon, 21% compared to Oregon’s 20%, but overall
taxes in Washington gave it the dubious honor of being the 8th
highest taxing state.
Taking this discussion to
the extreme would mean that the state with the lowest tax burden should have
had the highest rate of growth. Well, the lowest taxed state is Alaska, but
its growth rate of 15% put it even behind Oregon’s growth rate. Looking at
the Lower 48, Alabama has the lowest tax burden, but its growth rate was
just half that of Oregon’s.
Here is a number that might
surprise you. When measuring the effort taxpayers make to fund K – 12
education, the fairest method is to calculate how many dollars are invested
per $1,000 of personal income. It should come as no surprise that the state
with the highest investment is Alaska at $64 per $1,000. The lowest State
is Nevada with just $30. Oregon is tied with Arkansas at $41 per $1,000 of
personal income.
The next time you are in a
conversation concerning taxes and spending, it seems you can safely say that
Oregon is close to the middle in just about every category related to state
and local taxes and expenditures. As a member of Ways & Means my goal is to
ensure that Oregon ranks number one when it comes to how wisely our
tax dollars are spent.
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