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About Eugene register-guard. (Eugene, Or.) 1930-1983 | View Entire Issue (Jan. 13, 1963)
( Jafe 6A .EUGENE REGISTER-GUARD, Sunday, Jan; 13, 1963 Legislature Has Few Problems Money Wouldn't Solve By PAUL W. HARVEY JR. -.. ' Of tbc AuocUted Pnu " SALEM Twenty years age the Oregon Legislature faced 'the problem of having so much money it couldn't spend it. So .it gave rebates to the income taxpayers. Now things have come full circle. The legislature is faced with a financial crisis for the first time since the great de pression of 30 years ago. This crisis will overshadow all other problems that the law makers will face when they meet in Salem Jan. 14. Almost all of the problems center around the need for more revenue. '- For the past 20 years, the legislature has had a good-sized general fund surplus on hand. Now the general fund will be $13 million short of finishing this biennium, which ends June SO. ' Most of the money problem is caused by the great need of the state's schools and colleges. If it weren't for this, the state might get along for the next two years without a tax increase. V Here are the 10 biggest issues many revolving around mon ey, that will face the 1963 Legislature: : - Taxation , Gov. Mark 0. Hatfield favors a net receipts tax, which is modified income tax that would reach into the lowest brack ets and abolish all deductions. He also wants a 4-cent cigarette tax. These would be placed on a special election ballot dur ing the legislative session. There already is strong opposition to his plan. ' Constitution The Legislature will consider a proposed new state Con stitution that has been written by a special 17-member com mittee. It has sparked much controversy. Community Colleges The legislature will take a second look at its community college program. Some lawmakers feel there should be restric tions on the number that can be created.. Inmate Labor The legislature will reexamine the system under which prison inmates do much of the construction and other work at state institutions. Labor leaders oppose the use of such labor. Higher Education Hatfield recommends $68.8 million in this category, "an increase of $13 million over the total for this biennium. But the state Board of Higher Education wants $10 million more than the governor recommends. The governor also proposes a $45 million bond issue for higher education buildings that would be put on the special election ballot. Labor-Management Some hot arguments are expected over the AFL-CIO proposals for a state minimum wage and bigger unemployment and industrial accident benefits. The heated controversy over allowing insurance companies to write industrial accident in surance is due for a return engagement. Highways The Highway Commission wants the 6-cent-a-gallon . gas tax boosted to 7 cents to provide more construction money. The truckers will battle again for reduced truck taxes. There will be more efforts to issue bonds for highway construction. Basic School Hatfield recommends that the level of aid to local dis tricts be boosted from $120 per child per year to $130. If the legislature doesn't do it, then school districts will have to make up for it by increased property taxes. Welfare Hatfield wants the medical aid program broadened for the aged and he also asks for 261 more welfare employes. He says that the additional employes would make it possible to rehabilitate more welfare cases and get them off the relief roils. Milk The 1961 legislature passed a law providing for minimum milk prices to producers, but it expired Jan. 1. This probably will become an issue, especially if the distributors start cut ting prices. Other Issues There will be other issues. One hot one might be whether to abolish the death penalty. This will center about the fact that two young slayers a man and a woman are scheduled to die during the legislative session. Other important issues although not so controversial center about proposed regula tions of real estate developments, such as those in Eastern Oregon; making it easier for cities to annex outlying areas; and revising the form of government for Portland and Mult nomah County. Two Legislators Discuss Problems of '63 Session EDITOR'S NOTE: The Associated Press asked two well-known and experienced legislators, ' a Republican and a Democrat, to write about the problems facing the 1983 Legislature, which , convenes next Monday. One story is by Sen. Walter Leth, R-Salem, the other is by Rep. Rich ard Eymann, D-Mohawk. Eym ann By RICHARD EYMANN '- The most important problem facing the Legislature is getting enough money to meet governmental needs for the next bienium. , . We have a choice: either a drastic cut In needed government services, or agreeing to pay more money for services we have been getting. i ' We have been living off a surplus, which now is gone. The state's economic growth hasn't been as rapid as hoped, so if we want to keep the same amount of sevices we'll have to pay a greater share of our total income. If we don't continue at the present level, the critical expenditures are very difficult to cut. For instance, state aid toJocal schools re duces the dependence on property tax. .; Even if we abolished the entire general gov ernment budget of $29 million which includes the operation of the Legislature, all courts and tho entire executive branch we still would be short $27 million in new money needed, and that doesn't include tho bonding proposals for higher education buildings. In higher education, the boom of students born during the war years Is hitting the col leges. It we are to provide these students with the opportunity to make the most of their lives and become producing Oregon citizens, we have to meet the requirements. . The governor has proposed additional reve nues of only $49 million to meet this proposed budget. But if he would have been absolutely honest, ho would have asked for $36 million. He asked for expenditures $7 million greater than dependable revenues, promising that state ' agencies would spend that much less. I welcome his change of attitude on bond ing, which he so vigorously opposed four years ago In his inaugural address. Now, he's gone to the other extreme, proposing a $45 million bond issue for higher education over two biennlums. Bonding should be used, but I don't agree that we should use all of it In two biennlums. . Reform of the income tax is essential. There aro a number of existing loopholes that can be plugged, both in personal and corporate tax. An elimination of the federal income tax deduction from tho state income tax would keep millions of dollars in Oregon that now flow to the federal government. . The property tax, earmarked for local gov ernments, raises twice s much money as the income tax. But all of the taxes we pay to any government eventually como out of individual incomes. The state can assist In shifting the burden to a fairer form of taxation by collecting money for local governments through an Income tax, which would result in a direct reduction of everyone's property tax. Tho amount of this reduction would depend on how much the peo ple want Leth' By WALTER LETH The 1S63 Legislature isn't going to have many problems that an awful lot of money won't solve. The Legislature eventually is going to have to consider a re-evaluation of the entire state tax program. But I doubt if we will get it this session. Education is the, big responsibility facing the Legislature, and education actually might Governor Optimistic . For Program SALEM V-Goy. Mark O. Hatfield, who is about to be gin his second term in office, thinks the Legislature will ap prove his financial program. He knows there is opposi tion. , "But I have high hopes that the Legislature will pass it, even though it might be modified," he said recently. He considers his net re ceipts tax proposal the major point in his program, and be lieves the Legislature, will have to pass it. The net receipts tax would . touch persons who do not now pay an income tax. It would levy a 1 per cent tax on everyone. It also would Who Keeps the Store? - ' - Legislating Darn Hard on Wife and Kids sion, We're approaching the time when college enrollments and college facilities are going to be unbalanced. , . Then, of course, tho building program of higher education is going to have to come in for strong consideration because of the large influx of students or we're going to faco a limitation on the number of students by rais ing standards. The present income tax places an unfair burden on the single man," Hatfield said. be at a crossroads during this legislative ses-, elin,lnat; aU deductions. For those in the higher brackets, there 'would be a sliding scale of tax rates. The governor believes his proposal would increase in . come tax revenues about 10 per cent. He also wants a 4-cent-a-package tax on ciga rettes. "The net receipts tax is If we do that, wo say to a certain age needed to broaden tho base. group, "You re not going to nave tne same educational opportunities that all others be fore you have had." A re-evaluation and re stating of the policy on the community college program also will be necessary. An increase In basic school support will be requested and certainly needed. Basic school support Is going to be more important in alleviating property taxes than ever before. Property taxes on income-producing proporty are about as high now as possible. The Interim Legislative Committee on Agriculture, of which I was a member, recom mended a complete re-study of the relation ship of taxes on farm property to the income this property produces. The Impact on agri culture was all our committee could consider, but this concept also should be applied to other industry. There is a growing feeling that we ought to have a uniform property tax for education. You're taxed differently now according to where you live, but education is the responsi bility of the state and a tax for it ought to be uniform, as it is with the Income tax. A complete revision of the tax structure should be based on at least four different points: Tho ability to pay; services received; fairness, and promoting Oregon's future de velopment rather than retarding it. I believe we re going to have to face an By DAN SELLARD or tho Register-Guard Nine Lane County legisla tors and their families will undergo serious disruptions in their living routines starting 1 Monday morning. Some of them will leave their children in Eugene, oth ers will take them to Salem. Some will live in apartments and others will rent houses. In all cases they agree that public service is fine, but it's darned hard on "the wife and kids." It's also a burden on those who are left behind to "keep the store." These are the busi ness 'partners who hate to share their colleagues for four or five months. Literally keeping the store, for instance, will be Mrs. Gene Hulett, whose husband will be a freshman in the House of Representatives. The Huletts run a small grocery store in Eugene and Mrs. Hu lett will tend the till while her husband is away. The Huietts have a son in high school at Eugene. Representative Hulett has an apartment rented in Salem. Sen. and Mrs. Donald Hus band will do this session as they have for some years live in a motel apartment in Salem and come home to Eu gene each weekend. Husband . is a senior partner in a law firm and tries to catch up on things at home each Saturday and Sunday. The couple has no children at home,' Rep. and'Mrs. Richard Ken nedy have been at Salem for some time. Kennedy was'exec utive secretary of an interim committee, so they and their two children are pretty well . established at the capital city.' They live in a two-bedroom furnished house. Son Steve goes to first grade at a Salem School and daughter Shannon goes to a nursery school. Mrs. Kennedy, who has previous legislative experience, will be her husband's secretary in the House. Sen. Glen Stadler and his wife, Helene will be in Salem nearly all the time. Radioman Stadler has interests in sta tions in tho Salem area as well as Eugene so, business wise, being a legislator will not be a large burden. The Stadlers have rented a fur nished apartment in Salem. They have no children. Rep. Veola Wilmot will be living in Salem in an apart ment she is renting from a school teacher friend who is . going on a trip. Mrs. Wilmot is on leave from her teaching job at South Eugene High School. A daughter will live in her Eugene place while she is gone. Sen. Edward Fadeley will keep his one-man law office in Eugene open while he's , away legislating, and will, come home each weekend. Early in the session he'll try to get to Eugene on Monday afternoons. His wife, Nancy, will be his legislative secre tary and the Fadeleys will live in a rented house in Sa lem. Charles, 6, will go to a school in Salem and daughter Shira will stay home with a babysitter. Rep. F. F. Montgomery, House minority leader, is co owner of a Eugene insurance firm and he, also, will travel back and forth to maintain his business ties. "Monte" will live in a Salem motel and his wife, Lois, will stay in Eugene most of the time, tending to the Montgomery children, Dianne, 15, Steve,12 and Vicky, 8. Rep. Edward Elder, his wife and 13-year-old son Steve, will live in Salem in a rented house. The Elders have rent ed their Eugene place. Mrs. Elder will work as her hus band's legislative secretary. The couple has two other chil dren, one married and one at the University of Oregon. - The most complicated ma neuver of all will be executed by Rep. and Mrs. Richard Ey mann and their eight children ages 2, 6, 7, 10, 12, 13, 15 and 17. The Eymanns run a sheep ranch in the Mohawk area, and the family will be divid ed between there and a house in Salem. Three of the children will be in Salem' when the session opens, four more of them will move there when this school semester ends on Jan. 25 and one, the oldest boy, will stay at the ranch and attend Springfield High School where he's a senior. Juanita Eymann will be her husband's secretary at the Legislature. All this maneuvering will come to an end some time in May and the county's legis lators will then return to Eu gene and normal routines. Two Prof essors Call for Major Tax Reforms But They Doubt It Will Happen This Time By AL DEN BESTE Of (he AuocUted Preu SALEM The 1963 Leg islature should consider ma jor tax reforms, along with raising more money for the state, in the opinion of two political scientists. But both agreed that the Legislature probably will not do this. The two William McClen aghan of Oregon State Uni versity and Marko Haggard of Portland State College were asked by The Associated Press tho course they thought the Legislature should follow. . Both men are specialists in the field of American, local and state governments. Mc Clenaghan is the author of a widely used high school text book on American govern- clection by the people confirming or not con firming the action of the legislature with re- mcnt. spect to any tax program that comes out. McCIenaghan said, "I think I don't think we'll have time to do that it's obvious to most observers during tho session, as the governor has pro- including a majority of posed. , members of the Legislature ' Constitutional revision and welfare pro- that the state's tax structure grams also will be important considerations at ' is in serious need of thorough this session. overhaul , . . Unfortunately, I'm afraid the session will meet the state's financial needs in stopgap fashion, probably by adding yet more patches to the patchwork tax system we have now." McCIenaghan referred to Oregon's constitutional pro vision against attaching an emergency clause to tax measures. This makes it pos sible for the people to refer tho measure before it be comes effective, and to keep it out of force until it Is voted on in the next election. "The ever-present threat of referendum should not per suade the Legislature as it has in the past that discretion is tho better part of valor. Un fortunately," McClen a g h a n added, "I'm afraid that it will." . Haggard called for "a thorough objective study to find out where the tax impact falls" in the state. "I think a great deal of misleading in formation has been put out about Oregon's tax policy," Haggard said. "For example, a number of studies show that compared to our sister states, we are not only in better fi nancial shape, but have a much better tax policy." "On this score," Haggard said, the public has been misled, and, "as a conse quence, it has put the Legis ture in a very awkward posi tion," in examining tax re form. ' Haggard said the people did not get a clear-cut choice of alternatives in the recent elec tion; "There probably wasn't any race in which the major cru cial issues were discussed and alternatives present to the vot . ers," he said. "All you had was name familiarity or party labels and party label does not signify anything." McCIenaghan and Haggard both said that the present property tax is 'the most un fair tax in the state." "It may have been at one time that property was a fair measure of wealth," McCIen aghan said. "That time is long past." He said the proposal of Rep. Richard Eymann, D-Mohawk, for a local government income tax to offset part of the prop erty tax was good, but that the legislature probably would not pass it. Haggard said Eymann's proposal should be considered by "people who always are hollering about the federal government increasing power. , Here is their chance to show that local govern ments can take responsibil ity." Both political scientists said the critical needs of educa tion and higher education should not be treated lightly by the legislature. McCIenaghan said he thought the two-year mora torium on new community colleges proposed by the In terim Committee on Educa tion was a good thing. Haggard said that "cheap education can always be had; but I think Oregon will want to continue its present em phasis on quality." And both men said they wished the constitutional re vision proposal could pass, but agreed that it did not stand much of a chance. Haggard said the most im portant revision needed in the Constitution was a change to annual legislative sssions. "It is not fair to ask the legislators to try to project two year ahead," he said. - McCIenaghan said the leg islature will "probably pro pose a series of relatively in nocuous amendments to the voters." Education Another Money Problem By DON ROBINSON or the RegUterGuard "The biennium 1961-63 has been frantic." In these words Oregon Chancellor of Higher Education Roy Lieuallcn concludes his written biennial report to Gov. Mark Hatfield. , That report and others issuing from the chancellor's of-' fice An the third floor of Johnson Hall in Eugene these days reflect two topics ot heavy discussion: That it has been a scramble to operate the college at filch standards under pressure of highcr-than-anticipatcd en rollments during 1061-63. And that the coming biennium from July, 1963, to June, 1965 will require considerable work and money to keep the schools up to the educators' concept of snuff. . ' Most of the talk now is about money. This is budget-making time. The 1963 Legislature that convenes this week will determine what stato funds the State System of Higher Educa tion shall have funds that pay two-thirds of the cost ot run ning Oregon's public colleges. It Is customary for supplicants at the bar of legislative ap propriations to speak of their needs as great But this year the educators seek to distinguish the 1963-65 biennium from the ordinary, to mark it off as a critical time. ;. The reason is that higher education feels it has a double task one to catch up ground lost in the past biennium, the other to meet the rapidly expanding demands in tho next. As brief background. . . . 1961-63 budget was established by the Legislature on predictions that the avcrago enrollment in the state institutions over the two years would be 24,562 .students. , When registration lines had done their work, enrollments were 11 per cent over the prediction in 1961-62 and 16 per ; cent over this year ( 19623). To meet this emergency the State Emergency Board could : put up only $150,000 in extra funds the first year. During 1962 .63 h State Boafd of Higher Education augmented its re sources by raising tuition $30 a year for resident and $60 for non-resident students. There was talk ot limiting enrollments by raising admis sion standards. This was not done and the state board asserts that it has no wish to do so in the future. As one of its form ally adopted objectives the board is committed to "permit a maximum number of Oregon's qualified high school graduates to attend college." - At any rate the state system is now submitting Its request for state funds for the next two years. What are they? And what are they based upon? (The State System of Higher Education is composed of the University of Oregon at Eugene; Oregon State University at Corvallis; University of Oregon Medical School, University of Oregon Dental School, and Portland Stato College, all at Port land; Oregon College of Education at Monmouth; Eastern Ore gon College at La Grande; Southern Oregon Collego at Ash land; Oregon Technical Institute at Klamath Falls; and the General Extension Division. The latter furnishes, through the Institutions, extension and night courses.) (The State Board of Higher Education, which directs the entiro system's operations, is composed of nine citizens ap pointed by the governor. The board's administrative arm is the chancellor's office in Eugene.) Gov. Mark Hatfield this year asked all departments of government to give him their estimates of 1963-65 needs in two parts. First he wanted an idea of money needed to con tinue services at their present level. Second he wantd sug gestions on money to improve the services or to correct de ficiencies. Tho stato board went through a fairly mechanical process in determining its request in the first category. Called the "A" budget, this amount was calculated roughly to maintain the same ratios of dollars to students, teachers to students, and so forth intended by the 1961 Legislature. An important point: The ratios here are based on pre dicted enrollments at the time the 1961-63 budget was set. not actual enrollmens which were higher and diluted the money available. u. Red Schoolhouses 4 You could run a lot of lit tle red shchool houses on the amount of money the State System of Higher Education is requesting for 1963-65. The amounts and their purposes are examined in this first ar ticle in a series of three. The graphs at right help to illus trate this article. The A budget,' to "continue the present level of support" from state funds, totals $91.6 mililon for operation and main tenance. This is 33 per cent greater than the $68.8 million ap propriated in 1961. It is based on a predicted average enroll ment of 33,336 students, some 35.7 per cent above predicted enrollments used by the 1961 legislature. The B budget, for improvements and corrections of de ficiencies, comes to $4.5 million. It covers several requests that would strengthen or add to the college programs such as establishing a master's degree program in teaching at Port land State College (something authorized by the Legislature but prevented by a shortage of funds) and strengthening grad uate study and research in the Willamette valley triangle formed by UO, OSU. and PSC. The combined A and B requests for operation and mainten ance come to $96.1 in state funds. This is $27.2 milion above the amount appropriated this biennium, a 39 per cent increase. Contained in these operation and maintenance requests are one-step salary hikes for system employes. Not contained are adjustments in the salary scale itself. The governor said he would submit state employe pay scale recommendations separately and asked the state board to suggest any changes for higher education. The board did so. It said that to keep Oregon institutions even with their 1957-58 position in relation to other colleges with which they compete for faculty members, salary scale increases of 9.12 per cent in each of the two years would be needed. This would cost $5.5 million. Last time the Legislature gave the faculties a six per cent increase in the last year (1962-63) of the biennium. A second portion of the state system's requests concerns land and buildings. The system saysjthat in the past two years it has amder- WttrtTnt Monty Conns fan mu.im.uiux Where Trie Money G totu,Mi4 nmtuvtiSTiranitrMvuoillO' I I - I 1 67fi N. f 1 iMTuv-cnrM errJif m. 4mp ,1 gone a meticulous analysis of the use made of present build ings compared with desired standards of use. It says it no longer has a cushion of buildings erected ahead of the time they can be fully used. It says that its analysis shows needs for 1963-65 buildings for students who will be on the campuses by or before the fall -of 1966 that will cost an estimated $47.3 million. These are academic buildings such as classrooms, labora tories, libraries, which must be paid from state funds. Last biennium the system receive $9.7 milion for such buildings. With the exception of a science building for Portland Stat and beginning construction of the new campus for OTI, how ever, none of the projects authorized then included classrooms or laboratories. ' The academic building requests have been listed according to priority. The board has indicated that this is a meaningful list, that whatever funds become available will go for the first buildings on the list first Finally, included in the request of the state system is one relating to self-liquidating buildings. These include dormi tories, food service structures, student centers and the like. It is in front of these buildings that the signs read, "No Tax Money." These buildings are financed by bonds that are paid off from non-state funds. Rental fees and charges and other non state monies go to finance this class of building. To take care of the' self-liquidating projects In 1963-65 the system will need to sell some $23.6 million in bonds which, along with current balances, will finance projects worth an estimated $26.1 million. . In order to accomplish that the board is asking the Legis lature not for money but for an increase in the statutory ceiling on the amount of borrowing. The limit now in effect, $34 milion, would need to be raised to $58.4 milion to accom modate the new buildings, $
