(
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, $