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Governor Charles H. Martin's Administration

Governor's Message, 1937

Source: State of Oregon MESSAGE Of GOVERNOR CHARLES H. MARTIN To the Thirty-ninth Legislative Assembly of Oregon January 11,1937

To the Honorable President and Members of the Senate, and to the Honorable Speaker and Members of the House of Representatives of the 39th Legislative Assembly:

I welcome you to the 39th Legislative Session, and come before you to make a report on my stewardship for the past biennium. I wish to express to you my eagerness to cooperate in solving the current problems confronting the state government in the best interest of all the citizens of this great state.

Oregon has come through the depression years with flying colors. As you know, the deficit of $1,304,290.31 which faced the state at the beginning of my administration has been converted into a surplus of approximately $200,000. This is the first time since 1925 that the state deficit has been eliminated.

Bonded indebtedness of the state has been reduced to $49,108,010, the lowest in 15 years. Out of this total approximately $46,800,000 is represented by the outstanding obligations of the Oregon State Highway Commission and the World War Veterans’ State Aid Commission. Both issues are self-liquidating and will be retired on schedule unless adverse action is taken.

The entire bonded debt of the state can be eliminated under the present program of retirement by 1960, provided no new bonds or obligations are incurred in the meantime.

For the first time in history, the state of Oregon will remove the property tax from real and personal property, except for the portion of the levy outside of the constitutional 6 % limitation, of which more than one-half is for the elementary school fund which is not properly a state tax in that it is collected and distributed solely within the counties. The tax levy for strictly state purposes for this year is 1.15 mills as compared with 2.86 mills in 1936. This represents a reduction of more than $1,500,000. Due to excellent administration by the World War Veterans’ State Aid Commission, the 0.5 mill levy for that commission has been waived for this year.

The state has done its part in lifting the load fro the real property taxpayers in accordance with my avowed program. This has been accomplished through a constructive program of economy which has measured actual needs and demands of the state governmental agencies and provided therefore, within reason, instead of an arbitrary and unsound cutting. This has been effected through the system of budgetary control which was authorized at my request by the 38th Legislative Assembly. It demonstrates anew the wisdom of sound business correlation of governmental activities.

It is essential that the tax load be not increased at this time. Then, the people of this state may all the more enjoy the full benefit of the economic recovery and the new era of prosperity upon which we are entering as result of the great developments taking place in Oregon. I refer particularly to the Bonneville Dam and the Willamette valley projects. I am sure you will agree with me that it is sound public policy to make the cost of government as little as possible commensurate with adequate service for the benefit of the entire population.

Oregon has weathered the recent depression, and now is in the most favored position in the Pacific Coast area. Unlike neighboring states, Oregon has no deficit and no warrant indebtedness. She has substantially reduced the tax load of her citizens. She is reducing her bonded indebtedness by sound economic retirement.

This means the people of Oregon can use their money for constructive purposes, including fuller development of the varied and rich resources with which nature has so abundantly endowed this state. The future is not heavily mortgaged for things used or consumed in the past.

As I have said, Oregon rode the storm of the economic depression on an even keel. It would be the part of wisdom not to rock the boat now and thereby risk losing the preferential and favored position we hold and can enjoy.

In the November, 1936, election, the people spoke in no uncertain terms relative to constitutional and statutory changes in our governmental structure and operation. The “no” vote was emphatic. It clearly indicates that, in so far as major legislation is concerned, they desire no fundamental changes. We, as servants of the people, should observe that mandate and impose no unnecessary legislation.

I have submitted to you the state budget for the 1937-38 biennium as my recommendation for legislative enactment to insure efficient and economical operation of the state government for that period. It is a program designed to encompass the growing needs for state participation in various activities that properly come under its purview. It is predicated on the need for providing the necessary and essential services within the revenue available. It contains, as you will note, an item of $430,991.98 for contingencies and unforeseen demands that may arise during this legislative session. It is, in fact, a balanced budget; with estimated expenditures balanced completely against estimated revenue.

Deviations from this budget which will in any way exceed the totals thereof will either jeopardize the financial standing of the state or require legislative enactment to create new revenue sources. To impair Oregon’s financial standing is unthinkable; to impose further burdens upon our already overloaded taxpayers would be deplorable.

Preparation of this budget was complicated by the fact that, fro the first time in the history of the state, revenues measured by income have offset the taxation base on real property under the 6% limitation constitutional amendment. This offset has provided no new revenues and under the tax laws cannot provide for additional revenue until revenue from measured income also has offset state property taxes outside of the 6% limitation. In short, this means there is no additional source of revenue from an income tax of any kind. It also means that there is no additional money.

The tax structure of the state has demonstrated its soundness by this new phase, for it is lifting the load of taxation from the owners of property, especially the owners of small farms and city homes. I have a special regard for the owners of small farms and homes, for the rich owners can take care of themselves. I construe the November 1936, mandate of the people to mean the tax structure should not be altered or materially changed. It would be wise, I think, for all of us—as servants of the people—to heed that mandate also.

Much has been said recently about the conflict between human and property rights. Let me call your attention to the fact that human and property rights are not in conflict, but are complementary. Each contributes to the other. I implore you not to be led astray by the deceitful, false, and misleading shibboleths of demagogues who maliciously try to create economic, social and political chaos. The sole purpose of these birds who prey on the body politic is to create confusion wherein they may attain their own nefarious and selfish ends at the expense of the general public. I warn you against them, especially because they so often speak in a manner that simulates righteous indignation about sincerity.

Our American system is firmly based on the premise that we exist as a classless nation except as to individual ability to serve the community and our fellow men. We must not tolerate any activity which tends to divide the people of the nation or of this state into classes that appear hostile to each other. We must not be misled by plausible but designed arguments into enacting laws that will further the work of these destructive demagogues. We must act on behalf of, and in the interests of all of the people of the estate of Oregon, and not the organized minorities. We must combat these sinister influences with vigor and sincerity.

We must recognize that property rights exist as the result of human endeavor and activity, that without the human element property has no meaning. We must however, guard against the undue influence of the willful power of concentrated money against human rights and human enjoyment. We must set and steer a sound and sensible course that will keep us from disaster on the rocks of soppy sentimentality, and the equally dangerous reef of the greedy, vicious, vested interests opposed to the common good. We must exert our efforts to see that money is made to perform its proper function—that of serving men, instead of becoming their master.

My friends, in closing, let us dedicate ourselves to the proposition that this legislative session shall be noted for its actions and policies adopted for the good of all the people of this state as distinguished from ill-conceived measures for the benefit of small and selfishly organized groups. Let us give ourselves wholeheartedly to serving this great state so its marvelous potentialities can be developed to the maximum as quickly as possible.

Oregon Secretary of State • 136 State Capitol • Salem, OR 97310-0722

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