Page 15
Illinois Valley News, Cave Junction, Ore. Wednesday, May 27, 2009
Oregon Republicans propose
‘Back to Basics’ budget plan
By SCOTT JORGENSEN
IVN Staff Writer
On Friday, May 15, Ore-
gon state economist Tom
Potiowsky released the most
recent revenue forecast for
the 2009-11 biennium, which
shows a shortfall of $3.5 bil-
lion from the Essential
Budget Level (EBL).
The shortfall is deter-
mined by the co-chairmen of
the Legislature’s budget-
writing Ways & Means Com-
mittee.
The state also is looking
at an immediate shortage of
$351 million to maintain the
current service level for the
current biennium, which runs
through June 30.
District 4 Rep. Dennis
Richardson (R-Central Point),
who sits on the Ways &
Means Committee, said that
the revenue forecast still
paints a bleak picture of the
state’s economy. He said that
the $351 million figure is a
“pretty big hole to have to fill
over the next six weeks.”
“It just shows that reve-
nues are continuing to drop,”
Richardson said.
But in a series of recent
legislative e-mail newsletters,
he raises questions about the
standards used to determine
the appropriate levels of state
government service and
spending.
In his May 8 newsletter,
Richardson points out that,
“Oregon state spending has
increased more than 40 per-
cent in the past decade.” He
states that Oregon’s general
fund & lottery budget for the
2005-07 biennium was $12.4
billion. That figure was raised
to $15.1 billion during the
2007-09 biennium, a 22 per-
cent increase in two years.
“Such an increase of
spending was based on an
overly optimistic revenue
forecast that has failed to ma-
terialize,” Richardson wrote.
“Therefore, the $15.1 billion
figure has now been reduced
by nearly $900 million.”
The starting point for
budget considerations in the
current legislative session
was the Governor’s Recom-
mended Budget (GRB).
However, Richardson cau-
tions that the GRB is a
“policy budget,” rather than
an accurate, workable docu-
ment, and said that Gov. Ku-
longoski “chose not to bal-
ance his GRB to actual fore-
casted revenue levels.”
“In fact, the GRB in-
cluded vastly expanded health
care coverage programs that
would be impossible to im-
plement without multiple
substantial tax increases,”
Richardson wrote. “Therefore
the GRB was not of much
value to this session’s Legis-
lature, and was replaced for
legislative consideration by
what is known as the Essen-
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tial Benefit Level (EBL)
budget.”
The EBL for the 2009-11
biennium is $16.7 billion,
Richardson wrote, which is
up 11 percent from the 2007-
09 budget. But Richardson
said he takes exception to the
figures in the EBL.
“Since that is a proposed
number anyway, you don’t
have any idea where you’re
at, so you can inflate the EBL
and talk about major cuts
when there may or may not
be cuts and they may or may
not be major,” he said.
For example, Richardson
said that the co-chairmen’s
budget contains a 10 percent
cut to the HeadStart program,
yet is still up $1 million from
its current figures.
“So is it a 10 percent cut
or a $1 million increase?” he
asked.
In response to the state’s
continued budgetary woes,
Republicans released their
“Back to Basics” plan just
days prior to the release of the
revenue forecast. Richardson
said that Senate Republicans
spent months examining the
ending balances of various
state agencies and programs,
and based the plan on those
dollars.
“There is $2.9 billion in
reserves that are not constitu-
tionally protected,” Richard-
son said. “Of that amount, at
least $500 million could be
taken without interfering with
any program or causing any
unacceptable deluding of
their resources.”
District 2 Sen. Jason At-
kinson (R-Central Point) said
that the “Back to Basics” plan
makes perfect budgetary
sense.
“What our ‘Back to Ba-
sics’ budget has done is re-
quire agencies, for the first
time, to be 100 percent truth-
ful about how much money
they have,” Atkinson said.
“We’re just asking them to be
very honest. You find out that
the government is not without
money.”
Atkinson said that under
the “Back to Basics” plan,
Grants Pass School Dist. #7
and Three Rivers School Dis-
trict would receive the same
amount of state funding they
received during the 2007-09
biennium.
Richardson said that the
“Back to Basics” budget pro-
posal contains no tax in-
creases, while the co-
chairmen’s budget will re-
quire $800 million in tax
hikes.
“It does contain the larg-
est tax increase in the history
of Oregon, when we have
sufficient reserves to pay
even the budget they’re pro-
posing without additional
burdens on Oregon’s citizens
in the way of tax increases,”
he said. “I don’t know what
their tax plan will be, al-
though they’re expected to
add a 2 percent income tax
surcharge to Oregonians earn-
ing greater than $250,000 per
household.”
Democrats have a super-
majority in the House and
Senate, which means that
they can raise taxes without a
single Republican vote. How-
ever, Richardson said that he
is uncertain if all the Democ-
rats would be willing to sup-
port tax increases.
“The co-chairs are facing
the reality that we have to
have a balanced budget that
works and that has sufficient
votes pass before this legisla-
tive session can end,” he said.
“They’re going to have to
vote count this.”
Richardson said that
components of the “Back to
Basics” plan may end up as
part of a final budget proposal
put together by the co-
chairmen.
“They will deny it pub-
licly, but I expect that much
of what is being suggested in
the Republican plan will be
implemented in the final
budget,” he said. “We did the
work to come up with the
accounts, and they will take
advantage of that when they
find out that they can’t raise
$800 million in new taxes.”
Atkinson said that in-
stead of being an alternative,
he would like to see the
“Back to Basics” plan actu-
ally implemented.
“We’re really trying to
pass this,” Atkinson said. “I’m
hoping to make the drum beat
so loud that they can’t continue
with politics as usual.”
Congress approves
school improvement
funding legislation
Federal legislation is
being advanced that would
provide $6.4 billion
throughout the next five
years to fund capital im-
provements at U.S. schools.
On Thursday, May 14,
Congress passed House
Resolution 2187, the 21st
Century Green High Per-
forming Public Schools Fa-
cilities Act, on a 275-155
vote. Under the bill, the
Three Rivers School District
would receive $1,023,000
for facility improvements
and Grants Pass School
Dist. 7 would receive ap-
proximately $738,000.
Most of Oregon’s Con-
gressional delegation voted
in favor of HR 2187, with
the exception of Rep. Greg
Walden (R-Hood River).
Rep. Peter DeFazio (D-
Springfield) was among
those who supported the
bill.
"This measure will pro-
vide federal grants to help
modernize, renovate, repair,
or improve the energy effi-
ciency of public schools in
Oregon," DeFazio said.
HR 2187 was referred
to the Senate Committee on
Health, Education, Labor
and Pension on Monday,
May 18.
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Kulongoski lays out jobs program
An emergency jobs pro-
gram to help put at least
12,000 unemployed Orego-
nians back to work this sum-
mer was announced in an
address earlier this month to
the City Club of Portland by
Gov. Kulongoski.
At the same time the
governor noted a major state
budget deficit, while explain-
ing that the state also has fi-
nancial significant reserves.
He also noted that the state
likely will decrease its ser-
vices to citizens.
“Oregon state govern-
ment can no longer be all
things to all people,” he said.
He then noted, “President
Roosevelt gave hope to mil-
lions of unemployed Ameri-
cans when he created the Ci-
vilian Conservation Corps
and other jobs programs. We
need to take the same kind of
immediate action in Oregon,”
Kulongoski said.
If approved by the Legis-
lature, jobs under the gover-
nor’s plan would begin July 1
and target unemployed Ore-
gonians seeking a salary
range of $8.40 to $10 per
hour. Currently, there are
80,000 unemployed individu-
als with active profiles with
the Oregon Employment
Dept. who have expressed an
interest in being hired for a
job that pays within this
hourly wage range.
Furthermore, the average
unemployment payment right
now is $250 per week. Under
the governor’s plan, a full-
time job paying $8.40 an hour
would be $336 per week.
The plan, the Oregon
Emergency Jobs Program,
requires legislative approval
for a one-time redirection of
approximately $90 million in
future payments to the state’s
Unemployment Insurance
Trust Fund. The fund cur-
rently amounts to $1.5 billion
and has a dedicated funding
source through regular pay-
ments by employers through
payroll taxes.
“This is not just about
helping out-of-work Orego-
nians put bread on the table.
This is also about restoring
pride and dignity to the hu-
man spirit,” the governor
said. “A job can do that, espe-
cially when the job demands
a skill that benefits the places
we live – and the neighbors
we live near.”
The kinds of jobs created
under the governor’s plan
include restoration of wet-
lands to construction of trails
in parks, improving water-
sheds and removing brush
from fire-prone forests and
adjacent home sites or could
be to help fill a public service
such as delivering food for a
food bank, he said.
The Oregon Food Bank
network has identified more
than 1,000 jobs statewide that
could be added to help fami-
lies in need.
The Dept. of Community
College & Workforce Devel-
opment would administer the
program, dispersing the funds
to nonprofit organizations,
cities, counties and contracted
partners with temporary jobs
that can be filled quickly.
“The Oregon Emergency
Jobs Program – which is de-
signed to start in July because
many of the new jobs can
only be done in the summer –
needs quick action by the
legislature,” the governor
continued. “I know the Legis-
lature, too, wants to create
jobs and hope they will be my
partner so that together we
can put thousands of Orego-
nians back to work. Delay is
not an option.”
The governor also ad-
dressed the May revenue
forecast, which reported that
the state is facing an approxi-
mate $4 billion shortfall for
the 2009-11 biennium.
“A budget of $13 billion
– down from over $17 billion
– isn’t just a new number: It
is a new reality that will re-
quire changing a lot of what
we want to do – in order to
protect what we absolutely
must do,” the governor stated.
“Some government functions
have to go – at least for the
foreseeable future.
Among the potential
changes in what state govern-
ment does, Kulongoski out-
lined possible suspension of
some state agencies, boards
and commissions that in-
clude: The Board of Massage
Therapists, the Board of Oc-
cupational Therapy, the Com-
mission for the Blind, the
Board of Licensed Dietitians,
the Consumer Advisory
Council and the Advocacy
Commissions.
The governor also called
for consolidation of the Avia-
tion Dept. and all the health-
related agencies, boards and
commissions. Consolidation
of the Oregon Student Assis-
tance Commission into the
University System also will
be considered.
"Working with the Legis-
lature, I am working hard to
find the right mix of new
revenue, budget cuts, govern-
mental consolidations, and
suspensions that will produce
a balanced budget for the
2009-2011 biennium,” the
governor claimed.
He also reiterated his
commitment to the priorities
that guided the budget he
released in December, includ-
ing education, health care,
transportation and climate
change.
“I originally proposed
$6.3 billion for K through 12.
That number was based on
last November’s revenue
forecast,” the governor said.
“I want the 2009-2011 budget
to get as close to my original
number as possible – and I
will work with the Legislature
to achieve that objective.”
He continued by pointing
out that while education re-
mains a critical priority of
state government that there
are many priorities to fund
during good times as well as
difficult times.
Said Kulongoski, “The
reality is: Education is not the
only responsibility of state
government. The state must
also look out for our most
vulnerable citizens, keep the
public safe and secure in their
homes and communities, and
protect our pristine environ-
ment.”
He also made another
call to the Legislature to
maintain a significant reserve
fund in the event that reve-
nues continue to decline after
it adjourns. Unlike many
other states, Oregon still has
money in reserves. Currently
the state has approximately
$900 million in federal stimu-
lus funds, and another $900
million in the Rainy Day
Fund & Education Stabiliza-
tion Fund for a total of $1.8
billion in reserves for the
2009-11 biennium.
“The end of this legisla-
tive session is a long way
from the end of the bien-
nium,” said the governor.
“The economy has not
stopped its decline – and we
do not know what a recovery
will look like when the cur-
rent economic decline ends.
“If we don’t hold onto
the reserves, we’re setting
ourselves up for hundreds of
millions of dollars – if not
more – in additional cuts
early next year and no money
put away to cover the losses.
“We’ve seen this movie
before: It’s called five special
sessions in 2002. We do not
want to go there again.”
He ended his address by
announcing his plan to as-
semble a cabinet to examine
all budget mandates the cur-
rently control state spending.
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