STATE
MyEagleNews.com
State economists: Oregon budget has a $3 billion gap
said when a special legislative session
might occur. Kotek, in a video confer-
ence Tuesday, May 19, sponsored by
the Portland Business Alliance, said
lawmakers still need to assess other
sources of aid stemming from the $3
trillion CARES Act.
She did say that a session is likely
before August, and that lawmakers
cannot put off action until their next
regular session starts Jan. 11.
By Peter Wong
Oregon Capital Bureau
Gov. Kate Brown says federal aid
must go hand in hand with spending
cuts to offset almost $3 billion that
state tax collections and other sources
will be short.
Brown made her statement Wednes-
day after state economists told law-
makers that the COVID-19 coronavirus
pandemic has resulted in an unprece-
dented economic downturn from shut-
downs in business activity and public
life.
Oregon’s unemployment rate
jumped from a modern low of 3.5% in
March to a modern high of 14.2% in
April. Oregon’s state general fund bud-
get draws more than 90% of its money
from personal and corporate income
taxes. The combined general fund and
lottery budget for the 2019-21 cycle is
about $23.7 billion, and virtually all
of the potential spending cuts of $2.7
billion will fall within the second year
starting July 1.
“The steepness of this decline is
unprecedented,” State Economist Mark
McMullen said during a video confer-
ence of the House and Senate revenue
committees.
While he and Senior Economist
Josh Lehner said they expected a
quick economic recovery when busi-
ness activity resumes — as early as the
second half of 2020, and an “all clear”
by mid-2021 — “it takes a full year or
more before pain is realized.”
They also projected that state cof-
fers will get less than originally fore-
cast in the following two budget cycles.
Oregon did get $1.4 billion as its share
of $150 billion in federal aid from the
recent CARES Act, although $415 mil-
lion is tentatively earmarked for local
and tribal governments other than Port-
land, Multnomah County and Wash-
ington County.
Brown said: “Make no mistake, the
budget gap created by this pandemic is
too large to bridge without additional
congressional action. I am thankful for
the work of our congressional delega-
tion to secure federal funding for Ore-
gon in the relief packages Congress
has passed so far. But those funds only
address a fraction of our current need,
especially since we are not permitted to
use the funding we have received so far
to address state budget shortfalls.
“As a state, we took action to shut-
ter our economy in order to save lives
in the middle of a once-in-a-century
crisis. Now it’s time for Congress and
the president to step up and provide
Other sources
Bulletin file photo
The Oregon Capitol in Salem.
once-in-a-century support for import-
ant state services, including schools,
health care, and public safety.”
More federal aid uncertain
The Democratic-led U.S. House
passed a $3 trillion aid bill on May 15
with $500 billion for states and $375
billion for local governments. But the
Republican majority in the U.S. Senate
has balked at the price tag, and Presi-
dent Donald Trump has taken a wait-
and-see stance, so more aid for states
does not appear to be imminent.
Brown has received agency plans
she ordered earlier this month for $3
billion in spending cuts, amounting to
17% of their general fund support start-
ing July 1. But no one expects those
cuts to pass the Legislature. Brown has
the authority to cut spending across the
board, but only lawmakers can approve
selected cuts.
Brown also could impose a hir-
ing freeze — although she has said
more workers have been needed at the
Employment Department and other
agencies affected by the pandemic
and the downturn — or employee
furloughs.
“The latest forecast for state reve-
nue makes it clear that we have tough
choices ahead,” she said in her state-
ment Wednesday. “We will need to
tighten our belts. I am working with
legislative leaders to preserve criti-
cal state services, find efficiencies, and
prepare for potential budget cuts.”
But neither she, Senate President
Peter Courtney of Salem nor House
Speaker Tina Kotek of Portland have
Lawmakers were told that the state
has $1.6 billion in its two main reserve
funds — one generated by lottery pro-
ceeds for education, the other from
income taxes for general programs
— plus $1 billion in ending balances
that lawmakers could tap. The reserve
funds have had a chance to grow since
the most recent downturn a decade
ago, but lawmakers are barred from
using all of the money in a single bud-
get cycle.
The forecast by state economists
also projects a 23% decline ($364 mil-
lion) in Oregon Lottery proceeds, the
lion’s share of which is generated by
video machines — which are mostly in
restaurants, bars and taverns that have
been shuttered since March 16. Lot-
tery proceeds go to economic devel-
opment and education, but voters have
earmarked shares for an education sta-
bility fund, parks and watersheds, vet-
erans’ programs and outdoor schools.
Lawmakers also have used lottery pro-
ceeds to repay bonds.
A new corporate activity tax, pro-
ceeds from which are earmarked for
school improvement and other pro-
grams, is projected to generate 25%
less ($414 million) than originally
forecast. The tax took effect at the start
of this year. Business coalitions have
urged Brown and lawmakers to sus-
pend the tax, which essentially is on
gross Oregon receipts for all but the
smallest businesses. Brown directed
the Oregon Department of Revenue to
waive penalties for late filings for busi-
nesses making good-faith efforts to
pay, and allow the smallest businesses
to pay in 2021.
McMullen said the pandemic-in-
duced downturn has resulted in $9 mil-
lion more than projected in marijuana
taxes — but even they will decline
slightly over the next few years.
Most of that money is earmarked,
so it does not go into general state
services.
“We’re trending high in marijuana
sales,” he said. “But even those taxes
are not immune to the downturn.”
Wednesday, May 27, 2020
A9
Bentz wins GOP primary
for Congress; Spenser
leading Democrats
By Gary A. Warner
Oregon Capital Bureau
Former Sen. Cliff Bentz of
Ontario won the Republican
nomination for the 2nd Con-
gressional District in Oregon on
Tuesday.
Former Rep. Knute Bue-
hler of Bend called Bentz just
before 9:30 p.m. to concede
the race. Former Sen. Jason
Atkinson of Central Point was
running third. Jimmy Crump-
acker, a recent transplant
to Deschutes County who
spent over $600,000 and was
endorsed by anti-abortion and
gun rights groups, was running
fourth. None of the other seven
candidates on the Republican
ballot had more than 10% of
the vote.
Alex Spenser of Klamath
Falls and Nick Heurtz of Cen-
tral Point were ahead in the
field of five Democrats vying
for the seat.
In Grant County, Bentz
received 55% of the votes, fol-
lowed by Buehler with 20%
and Crumpacker with 15%.
Bentz thanked the voters of
the district, who he said looked
past the large amounts of adver-
tising by Buehler and Crump-
acker to give him the win.
“I think people in this con-
gressional district are smart,
and they study the candidates
before they vote,” Bentz said.
“Jimmy is a nice guy, but he
doesn’t really live in the dis-
trict. He’s a Portland guy with a
ski cabin in Bend. Good on him
for trying, but he has to know
the district before running for
Congress.
“Knute ran as a moderate
two years ago when he was
running for governor, then
tried to run as a conservative
for Congress. People remem-
ber. Knute is a good physician,
but politically, he just doesn’t
fit this district.”
The race drew 11 Repub-
licans to replace Rep. Greg
Walden, R-Hood River, who
announced last fall that he
would retire
after 22 years
in Congress.
The district is
the only one of
five in Oregon
represented in
Cliff Bentz
Congress by a
Republican. It
covers all of Eastern and Cen-
tral Oregon, along with a large
slice of the southwestern part of
the state.
Bentz announced early for
the race, with much of the geog-
raphy of his state senate district
overlapping Walden’s.
Buehler entered the race,
bringing his statewide name
recognition and fundraising
ability into the contest. The
physician served two terms in
the state House sandwiched
between unsuccessful bids for
secretary of state in 2012 and
governor in 2018.
Buehler praised Bentz,
and said he would support his
campaign to win the seat in
November.
“Cliff is a good man and a
strong legislator,” Buehler said
in a statement. “His deep roots
in CD2 will serve us all well in
Congress.”
A late entry that stirred the
campaign was Crumpacker, an
asset manager, who registered
to vote in Deschutes County
on Nov. 20, three weeks after
Walden announced he would
retire, according to Oregon Pub-
lic Broadcasting.
The district has proved reli-
ably Republican for the past two
decades, with Walden some-
times receiving more than 70%
of the vote during his re-elec-
tion campaigns. His closest
race came in 2018, when Jamie
McLeod-Skinner of Terrebonne
held him to 56% of the vote.
Spenser began the race as
campaign manager for Demo-
crat Raz Mason of The Dalles,
who eventually withdrew her
candidacy. Spenser then filed to
run for the office herself. Heu-
rtz described himself as an inde-
pendent businessman.
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