From the Associated Press: Oregon Revenue Forecast & Budget Cuts
By BRAD CAIN Associated Press Writer
SALEM, Ore. (AP) _ Oregon state government is facing an immediate $140
million shortfall that is prompting Gov. Ted Kulongoski to order
across-the-board cuts in state agency spending.
That development Wednesday comes in the wake of the state's new revenue
forecast that also predicts the state will be more than $800 million
short of the amount needed to maintain current services through 2011.
State Economist Tom Potiowsky delivered the grim news to lawmakers
Wednesday, saying that Oregon's economy could well get worse in the
coming months before any recovery begins.
In response, Kulongoski used his executive authority to order agencies
to make cuts that will translate to about 1.2 percent of each agency's
current two-year budget.
Because there are only six months left in the current budget, the cut
will be closer to 5 percent of what each agency has to spend,
Kulongoski's office said.
"This recession demands tough decisions and requires shared sacrifice
— and today's action is the first of many difficult decisions that
lie ahead," Kulongoski said in a statement.
Potiowsky issued his quarterly revenue forecast only a few days after
the release of what he called a "horrible" state jobless report. It
showed that Oregon's unemployment rate soared to 7.3 percent last month,
well above the national average of 6.5 percent.
He said Oregon's economy is in the same downward spiral as the rest of
the nation, with home prices falling, thousands of Oregonians losing
their jobs and consumers "missing in action," and not spending on
anything beyond the essentials.
On Dec. 1, Kulongoski is to release his proposed 2009-11 budget that
will have to take into account sharply reduced revenue available for the
next two years.
That could translate to less money for schools, universities, human
services, state police and other state services when the 2009
Legislature convenes in January.
"Families are hurting, businesses are hurting and our communities are
hurting," Kulongoski said in a press release. "The reductions I'm
ordering today will have an impact on us all, but my hope is that it
will help us gain some stability for the current budget so we can focus
on targeting our investments in the next budget that get Oregonians back
to work and invest in our children's future through health care and
education."
Senate President Peter Courtney (D-Salem) said members of the
legislature need to "roll up their sleeves and begin finding ways to
close these budget gaps."
"We can't just tax our way out of it and we can't just cut our way out
of it," he said.
Courtney added that his priorities will continue to be protecting vital
services like education, public safety and the human services safety net
of things like food stamps, aid to needy families and healthcare for
children. He will also strongly advocate in favor of a bold program of
bond-funded construction projects that will create jobs while repairing
the state's deteriorating infrastructure.
House Republicans issued this statement in reaction to the news:
SALEM, Ore. - In light of a $762 million revenue shortfall for the
2009-11 biennium, House Republicans today called for sustainable and
prioritized spending in the next budget. The caucus also called for tax
reforms to promote capital investment and to provide tax relief for
lower-income Oregonians and working families.
"Spending in 2007 was unsustainable, and now the Legislature is facing
difficult decisions in 2009," said House Republican Leader Bruce Hanna
(R-Roseburg). "It is time to bring government spending back under
control, and to pass measures to keep dollars flowing through our
economy and to keep capital within our state."
Rep. Vicki Berger (R-Salem), Vice-Chair of the House Revenue Committee,
said the Legislature can't continue to increase spending and
taxpayer-obligated debt. She said Legislature must pass tax reforms to
help working families and lower-income Oregonians, and prioritize
spending to protect schools, public safety and health care for
vulnerable Oregonians.
"The state can't afford to dig a larger fiscal hole," Rep. Berger said.
"It is time to focus on sustaining the programs and services most
important to Oregonians, and passing pro-growth and pro-family tax
reforms that would put more dollars back into our economy."
Earlier this year, House Republicans announced legislation to double
the state's child tax credit and make Oregon's income tax fairer for
lower-income workers. The caucus will also introduce legislation to
reform Oregon's capital gains tax rates, among the highest in the
nation, to promote capital investments in businesses and workers.
"Rather than finding new ways to extract more money from Oregonians, we
will work to put more money back into their pockets and back into the
economy," Rep. Hanna said. "The Legislature must create a better
environment for businesses that helps them succeed and create jobs."
SALEM, Ore. (AP) _ Oregon state government is facing an immediate $140
million shortfall that is prompting Gov. Ted Kulongoski to order
across-the-board cuts in state agency spending.
That development Wednesday comes in the wake of the state's new revenue
forecast that also predicts the state will be more than $800 million
short of the amount needed to maintain current services through 2011.
State Economist Tom Potiowsky delivered the grim news to lawmakers
Wednesday, saying that Oregon's economy could well get worse in the
coming months before any recovery begins.
In response, Kulongoski used his executive authority to order agencies
to make cuts that will translate to about 1.2 percent of each agency's
current two-year budget.
Because there are only six months left in the current budget, the cut
will be closer to 5 percent of what each agency has to spend,
Kulongoski's office said.
"This recession demands tough decisions and requires shared sacrifice
— and today's action is the first of many difficult decisions that
lie ahead," Kulongoski said in a statement.
Potiowsky issued his quarterly revenue forecast only a few days after
the release of what he called a "horrible" state jobless report. It
showed that Oregon's unemployment rate soared to 7.3 percent last month,
well above the national average of 6.5 percent.
He said Oregon's economy is in the same downward spiral as the rest of
the nation, with home prices falling, thousands of Oregonians losing
their jobs and consumers "missing in action," and not spending on
anything beyond the essentials.
On Dec. 1, Kulongoski is to release his proposed 2009-11 budget that
will have to take into account sharply reduced revenue available for the
next two years.
That could translate to less money for schools, universities, human
services, state police and other state services when the 2009
Legislature convenes in January.
"Families are hurting, businesses are hurting and our communities are
hurting," Kulongoski said in a press release. "The reductions I'm
ordering today will have an impact on us all, but my hope is that it
will help us gain some stability for the current budget so we can focus
on targeting our investments in the next budget that get Oregonians back
to work and invest in our children's future through health care and
education."
Senate President Peter Courtney (D-Salem) said members of the
legislature need to "roll up their sleeves and begin finding ways to
close these budget gaps."
"We can't just tax our way out of it and we can't just cut our way out
of it," he said.
Courtney added that his priorities will continue to be protecting vital
services like education, public safety and the human services safety net
of things like food stamps, aid to needy families and healthcare for
children. He will also strongly advocate in favor of a bold program of
bond-funded construction projects that will create jobs while repairing
the state's deteriorating infrastructure.
House Republicans issued this statement in reaction to the news:
SALEM, Ore. - In light of a $762 million revenue shortfall for the
2009-11 biennium, House Republicans today called for sustainable and
prioritized spending in the next budget. The caucus also called for tax
reforms to promote capital investment and to provide tax relief for
lower-income Oregonians and working families.
"Spending in 2007 was unsustainable, and now the Legislature is facing
difficult decisions in 2009," said House Republican Leader Bruce Hanna
(R-Roseburg). "It is time to bring government spending back under
control, and to pass measures to keep dollars flowing through our
economy and to keep capital within our state."
Rep. Vicki Berger (R-Salem), Vice-Chair of the House Revenue Committee,
said the Legislature can't continue to increase spending and
taxpayer-obligated debt. She said Legislature must pass tax reforms to
help working families and lower-income Oregonians, and prioritize
spending to protect schools, public safety and health care for
vulnerable Oregonians.
"The state can't afford to dig a larger fiscal hole," Rep. Berger said.
"It is time to focus on sustaining the programs and services most
important to Oregonians, and passing pro-growth and pro-family tax
reforms that would put more dollars back into our economy."
Earlier this year, House Republicans announced legislation to double
the state's child tax credit and make Oregon's income tax fairer for
lower-income workers. The caucus will also introduce legislation to
reform Oregon's capital gains tax rates, among the highest in the
nation, to promote capital investments in businesses and workers.
"Rather than finding new ways to extract more money from Oregonians, we
will work to put more money back into their pockets and back into the
economy," Rep. Hanna said. "The Legislature must create a better
environment for businesses that helps them succeed and create jobs."