Budget looms in Salem
With money tight, there’s no lack of ideas on the best path through the downturn
By Erin Golden
Bend Bulletin
Monday, January 12, 2009
Oregon lawmakers will report to the Capitol today to begin a session filled with tough choices.
After a year that brought budget cuts, inflation and dropping employment levels across the state, lawmakers said they want to move forward on issues ranging from transportation to education, but they all agree the budget will be at the heart of most discussions during the 2009 session.
Democrats again hold a majority of the seats in both the House and the Senate. Leaders of the party have already unveiled plans for new transportation, health care, public safety and other programs that would be at least partially funded by tax and fee increases — plans that have some Republicans speaking out in opposition.
Legislators on both sides of the aisle, however, said there will be no shortage of work as they try to keep state services running, at a time when a slowing economy is forcing more Oregonians to look to the state for help.
“It is going to be a tough decision-making session, and it’s going to be a busy session,” said Rep. John Huffman, R-The Dalles, whose district includes Jefferson County and part of Deschutes County. “I haven’t heard anybody talking about a lack of bills being introduced.”
Creating a budget
Most of the bills being drafted by lawmakers from around the state are still being researched and rewritten. And much of the work being done now might have to be readjusted in about two months, after the state releases an updated economic forecast.
But leaders from both parties — and Democratic Gov. Ted Kulongoski — have already outlined their big-picture plans for the session, which will likely last about six months.
Two years ago, the last Legislature approved a budget that included approximately $15 billion for the general fund. Lawmakers later approved the creation of a $340 million rainy day fund from the suspension of corporate tax rebates due under the state’s kicker law — money the new Legislature could use if needed.
The state is expected to have a general fund budget of about $16.1 billion in 2009-11. Because of increased income tax collections, that number is about $1 billion more in revenue than the state will collect in the current budget cycle — but officials have said it likely won’t be enough of a jump to avoid any cuts because of the rise in Oregonians needing government help.
In December, the governor released a $15.8 billion budget plan that calls for reductions in some social services, including community mental health and drug treatment programs, but protects most funding for education.
The budget also includes proposed tax hikes, including raising the gas tax by 2 cents per gallon, increasing cigarette taxes by 60 cents and upping the $10 corporate minimum tax.
Democrats say tax and fee increases are necessary because more people are now turning to the state for help; the governor has said caseloads in the Department of Human Services are expected to go up by 28 percent in the next year.
“We’re going in and dealing with a very challenging budget situation and making thoughtful choices that are not going to be easy,” said House Speaker-elect Dave Hunt, D-Gladstone.
Republicans, however, say Oregonians are already struggling with unemployment and rising prices on everything from groceries to their gas bills and don’t have any wiggle room left for higher taxes and fees.
Sen. Doug Whitsett, R-Kla-math Falls, whose district includes Crook County, said he believes the solution should be more about reducing spending, rather than asking residents to pay more through taxes.
“As a small businessman, I know that when you get into economic hard times, you have to make some hard choices,” he said. “Sometimes you have to lay people off you don’t want to lay off, but you have to say, ‘OK, what is our core function here?’ That’s the sort of thing we’re going to have to go after.”
With a Democratic majority in both the House and the Senate, Republicans said they know they’ll face an uphill battle in any argument about new taxes.
“I think with the governor out proposing higher taxation and fee increases, with the Senate president out proposing bond funding and infrastructure projects through borrowing … and given their numbers, we will see if (the Democrats) have restraint or if a further tax burden becomes their priority,” said House Minority Leader Bruce Hanna, R-Roseburg.
Local priorities
Central Oregon lawmakers have a long list of bills they’d like to see introduced this session.
Rep. Gene Whisnant, R-Sunriver, said he’s working on several items ranging from an expansion of employment benefits for veterans to a bill that would add noxious weed removal to local adopt-a-highway programs.
Sen. Chris Telfer, R-Bend, is putting together a plan that would bring pilot programs for health care to rural communities, among other bills.
And Rep. Judy Stiegler, D-Bend, said she’s drafting several bills, including one that would help better define cyber-bullying as a crime under state law.
Stiegler, who will serve on the House education budget subcommittee for Ways and Means, said she’ll be looking to protect the budget for K-12 schools and for colleges and universities, including Central Oregon Community College and Bend’s Oregon State University-Cascades Campus.
Rep. George Gilman, R-Medford, whose district includes Crook County and portions of Deschutes County, wrote in an e-mail that he’s interested in funding more local transportation projects and wants to remove the ethanol-blending mandate passed in the last legislative session.
Gilman said he believes food prices went up because the ethanol is made from corn, rather than a blended formula referred to as cellulosic ethanol, which can be made from wood waste products that are more available in Oregon.
“When we passed the legislation, we were assured that cellulosic ethanol would be available within a year,” he wrote. “Two years have passed, and to my knowledge, we do not have an economically feasible production facility in operation.”
Other local issues that came up in the last session, including a plan that would block development in the Metolius Basin, are likely to crop up again this year.
Former Sen. Ben Westlund, who is now state treasurer, was the sponsor of an unsuccessful plan to stop resorts from moving into the Metolius area in 2007.
Difficult decisions
Over the next few months, Central Oregon legislators will weigh in with their colleagues from across the state on a variety of other issues.
Transportation will likely be a major focus of the session; in November, Kulongoski introduced a $500 million plan that would boost local projects with money from a gas tax hike and an increase in vehicle registration fees.
Telfer, who will serve on the Senate Finance and Revenue Committee, said infrastructure improvements, including transportation work, is one area that people aren’t ready to give up on, even when times are tough.
“We have got to address our infrastructure needs, no question about it,” she said.
Public safety measures are also top priorities for lawmakers from both parties. Incoming House Majority Leader Mary Nolan, D-Portland, said legislators are working on bills that would ban dangerous toys, tighten metal theft laws, help protect consumers from fraud and update the state’s emergency plans.
Nolan, Stiegler and other lawmakers, however, said some plans will likely have to be altered if the economy continues to slow down.
“It’s going to be a real challenging session, but where there’s challenge, there’s opportunity, too,” Stiegler said. “It would be silly for us to say that there’s any one thing that’s safe — I think we have to look at everything, not just programs, but how we approach things, how we do things. Just because we’ve done something that way for 50 years doesn’t mean that’s the best way to do it.”