State budget estimate: We’re in a jam
By Nick Budnick / The Bulletin Published: April 04. 2009 4:00AM PST
Tentative figures for 2009-11
General fund budget to maintain existing services
$4.4B
Legislature’s prediction for general fund shortfall
Budget shortfall if all reserve funds are used
A few possible cuts
3
20%
At the root of the new development is the worsening economic situation and a projected decline in personal and corporate income taxes.
A formal announcement won’t come until later this month, but the tentative estimate is that the state’s next general fund budget will total $12.7 billion, about $4.4 billion less than what’s necessary to pay for existing state services.
On Friday, the heads of the Joint Ways and Means Committee posted cuts on a new Web site to show what 30 percent cuts to agencies could look like and announced that a series of hearings would be held around the state, including in Bend on April 29.
Sen. Margaret Carter, D-Portland, said the potential cuts serve “as a reality check, the reality that Oregon is facing a great challenge. … It’s going to be very, very important that the people of Oregon help us to prioritize.”
The possible cuts include:
•Reduction and elimination of services for the poor, elderly, disabled and mentally ill.
•Layoffs of 100 state troopers.
•Closing courts as much as three days a week.
•Cutting the school year by 20 percent, or nearly two months.
•Repeal of last year’s Measure 57 tough-sentencing law.
•Closing 10 prisons, including Deer Ridge Correctional Institution in Madras.
Carter’s co-chairman on the committee, Rep. Peter Buckley, D-Ashland, said that overall, the average cut to state agencies would likely be closer to 15 to 18 percent range, thanks to $911 million in federal stimulus dollars and other reserves, including the state’s rainy day fund.
But some agencies would likely be spared the worst of it, meaning deeper cuts would have to be made to others, he said, saying closing schools early “scares the hell out of me.”
That said, he and Carter acknowledged that the budget deficit could grow even larger than the current $4.4 billion estimate.
Besides making cuts, lawmakers are considering raising revenue using new fees, increased cigarette, beer and corporate taxes along with a temporary income-tax surcharge on top-earning Oregonians.
Local officials are bracing themselves for potential reductions in state funding filtering down to counties and schools.
Bend-La Pine Superintendent Ron Wilkinson said that in “the best-case scenario we’re working with, we’ve got to cut quite a bit of money next year.”
In a worst-case scenario, “If you’re cutting one third of the budget, that could represent 20 percent or a quarter of the school year,” he said. “It would be devastating.”
Hillary Saraceno, the executive director of the Deschutes County Commission on Children and Families, receives more than $1 million to distribute to programs for parenting skills, runaway and homeless youth, and children at risk of abuse and neglect. At the upper level of possible cuts, “some programs would probably go away,” she said.
Ron Paradis, a spokesman for Central Oregon Community College, said that at a 30 percent level of cuts, “We’re likely talking $10 to $15 per year per credit tuition increases or cutting as much as 10 percent of courses each year,” he said.
As for the potential effect on plans to expand Deer Ridge, the Department of Corrections listed delaying adding new inmates to the prison as among its first options to be considered, saving about $23 million.
Complete closure of the prison would save another $42 million. However, that option was listed as a last resort, only to be considered if 30 percent cuts were made to the department’s budget.
“We’re like the other nine institutions, waiting to see what the Legislature has to say about how deep they have to go with their cuts,” said Parrish Van Wert, the community development coordinator for Deer Ridge.
Local lawmakers say the release of the potential cuts is an effort to make the best of a bad situation.
“It’s pretty drastic stuff,” said Rep. Judy Stiegler, D-Bend. “I think this is the kind of thing that people need to look at and mull and think, ‘Gee, is this the way we’re going to go?’”
Rep. John Huffman, R-The Dalles, said that while he approves of the way Democrats are publicizing the decisions to be made, he thinks the state needs to do more to trim salaries and payrolls: “As of yet, I haven’t seen anything out of leadership that gets into removing certain departments and programs. I think that’s the level that we need to get to.”
The final schedule of budget meetings, times and locations is expected to be posted next week.
For more details on the potential cuts, see www.leg.state.or.us/budget/.
Bulletin reporters Sheila G. Miller , Hillary Borrud and Lauren Dake contributed to this story.
Nick Budnick can be reached at 503-566-2839 or at nbudnick@bendbulletin.com.