Oregon expects $3 billion state budget hit; agencies told to prep possible cuts

'Cutting critical state services will be a last resort,' governor says

PORTLAND, Ore. (KTVZ) -- The business closures and other economic impacts of the COVID-19 pandemic could blow a $3 billion hole in Oregon's current state budget, and that's prompted Gov. Kate Brown to direct agencies to draw up plans for a potential 17 percent reduction in funding.

“One of the many challenging results of the COVID-19 pandemic is the dramatic impact on our economy," Brown said in a statement issued Monday. "With many Oregon businesses restricted or shut down, travel suspended and jobs lost, we expect the revenue that we receive to fund state services will also be significantly reduced.”

“We anticipate a significant budget impact in the state revenue forecast coming on May 20, which will lead to some really difficult decisions," the governor said.

"Our early discussions indicated this impact could be a reduction of $3 billion for the current budget period. We are exploring all available options to weather this recession, and I have directed state agencies to prepare prioritized reduction plans equaling a 17 percent reduction for the upcoming fiscal year as a planning exercise, to explore all options.

"We haven’t made any final decisions, and the agency plans serve as important information gathering at this point. We know a potential cut of this magnitude would be extremely drastic," Brown said.

“Whether the state will need to implement this level of cuts will be dependent on several factors, most importantly the need for additional federal funding to support state services, including our K-12 public school system.

"I will continue to work with Oregon’s congressional delegation in calling for more federal support. I will also work closely with legislative leadership on the best ways to balance the budget. I am committed to doing so in a thoughtful, collaborative manner that explores all tools available.

“While these are uncertain times, one thing is clear: State employees are working many long hours to keep Oregonians safe and secure during this pandemic. In this time of crisis, Oregonians rely on state services more than ever, and cutting critical state services will be a last resort,” Brown concluded.