Lawmakers: Oregon budget deficits could get worse

SALEM, Ore. (AP) – A bipartisan group of Oregon lawmakers examining the state government’s budget problems says the current $1.6 billion deficit is due to short-term and more rooted causes, and unless they are addressed, budget deficits in the future will be even greater.

The group, composed of the Legislature’s co-chairs of the Joint Committee On Ways and Means, described in a report Friday a structural imbalance between existing revenue streams and the growing costs of providing programs and services to Oregonians.

The group urged action now to contain the growing costs of state government, including a hiring freeze for non-essential positions for the 2017-19 biennium; withholding standard inflationary increases for services and supplies, and increasing current and future employees’ share in retirement costs for all public employees who belong to the Public Employees Retirement System.

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The report on “cost containment” prompted a flurry of news releases, including:

House Speaker Tina Kotek Responds to Report from Cost-Containment Work Group

Bipartisan, Bicameral Work Group Today Released a List of Long-Term Cost-Containment Ideas and Principles

Note to Editors: Oregon is facing a $1.6 billion budget deficit for the 2017-19 biennium. In February, Senate President Peter Courtney (D – Salem) and House Speaker Tina Kotek (D – North Portland) brought together bipartisan, bicameral work groups to develop ideas about how to address Oregon’s long-term, structural budget challenges.

The groups have been meeting weekly for two months, and today a work group comprised of five legislators presented ideas about long-term cost-containment ideas and principles. [See memo outlining actions to curb future budget growth here .] In the coming weeks, members of the other bipartisan, bicameral work group that has been discussing revenue reform ideas is expected to present as well.

Speaker Kotek released the following statement in response to the report from the Cost-Containment Work Group:

“Coming into this legislative session, the Senate President and I saw a tough road ahead. Fixing the current budget deficit is hard on its own, and future budgets reveal an even bleaker picture. We knew that finding a path to stabilize our budget for the long-term would likely become the biggest challenge we had ever faced.

“We had reason to be hopeful, though. Following the defeat of Measure 97, Oregonians of all political stripes expressed a desire to fix the budget so we could finally invest in the things Oregonians care about: good schools, good jobs, and a more stable future.

“So we decided to help start two conversations we believed would be critical to the success of a legislative effort.

“First, we asked representatives of the business community and labor unions to start meeting. Our goal was to help them rebuild trust, with the hope that they could generate ideas and help support the difficult budget negotiations that lay ahead. They are still meeting.

“Second, we asked legislators from both parties, in both chambers, to start discussing two key questions: how can the state reduce costs to stabilize our investments in the long-term; and how can we reform our revenue system to better align with Oregonians’ priorities?

” Today , we heard reports from two groups, one on long-term cost-containment ideas and principles, and the other on ways to utilize our public safety dollars more effectively. Soon, we will hear from legislators discussing the revenue side of the equation.

“After years of underfunding our schools and critical services, it’s not enough to cobble together a budget that merely avoids the worst cuts for a couple of years. It’s not enough to retreat back to our corners and lob the same political attacks. We need real cost-containment, real revenue reform, and real statesmanship to do right by the people who elected us to wrestle with these difficult issues.”

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Statement from House Republican Leader Mike McLane on Cost Containment Hearing and Path to Balanced Budget

Statement by House Republican Leader Mike McLane:

“Recently, Speaker Kotek and President Courtney asked the leaders of the Ways and Means Committee to gather ideas on how the state government might reduce costs. Today , the Ways and Means subcommittee on Capital Construction discussed some of those ideas, which included ways to improve how our government operates and save money in the process.

“While House Republicans have questions about the implementation and durability of these ideas, they nonetheless represent an encouraging starting point in a broader conversation. The bottom line is that Oregon’s state government must have structural spending reform to meet our commitments in the long term. The escalation of the costs of PERS obligations and state spending have put Oregon’s state government in a huge hole during a time of record tax revenues.

“Ultimately, balancing the budget over the next decade will require a far more comprehensive effort than what was discussed today in the Ways and Means subcommittee.

“House Republicans believe this effort should consist of: 1) Development of a clear strategy for maintaining economic growth over the next decade. This requires agreement on a target economic growth rate and increasing good-paying jobs, and a commitment to conform state policy to that end. 2) Delivery of structural spending reforms that result in significant savings in the long term. 3) Targeted investments in career and technical education and workforce development programs that both support economic growth and fulfill the objectives of our voters. This may require additional tax revenues, but those revenues must be targeted to support those investments.

“Only when lawmakers and the governor commit to these three steps – in that order – will Oregon’s state government be on the path to a more stable financial future.”

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Oregon Student Association:

We are tired of the budget being made on the backs of students

Students can no longer take on the burden of student loan debt.

The cost containment proposal will be released by the Legislature today. The cost containment proposal is a list of funding cuts that will impact many services Oregonians need.

“We push students out who can barely afford education. How does this help our economy by making it even harder for young people to become educated workers?”

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Oregon Nurses Association:

ONA STATEMENT ON LEGISLATIVE COST CONTAINMENT PROPOSAL

TUALATIN, Ore. – Today the Oregon State Legislature released its cost containment proposals which outline devastating cuts to many state programs and thousands of hard-working Oregonians. As an organization which represents more than 14,000 registered nurses, advanced practice nurses and nursing students across the state, the Oregon Nurses Association (ONA) is deeply disappointed that a plan to meaningfully invest in the health and future of Oregonians is absent from this proposal.

Although the state needs to do everything in its power to spend state dollars most effectively, cuts alone cannot fill the $1.6 billion budget deficit Oregon is facing. Only through meaningful investments can the expanded Medicaid population of 350,000 Oregonians maintain their health care coverage and can we sustain and strengthen vital public health and safety programs.

“The problems Oregon faces call for long-term solutions. We ask the Legislature to use every tool available–including raising corporate taxes–to make meaningful investments in education, health care and services for all Oregonians,” said ONA Executive Director, Susan King, RN, MS, CEN, FAAN.

ONA also calls on the larger business community to come to the table to work on a proposal to strengthen our economy and state services through investments and avoid drastic cuts to already dwindling services.

Oregon’s patients, families and communities can’t endure additional cuts to health care and services. Oregonians have done their part, now the Legislature and the business community need to present real and innovative solutions for Oregon’s budget crisis.

-Candalynn Johnson

Students are drowning in debt and getting price out of education. The Oregon Student Association rejects any cuts to higher education while Oregon ranks 50th in the nation in corporate taxes. With a legislative cost containment proposal now on the table, the business community must step up and fulfill their promise to work toward a real revenue solution. We know that when students have access to higher education, our economy is more robust and our state is stronger. But we can only get there with new investments. We are tired of the budget being made on the backs of students

The Oregon Student Association (OSA) is a statewide, student-led advocacy and organizing non-profit which was established in 1975 to represent, serve, and protect the collective interests of students in postsecondary education in Oregon.

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Family Forward Oregon:

The proposed budget cuts and cost containment plans released this week by the Legislature put critical services for women and families at risk and will undermine the basic self-sufficiency programs designed to lift families out of poverty. Simply put: either proposal is balancing the budget on the backs of Oregon women.

Oregon’s economy is stronger than it has been in years and our unemployment rate is at an all time low, yet too many families are still struggling to make ends meet — particularly mothers. In Oregon, 60 percent of minimum wage workers are women and 23 percent of families with children are headed by a single mother. These are the women and families who can least afford to lose the critical services they depend on for stable housing, health care, child care, food security and so much more.

The majority of state workers are women, and they are also more highly concentrated in many of the programs that would experience reductions. They are our teachers, our homecare workers, our social workers. Cuts to family support services or reductions in staffing will mean fewer women who can provide economic stability for their own families. Cuts to these state worker’s wages and benefits, including retirement, will mean more economic insecurity and more women aging into poverty later in life.

This is happening despite the fact that corporations in Oregon still pay the lowest tax rate in the country. Cuts to critical safety net programs or reductions in employment opportunities in women-dominated industries will have both near-term impacts for many Oregon families and decades-long consequences.

“In times of economic growth, we should be increasing our investments in valuable programs like health care, child care services, senior services and education”, said Andrea Paluso, Executive Director of Family Forward Oregon. “We should be growing these programs so more families have a chance to achieve and sustain economic stability. We should be investing in our children and their futures with increased spending on education and other critical supports. That we would make these cuts at a time of economic growth and increasing prosperity for the corporations doing business in Oregon is unconscionable.”