Oregon faces $700 million budget gap next year
SALEM, Ore. — More painful state budget cuts are in store next year as the lethargic economic recovery fails to keep pace with the growth in costs for state services.
A quarterly revenue forecast delivered to state lawmakers Tuesday projects that the Oregon general fund and lottery will be nearly $700 million short of maintaining government services at their already-slimmed down level for another two years.
Still, the deficit is far less ominous than the $3.5 billion gap that lawmakers filled in 2011.
"It's not party time, but it's far less challenging than what we experienced last biennium," Sen. Ginny Burdick, a Portland Democrat who chairs the Senate Finance and Revenue Committee, said of the latest revenue forecast.
Republicans warned Democrats not to increase spending too quickly.
"While there appears to be some growth, there is tremendous pressure building to increase spending next session, which will only continue the cycle of painful cuts and chronic revenue shortfalls," said Republican Vice-Chair of the Senate Revenue Committee Chris Telfer. "It is a tired drumbeat by now, but putting Oregonians back to work is the best and only long term solution to these anemic revenue forecasts."
For the two-year budget cycle that begins July 1, economists project Oregon will collect $16.5 billion in taxes. That's more than the $15 billion the state is expected to collect by the end of the current budget cycle, but it's not enough to keep pace with the $17.2 billion cost of continuing all services at their current levels. The spike in costs is driven by rising health care costs, expanded caseloads for government assistance and rising personnel costs, among many other factors.
The new Legislature, with Democratic majorities in the House and Senate, will take office Jan. 14, but lawmakers won't begin their actual work until February.
"The upcoming session will require a lot of difficult choices, and careful prioritization of the things that matter most," said Rep. Val Hoyle of Eugene, the incoming Democratic leader in the House.
"The signs are positive. The housing market continues to recover. The unemployment rate is coming down. We continue to see growth in our economy and our forecasts continue to be in the back," said Senate President Peter Courtney, a Salem Democrat.
A dose of good news in Tuesday's economic report: Oregon's manufacturing and housing sectors are showing signs of life, and economists expect the recovery to accelerate after the beginning of the 2013. Large businesses and profitable and are sitting on piles of cash they can spend to expand once they feel comfortable doing it, said Mark McMullen, the state economist.
Uncertainty around looming federal tax hikes and deep spending cuts is a drag on growth in the short term, he said.
We're in debt? That means, according to the Socialist Democrat Obama, that wejust need to spend more. It must be those evil rich people again. Let's tax businesses (and anyone who is still working) more! Oregonians, I'm fed up with you. You voted Obama back in knowing full well the insane economic policies that he stands for. You asked for it and now you have it.
How about having our government stop spending on a projected income and start spending on a cash on hand income? I could project the income that I would like, but it doesn't even come close to what I will get.
Just a thought. Come January 1, end any and all state, county and city programs that cater to illegal immigrants. Remove any incentive for them to remain in the state. This should save about $500 mil or so per year.
I wish I could run MY budget like the government.
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If somehow I could force my employer to pay me more (knowing full well I'm going to squander it on non-essentials and hit him up for more), he'd find a way to fire me.
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Sadly, the bosses of these yoyos don't have the stones (or intelligence) to fire anyone so blatantly incompetent.
@Conspirator my wife is one of those "yoyo." Works 70 hours a week, on salary, makes about $50K. Bachelors in business and psychology, 4.0, earned entirely on scholarship. The complexity of what they're facing is mind blowing. There are over 75 foreign languages served by the David Douglas school district now, for example. Worse is that in hard economic times people get meaner and more desperate. Unscrupulous people seeking to obtain or preserve a job will lie, cheat, steal and, more importantly, sue. My wife spends a lot of time having to investigate ridiculously nonsensical lawsuits that will cost taxpayers out the ear regardless of whether she wins or loses. You can just fire bad employees anymore because no matter how broke they are, they always seem to be able to afford a lawyer.
Should be "you cannot" fire bad employees.
How is is possible to have a budget deficit....... we were promised #66 & #67 were supposed to fix everything.
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What? your telling me raising taxes during a recession didn't raise the expected money.... no kidding
  Right you are, Kramer!  The fools!
Boy, it sure was a wise move on the part of Oregonians to elect one of the states biggest spendthrifts in the history of our state to close some pretty big budget gaps........ NOT
Case in point, the good Dr. ReRun is still pushing for big time spending on green energy when we shouldn't be spending a dime on it until our budget is balanced.
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excuses are like buttholes. how about learning to spend the money WISELY. I know its hard.
@LostSoul it is hard because more people are using the services who don't pay for them, and more people are suing the state when they don't get what they want. Do you remember the original Red Dawn? The Soviet Union didn't invade our schools and communities in parachutes from war planes. They arrived on United Airlines and stand in my yard every morning waiting for the school bus we pay for even though our daughter goes to private school and can't use the bus.
The people who should feel the cuts first should be the prisoners. Beans and rice, no tv and they have to perform community service work like park service. Then cut the amount of legislators in half and cut all their pay in half. Make state employee wages begin at $9 with a $25 maximum. Cut the state vehicle fleet in half and cut the amount of travel in half. Pass a law that in the future, if any personnel need to be cut that the first people cut will be legislators, before any teachers or public safety personnel. And any legislator who tries to increase spending will be immediately fired and stripped of their retirement benefits and charged with dereliction of duty and sent to prison to eat beans and rice.
Lets raise taxes again on businesses and see how many will flock to Oregon to help us out of the economic trouble we have put ourselves in. Maybe we could drive all businesses out and be totally dependent on the government for all jobs. Or maybe we workers should just quit our jobs and go on food stamps and welfare with free medical care and cellphones. Oh, If we did that who would be left to pay the bills from our politicians that can't seem to control their spending or from the takers that just keep demanding more benefits that the workers are paying for?
It is always easy to raise taxes on someone else, but as you all can see it does come back to bite you in the but at some point. Nothing is free!
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Continue raising taxes on the 1%, legalize/tax cannabis, problem solved. Let's get it done.
Notice for every election we have the ones in office only work 3 and a 1/4 out of four years. what a cushy job! they spend January not working then the 3rd year they spend all their time on the road trying to get voters to vote for them for the next 4 years. then they get all those days off and they travel all over the world on our dime on "business" for the government like Hawaii to inspect the air and naval basses wink wink.
It's the cost of being a sanctuary for all the 'downtrodden' of the world, and providing food, shelter, education, and legal aid for them. Congratulations, Oregon, you've just become a 3rd world country. So if much of the budget is going to deal with the immigrants, where's the money coming from to keep supporting those 'entitled' PERS retirees? Coming soon to YOUR neighborhood-a tax hike!
the toll and cost of ILLEGAL immigrants is catastrophic. Factor in what these folks cause in justice, healthcare, education and overall needs and you'll see they have caused the US to go bankrupt. Our days are numbered.
We did it to ourselves. We let it happen..
@Justsomeguy  """We did it to ourselves. We let it happen.."""""
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Well, just over half of the state keeps doing it to all of us.Â
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I find it rather ironic that the libs who pride themselves on looking out for the poor keep electing leadership that maintains our unemployment rate higher than the national average.
@Justsomeguy ......absolutely right. It was our own politically correct stupidity. And sadly somehow it continues.
How did they come up with the $17.2 billion figure to fund everything at current levels? I think the last budget was around $14 billion. If costs went up to $17.2 billion for current levels that would be about a 23% increase in two years. Seems a bit much, with inflation averaging 1.5 to 3.0%.  Something seems askew to me.
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Time for Oregon to leave the "previous baseline" budgeting behind, and go to "zero-based" budgeting.
I love watching government scramble for money. It will get worse in the coming years.
"...lethargic economic recovery fails to keep pace with the growth in costs for state services."
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Misleading statement! Â Truth would be '...government spending continues to increase beyond tax revenues during sluggish economy."
How can this be?
I thought democrats have been in charge for decades?
Maybe we can fix it by putting even more dems in office.
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There are many budget cuts I could come up with. Of course they wouldn't be politically correct, but what better way to help save money than making sure that burglars and thieves actually stay in prison; a prison where the comforts aren't more than they would have had on the outside? And how about not going round and round in courts with prisoners convicted of murder. I have no exact amounts it takes to keep a prisoner in "country club" settings, but some day enough will be enough, and those convicted of heinous crimes will be eradicated after conviction with one appeak. and a governor who actually follows the law. I wonder how many folks out there would commit crimes if the sentence were not one where there were more personal benefits after being convicted than they ever had prior to doing the crime. What a sad state of affairs there is nowadays! Â
@jpk I agree....who says prisoners need "time in the yard". It requires very little manpower to keep prisoners in soletary confinement 24/7 with their daily oatmeal/pb&j/rice&beans meals.
Hmmmm..........and where are they going to find that $700 million? I'd bet my next paycheck they'll take it from the schools or public safety, or both!
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Why not start by taking it from the politicians salaries, starting at the top with Kitzhaber? Next take it away from non-essential services and our bloated government agencies.
 @scoreboard Most politicians are millionaires now a days so why not make their salary $1.00 a year and use the money to run the country instead. Just the position should be grand enough for them.
 @32jim2 You'd think plus we all know that they get millions under the table in kickbacks from corporations.
Why does this not surprise me? I mean really.
You wonder how the politicians can waste so much money, then over the radio I hear a O.D.O.T. commercial featuring 'Sam the safety cone', this commercial sounds as though it's aimed at 2yr olds. It's constant BS spending of our tax dollars on cra p like this that runs us out of money.
 @last boyscout My uncle was the #2 man at ODOT for many, many years - he refused to be #1 because of the hypocrisy that went on in Salem, and still does. Uncle John does not like me at all since I had to call in a favor way back when in order to save lives - the money magically re-appeared in ODOT's safety fund after it mysteriously disappeared under Uncle John...Â
I learned pretty early on that the Donkey Mantra was 'Tax and Spend' and since I now live out-of-state Uncle John is hell-bent on taxing my ORYGUN pension.  I guess all those years of paying 9% was not enough as they kept squandering it away on pet projects. The ensuing lawsuits will cost OR taxpayers millions, but Uncle John could care less about that...Â
 @boned yes you should pay income tax on that pension coming from oregon funds. It is insane that the state ever let people skate by and go out of state to avoid paying income tax on the payments. This is a given. Since you are already retired, you are part of the problem this state is facing and should be ashamed of yourself and your greed.
 @SR Oh, and I forgot that you folks in ORYGUN can run down and get free medical, optical, dental and Rx insurance while I continue to pay for mine. Uncle John is trying to turn ORYGUN into a true Socialist state that I am already paying for on a much grander scale so do not try to sell me sad story, OK??
 @Playanekes  @boned  @SR his pension that is no doubt more than what he made while working and continues to go up consistently..My statement goes against union pensions so I'm not sure how that is donkey like. I vote both sides though, only sheep vote solely based on the party they mostly associate with. Only the poor get free medical services as far as I know. You pay fed taxes..cry me a river too boned. You should be paying oregon income taxes on that pension and not trying to cheat the system by leaving the state after helping to suck it dry of funds.
@boned @SR so what you're saying is that you could get free health care too, but you simply choose not to live here while you draw your pension in order to get it. Cry me a river.
 @SR What less could I have expected from a Donkey? All those years of paying much more than my fair share of taxes only to be squandered away by folks like you. Actually, it is folks like you that are the biggest problem and with my snout in the trough I continue to pay federal taxes to support Uncle John and many fools like you...
@boned @SR why do you assume he's squandering your money, or that he's a "Donkey." I'm a self-employed property-owning native of Oregon. "Pension." LOL. What is "much more than your fair share?" What nonsensical slander do I have in store for me if I state -my- opinion?
put it on our grandchildren's tab
For 27 or more years the crybaby democrats have been running Oregon, and these clowns still have NOT figured out how to budget the states finances. Idiots, you can't spend what you don't have. Cut the BS spending. Start with your wages, PERS and follow with light rail, bicycle paths, etc...
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 @last boyscout Did you miss the period 1994-2006 when Democrats ran the legislature? And it is the legislature, not the Governor, who pass the budget and spend the money.
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Remember the Karen Minnis solution for the shortfall in 2002? ("Borrow Money!!!")
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How about we cut the $3.7 Billion in Corporate welfare in the current budget?
 @last boyscout ...and git off my lawn!!!
 @darren vandervort Not such a  common name. I did some work for a guy with that last name. He did some camera work for an old cartoon show. Good guy.
 @darren vandervort I'll hold back his first name for his own privacy, but I can say he's got one beautiful green Studebaker.
 @last boyscout What was his first name?
No sweat, Democrats will always find money for bills, especially their favorite budget items. If not, they'll just print more! LOL
@jpk  Unlike the Federal government, Oregon does NOT print its own money. It must either raise taxes or borrow money.
Good grief, I know that! I was being sarcastic!
Gee and we just re-elected a guy who has never had a real job let alone created one as president...what the hell were the voters thinking...
@FreedomRocks They were like "I wan my obamafoe"
 @ChipClip  @FreedomRocks They all be 'vulnables' and I had to say goodbye to an old friend that actually believed I owed her money since I do OK and she does not...
 @iamtroglodite Yea, we go back 45 years as best friends and now that she had her hours cut and needs to pay for her cell, satellite and expenses I need to help her out. It is my fault for sending her money to get her car fixed, but she believes the gubmint and I need to do more to help her...
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