Oregon state budget

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Oregon faced a $3.8 billion biennium FY 2010-11 budget deficit, relying heavily on new taxes and federal stimulus money to close the gap in the final budget signed by Gov. Ted Kulongoski and passed by the Oregon Legislature.^[1][2] In Aug. 2010, however, the state budget deficit has grown bigger than previously estimated and could top $1 billion.^[3]

Oregon will receive approximately $209 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[4] The extra federal funds won't solve the budget shortfall problem and more cuts are likely, the governor warned in his letter to legislative leadership and in another letter to state school superintendents.^[3]

According to reports the "all funds budget" was $51.2 billion in 2007-09 and increased to $55.9 billion in 2009-11, a 9 percent increase. However, the "general fund" decreased from $15.1 billion for 2007-09 to $14.2 billion in 2009-11.^[5]

See also: The Oregon State Budget on State Budget Solutions

[edit] Next Budget Cycle FY2012

In the next two-year budget cycle starting in July 2011, state officials predict a gap of at least between projected tax collections and services of $2.5 billion. That is true even if state aid to public schools remains constant at $6 billion — and tax collections and lottery proceeds go up to around $16 billion.^[6]

A memo by the Department of Administrative Services, which oversees budget and management for the governor, and the Legislative Fiscal Office, which analyzes budget issues for lawmakers stated the assumption that labor costs will go up by 13.4 percent in the two-year cycle.^[6] The memo bases that finding on the following:

• An end to unpaid furloughs by state employees, who are scheduled to take 10 to 14 days off for savings during the current budget cycle.
• A resumption of step increases, based on longevity
• Cost-of-living increases estimated at 2.5 percent in the first year (2011-12) and 2 percent in the second year (2012-13).
• Increases of 9 percent annually in health-insurance premiums for the 2011 and 2012 calendar years.
• An increase of 6 percentage points in the state contribution to the Public Employees Retirement System.
• A continuation of payments on $2 billion of pension-obligation bonds, which voters approved in 2003 as part of a legislative overhaul of the public-pension system.^[6]

[edit] State Budget FY2010-11

When the state budget deficit grew to possibly $1 billion in Aug. 2010, Gov. Kulongoski asked Democratic legislative leaders to "come to an agreement" to resolve the shortfall and indicated that he does not favor using dollars from reserve savings accounts to close the ever-widening gap.^[3] The governor warned agency directors about the growing budget hole and suggests the governor could once again order across-the-board budget cuts.^[3] The warning comes days after Congress approved extra federal funds for states, with Oregon receiving $118 million for education and $144 million for Medicaid.^[3] That extra federal money, however, is insufficient to solve the state's budget deficit and therefore cuts are necessary.^[3] At the end of August, state revenues are down $373 million from earlier estimates.^[7] When passed, the FY2010-11 budget was $14.2 billion.^[7]

In addition to the 9% cuts previously ordered, state agencies to submit plans to cut an additional 8% for the remaining 9 months of the budget - from Oct. 2010 through June 2011.^[8] Schools, however, will remain untouched as lawmakers plan to rely on the $118 in federal funds and $34 million from the $100 million in the state education reserve, which Kulongski has consented to using after initially resisting.^[8] Some agencies altered their budgets to avoid cuts, such as the Department of Agriculture's decision to cover some of the $400,000 it will lose from its general fund operating budget as a result of lower state revenue projections with fees.^[7]

The state's Legislative Emergency Board consists of 20 members who decide budget matters between sessions, which it has done in this biennium.^[9]

On May 27, 2010, the Governor responded to shortfalls in 2009 tax collections by ordering 9 percent cuts across the board in state budgets, which he said he would outline at a speech on June 25, 2010.^[10] The budget also did not include cost of living pay increases for state employees.^[6]

Figures released by the Oregon House Republicans show the Oregon Legislature's FY 2010-11 biennial budget had $1.6 billion in new taxes and fees and uses $1.258 billion in one-time federal stimulus money for a $52.9 billion total funds budget (two-years) 9.3% larger than the previous budget. ^[11]

The state found out it would receive $270 million in federal aid in August 2010, and $117 million of it is for education, which can be spent only to retain or hire teachers. While the state education department estimated the increased funding could spare the jobs of 1,600 teachers, uncertainty about the state budget prevents administrators from moving quickly. "There's only one thing worse and harder than cutting staff positions, and that's adding them back and then cutting them again," said Randy Schild, superintendent of the Tillamook School District, Oregon.^[12]

[edit] Budget Background

Oregon's budget covers two fiscal years (a biennium). This means it runs from July 1 of an odd-numbered year to June 30 of the next odd-numbered year. The current fiscal period is from July 1, 2009 to June 30, 2011. The budget development process has three major phases: Agency Request, Governor’s Recommended and Legislatively Adopted.^[13]

Agency Request Budget Agencies start the budget early in even-numbered years to develop their Agency Request Budget. This lays out agency finances and policies for consideration by the Governor. The Budget and Management Division (BAM) gives agencies guidelines to use in this process. Agencies send their budget request to BAM by September 1.^[14]

Governor's Recommended Budget The Governor and BAM review the budget request. They use the Governor’s priorities, budget policies and current law to make budget decisions. The Governor’s Recommended Budget document summarizes those decisions. It gives data on all the state’s revenues and expenditures. It also gives information on each agency’s budget. The Department of Revenue puts together a Tax Expenditure Report that is published at the same time. The Tax Expenditure Report outlines the various reductions available to residents for the income tax.^[15]

Legislatively Adopted Budget The Governor presents the Recommended Budget to the Legislature when it meets at the start of the next calendar year (January of 2009, during the 2009-11 biennium). Legislative committees review the proposed budget. They hold public hearings to hear from each agency and the public. Each budget bill has a Budget Report that presents the committee recommendations. The Legislature votes on each budget bill. The budget bills that are enacted into law make up the Legislatively Adopted Budget. Agencies carry out, or execute, the budget over the two year budget period. The Emergency Board can make some changes to the budget between legislative sessions. Special sessions may also be called to deal with budget issues. The Legislatively Adopted Budget and the changes to it make up the Legislatively Approved Budget.^[16]

The Oregon State Legislature convenes every two years in regular session on the second Monday in January during odd-numbered years, a date set by statute. Oregon Constitution does not specify a limitation on session length, however most sessions last approximately six months. During the interim, legislators serve on interim committees and task forces that study issues likely to be faced during the next legislative session.^[17]

Under a 1951 law, the governor possesses the authority to cut spending proportionately from the tax-supported general fund to avert a deficit.^[8]

[edit] Budget figures

General Fund^[18]

The following table provides a history of Oregon's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Oregon state budget (2008-2009) for more information.

[edit] Appropriations

Some of the state's appropriations for 2007-2009 are listed below:

[edit] Accounting Principles

Main article: Oregon government accounting principles

The Oregon Audits Division is the only independent auditing organization in the state with the authority to review programs of agencies in all three branches of state government and other organizations receiving state money. Authority for the responsibilities of the Audits Division is found in sections 297.010 through 297.990 of the Oregon Revised Statutes. Their audit reports are published online in a user-friendly, searchable format. The Division of Audits was established in 1929 by the state legislature to carry out the duties of the Secretary of State as the constitutional Auditor of Public Accounts. Gary Blackmer is the Director of the Audits Division under Oregon Secretary of State Kate Brown. Kate Brown was elected Secretary of State in 2008.^[21]

The Institute for Truth in Accounting (IFTA) rates Oregon “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Oregon's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[22] Oregon's CAFRs are annual publications of the Oregon Statewide Accounting and Reporting Services (SARS), State Controller's Division, Department of Administrative Services. The State Controller’s Division is responsible for statewide financial accounting, financial reporting, and administration of the statewide accounting system for state government. It prepares the Statewide Comprehensive Annual Financial Report (CAFR); administers statewide central disbursements; and provides professional fiscal guidance, training, and consultation to state agencies. John Radford has been Oregon's State Controller since his appointment by the Governor in 1989.^[23]

[edit] Budget transparency

Oregon currently has no statewide, official spending database online. However in February, a group of 27 legislators said they are sponsoring a bill, the "Open Books Oregon Project," that would require the state to create a searchable website by Jan. 1, 2010, listing revenue and expenditures for all state agencies.^[25]

• On June 27, 2009 the Oregon state senate unanimously passed House Bill 2500 which will lead to the creation of a website that tracks state spending. On June 30, 2009 the bill was unanimously adopted by the House and will now move to the Governor’s Desk. The non-partisan bill was written by State Representatives on both sides of the aisle, including: Arnie Roblan, Jefferson Smith, Kim Thatcher, and Gene Whisnant. The passing of HB 2500 marks the largest step towards government transparency in Oregon history.^[26]
• Oregon House Bill 2500 called for the creation of Oregon Transparency: Get to know the state's budget website was created.^[27] The measure required the Department of Administrative Services to create the site containing information about state agency revenues, expenditures, contracting, human resources and other data. The website developed and maintained by the Oregon Department of Administrative Services.^[27]

[edit] Government tools

The state has budget information on its transparency website.^[28]

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

See also: Evaluation of Oregon state website

[edit] Public employee salary information

The Statesmen Journal has a database of state employee salary information available here.

[edit] Economic Stimulus Transparency

• Of the stimulus funds approved by Congress in Augusut 2010, Oregon received $118 million to schools and $143 million to Medicaid.^[8]

• Oregon received an estimated $1,686,263,846 from the American Recovery and Reinvestment Plan of 2009.^[29]

• The economic recovery website to show how legislators and government officials in Oregon are spending Federal funds is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[30][31]

According to the ARRP website, Oregon’s Congressional Districts almost tripled from 5 to 14, including a non-existent District 00, which took home nearly $3.4 million in stimulus funds. The website shows that $4,932,024 went to fictional districts to create/sustain 15.1 jobs.^[32]

[edit] See Also

Oregon taxpayer-funded lobbying

[edit] External links

• State Budget Solutions, Oregon
• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Cascade Policy Institute
• Oregon Budget and Management Division
• Oregon State Legislature, Budget and Taxation

[edit] Additional Reading

[edit] References

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	v • d • e State of Oregon Salem (capital)
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