State political and education leaders are anxiously awaiting today’s announcement of Gov. John Kitzhaber’s plan to alleviate the state of Oregon’s $850 million budget shortfall.
Kitzhaber said he would like to use this plan only as a roadmap to re-balance the state’s budget, and would rather attempt to raise money for the state than further cut existing state programs. Such revenue could come from spending tobacco settlement money or raising income taxes, he said.
“I don’t believe you can responsibly cut $800 million from the budget and still have a state that any of us want to live in,” he told a group at the Downtown Athletic Club in Eugene on Thursday.
Kitzhaber had traveled to Eugene to prepare local civic, business and education leaders for the seriousness of the state’s budget woes. After today’s announcement, Kitzhaber says, he expects to hear from leaders with their suggestions. “This is not just the legislature’s problem; this is our problem,” he said. “We all own it; we are all going to live with its consequences.”
The state legislature will convene a special session in early February to begin legislative action on balancing the budget.
Kitzhaber said he would like to deliver his official budget proposals before then ­ but only after hearing from leaders around the state.
“The budget was a tight budget before we started; $850 million more and it becomes an impossible budget,” said State Rep. Phil Barnhart, D-Eugene. “The cuts that we are talking about will probably affect the University of Oregon, big time.”
In October, the state economist reported an $850 million shortfall to the state’s operating budget of $11.4 billion. The shortfall stems from incorrect revenue predictions, which did not account for a poorly operating economy and the highest unemployment rates in the country.
After that announcement, Kitzhaber ordered all state-funded institutions to develop plans to pare budgets by 2 to 10 percent, in 2 percent increments. The University of Oregon designed cuts that could fall between $2 and $12 million, and the State Board of Higher Education — which oversees the state’s eight public schools in Oregon — created a plan to cut money from their budgets.
During the meeting in downtown Eugene, Kitzhaber said he would like to keep cuts away from primary and secondary education, social services and police protection. However, these programs make up a considerable portion of the state’s budget.
Local education leaders felt the governor’s priorities and economic realities may not bode well for state universities and community colleges.
“Post-12 education was not in one of the hot priorities, so that gives us a clue what he was thinking about community colleges and universities,” said Mary Spilde, president of Lane Community College.
Oregon has serious structural financial problems on top of a short-term budget deficit, Kitzhaber said. These problems include the passage of Measure 5 in 1991, which capped the amount of property tax that can go to pay for education. Because of this cap, the state must pick up the rest of the tab. And, the State of Oregon’s kicker check system did not allow the government to set up a “rainy-day fund” in times of economic problems.
“The recession has revealed that our cupboards are bare,” he said.
Kitzhaber stressed to the business leaders that decisions made in the next few months could greatly influence the future of the state.
“The real question is what is happening to those kids, and whether we are giving them the kind of educational opportunity that we had and we want the future leaders of Oregon to have,” he said.