Governor releases list of potential state budget cuts

SALEM ‹ Governor John Kitzhaber released a long list of cuts to the state∞s general fund budget that could result from a $705 million revenue shortfall and another $125 million in additional program costs resulting from the recession and Oregon∞s highest-in-the-nation unemployment rate.
But he distanced himself from the cut list as soon as he released it, saying øthis level of cuts is neither responsible nor politically possible.Óû

The Oregon AFL-CIO expects to hear another announcement from Kitzhaber this week that will include new budget-balancing options and a state-level economic recovery package that combines new spending for transportation and expanded unemployment insurance benefits for laid-off workers to be presented to a special session of the Legislature in early February.ûûû

In the meantime, the governor∞s list shows how bad the all-cuts approach would be:
 

• $304 million (6 percent) less for K-12 schools, leaving to local school districts the hard choices of larger classes, fewer programs or a shorter school year;
• $38 million (8 percent) less for community colleges, which will threaten college courses, adult education and job training programs and could mean higher tuition charges;
• $84 million (10 percent) less for higher education, with elimination of support for a top-tier engineering school, a 20 percent reduction for research and public service programs (like agricultural extension services, forest research and the University of Oregon∞s Labor Education and Research Center);
• $59 million (6 percent) less for the Oregon Health Plan, which will force the elimination of health insurance subsidies for 6,500 working families and dental benefits for 190,000 adults;
• $113 million (7 percent) less for other human services, which will shut down the Senior Drug Assistance program for an estimated 100,000 senior citizens and eliminate in-home care for 3,500 seniors under Oregon∞s Project Independence; and,
• $103 million (8 percent) less for public safety, delaying the opening of new prisons, cutting 150 Youth Authority beds and eliminating crisis intervention in domestic violence cases.

øThe state budget supports a large part of the safety net for the unemployed and working poor ‹ exactly the services needed when more families are threatened by rising unemployment,Ó the Oregon AFL-CIO said in its Weekly Reports.

øOregon needs to protect those services without sacrificing other priorities like education and public safety. But re-balancing the state budget won∞t be enough if it doesn∞t get the economy moving again,Ó said AFL-CIO President Tim Nesbitt.

That∞s why the Oregon AFL-CIO will be asking Governor Kitzhaber and the Legislature not to limit their agenda in the upcoming special session to quick fixes for the state∞s budget, but to act on a broader range of proposals to pull Oregon out of recession and get laid-off workers back to work.
Here are some of the ideas adopted by the Oregon AFL-CIO Executive Board at its quarterly meeting last month.:

• Hold the state harmless from further revenue losses due to federal tax cuts, which would require the state to disconnect from the Feds on the definition of taxable income and would save the state a further loss of $150-$170 million under one proposal now pending in the U.S. Senate.
• Use all available state reserves, including $120 million in untapped Medicaid funds (now threatened by a pending federal regulation that would take this money back from states like Oregon) and $82 million in unused tobacco settlement funds.
• Follow Washington State∞s lead in raising the tobacco tax and raise beer and wine taxes to the national median, which would raise $131 million to save the Oregon Health Plan.
• Accelerate and increase capital spending on highways and bridges by expanding the state∞s bonding of existing revenues and raising the gas tax by one cent per year in each of the next three years (a proposal also supported by Associated Oregon Industries), which will stimulate the economy, create jobs and improve the state∞s long-term infrastructure and competitiveness.
• Extend state unemployment benefits to more laid-off workers (some 30 percent of whom fail to qualify for benefits because of too little and/or too recent earnings or their status as part-timers).
• Use some of the state∞s $1.7 billion unemployment insurance trust fund to help laid-off workers maintain their health insurance coverage.
• Encourage øBuy OregonÓ programs, Oregon tourism and local investments.
• Expedite the Columbia River channel deepening project.

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