Jackson County Democrats

Without knowing where spending cuts will come, Republicans Richardson and Esquivel keep things vague but paint a bleak budget picture. Neither commits to a position on HB 2009. Governor Kulongoski expects Federal Stimulus Plan to help close the budget gap.

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By Kevin McCormick

Esquivel’s metaphor was actually pretty vivid – state revenue was a sinking curveball thrown by a pitcher, and that several feet before the ball reached the batter was the state’s current revenue situation. The batter – the state legislature – either has to lower its bat (cut spending) to meet the ball or force the pitcher (the state’s revenue sources) to throw the ball a little higher.

Salem will likely have to raise the ball and lower the bat, increasing revenue and cutting spending, according to Southern Oregon’s State Representatives Sal Esquivel and Dennis Richardson, though the legislature has not decided where the cuts will be. The two legislators conducted an economic and budget forum at the Medford Public Library this past Saturday, March 21. They spoke before a mostly-friendly crowd of about 80, taking questions afterward primarily from people who’d come to advocate for a pet issue.

By law, Oregon must have a balanced budget. Richardson said (and the Oregonian reported in February) at the forum that budget deficit projections are growing monthly as revenue projections continue to tend downward, the curve in Esquivel’s analogy. The figure by June (the end of the fiscal year, and the latest money could arrive to solve the current budget crisis) could reach as high as $800 million, the Oregonian reported. According to Richardson government spending has been rising 15% per biennium over the past 20 years, while income has been rising only 12%, creating an unsustainable disparity. Richardson did not include whether that figure was adjusted for inflation.

Though across-the-board cuts are not on the table as a viable option, Richardson – a member of the House Ways and Means committee – said that if everything were cut evenly, 15% cuts would be required to balance the budget.

Richardson added that the state maintains a $390 million Economic Stability Fund and a $339 million Rainy Day Fund, but cautioned that his preference would not be to drain them both. (On this issue, philosophically at least, he agrees with Gov. Kulongoski, who was quoted in the Oregon as saying that he prefers not to spend all of Oregon’s money from the Federal Stimulus Package in this biennium.)

Much of the forum was philosophical in nature. Esquivel and Richardson each criticized the growth in state government and said generally that the government would have to change its operation. “The government has to change the way it does business,” Esquivel said. Richardson agreed with Esquivel, adding that government and agencies needed to be ‘right-sized.’ Neither legislator acknowledged or mentioned that Oregon’s population grew 9.5% from 2000-2007, more than 2% faster than the national average, and has added slightly less than a million people since 1990 (according to the United States Census), which would seem to necessitate a sizeable increase in government spending. When asked about HB 2009, a bill that would expand public health insurance in Oregon if passed, neither took a definite position but Esquivel acknowledged that “our current system is broken.”

Each expressed dismay at several possible cuts, including deep cuts in Drug and Alcohol treatment. Esquivel said that his top issue was education, and that he’d consider it a successful legislative session if they could ‘hold the line’ on public education spending. He added that he’d like to see high schools focus more on trades, and possibly offer a personal finance class. “It’s going to be a bloody surgery,” Richardson said of the proposed spending cuts, adding that the Republican minority has been focusing primarily on economic development.

Neither offered an example of a program or agency they would cut, except for a recent pay raise for several department heads. When asked if the Republican minority intends to offer an alternative plan of which programs they would cut, Richardson responded, “The Republicans have been voted out of leadership.” The Democratic Party holds a 36-24 majority in the Oregon House of Representatives, and an 18-12 majority in the Oregon State Senate.

The Oregonian reported last month that about $550 million of President Obama and Congress’ Federal Stimulus Plan will be available to Oregon before July 1, helping to reduce layoffs and balance the state budget. The money is a portion of a $54 billion portion of the stimulus set aside to help state governments stabilize their budgets. Oregon should see $2-3 billion in stimulus funds over the next several years, which Sen. Ron Wyden (D-Ore.) believes will help to combat the state’s 9% unemployment rate, among the highest in the nation. Wyden noted that $500 million in the package is set aside for forest management, which he believes should immediately boost production and labor hours at mills in the state.

According to the Oregon.gov website, Governor Kulongoski has also signed into law ‘Go Oregon!,’ a state stimulus package of $175 million – funded through the sale of state bonds, and not tax increases or general funds (so it does affect the current deficit) – designed to quickly increase renovation and construction on public buildings, which the Governor’s office believes will create jobs in the construction sector and ‘prime the pump’ of the economy.

(This article uses information from an article originally published in The Oregonian, by Harry Esteve. It is here: http://www.oregonlive.com/politics/index.ssf/2009/02/oregon_could_spend_federal_mon.html)