Oregon lawmakers this week outlined a plan to close the $800 million gap in the state’s 2007-2009 biennial budget.
The plan was proposed by the Legislative Assembly’s Ways and Means Committee co-chairs, Rep. Peter Buckley, D-Ashland and Sen. Margaret Carter, D-Portland. It relies on $360 million of cuts in education and other programs, $330 million of federal economic stimulus aid, and $126 million of interfund transfers and fund balance spending.
“No one is happy with the depth of the cuts we are still required to make to balance the budget,” Buckley said. “But the infusion of federal stimulus dollars cushions the blow of our economic crisis, much like the state’s ending fund balance has done for the last 12 months.”
The plan would preserve the state’s $734 million in rainy-day and education stability funds because that money will be needed in future years of the recession, the two Democrats said. Oregon faces an estimated $2.2 billion budget gap in the upcoming biennium.
Republicans, who are a minority in both houses of the legislature, called the plan a “raid” on special funds that cuts the school year by five days but makes little in the way of cuts to the state bureaucracy.
“Republicans support withdrawing a portion of the education stability fund and matching those dollars to reserve funds and administrative savings that are currently being utilized by school districts across the state,” the GOP leaders of the House and Senate said in a joint news release. They also called for the government to save $350 million by withdrawing pay increases given to state workers last year.
In a related matter, Oregon lawmakers last week passed a measure that would amend the state tax code to prevent the tax-law changes in the recently passed federal stimulus package from reducing corporate and individual tax liability owed to the state.
Senate Republican leader Ted Ferrioli called the measure a $96 million tax increase and a “job-killer.” Democrats called it a technical change in the tax code to “protect the state’s right to determine its own tax policy” and prevent an unintended consequence of the federal stimulus, which they say aimed to help states, not create bigger deficits.
