The Governor’s June revenue forecast predicted a shortfall of nearly $600 million in the General Fund for the current two year state budgets. That amount is equal to about a four percent General Fund shortfall for the entire budget cycle.
However, that entire $600 million shortfall now must be focused on only the second year of the two year budget cycle. That is necessary because the Governor’s original revenue prediction was wrong, and because virtually every dime of the predicted revenue, as well as most of the state’s reserves, were scheduled to be spent. Since the state agencies overspent by about four and a half percent in the first year, they must cut back nine percent in the second year in order to balance their budgets. The same mistakes were made during the last budget cycle, but apparently, no one learned from the previous experiences.
Current law does not allow the governor to pick and choose which agencies, or services, to cut. At this point his only options are either to direct his agencies to make an across the board budget reduction or to call a special session of the legislature to deal with the shortfall.
Predictably, the Governor’s agencies have responded with draconian cuts to the most critical services. Their political game appears to be to make the reductions as painful to the public as possible to force restoration of their funding.
For instance, somehow a nine percent reduction would force the Department of Corrections to close three prisons, and turn loose more nearly 1,000 felons. Using that absurd fiscal logic, only a twenty-five percent reduction would require the Department to close all the state prisons. To his credit the governor has rejected prison closures out of hand.
Not to be outdone, out of more than a $15 billion budget, the Department of Human Services focused its reductions on eliminating home care for more than 2,000 of our most fragile citizens. Of course, if those fragile citizens cannot obtain home care that now costs the state about $300 per month, they would have to be relocated to a full service residential care unit, costing the state several thousand dollars per month. Not coincidentally, the full service care units are largely staffed by union employees, while the home health care employees are generally not public employee union members.
School districts unveiled plans to hand out pink slips to teachers and reduce school days at many districts all across the state. Public employee unions have uniformly resisted any reduction in current negotiated salary and benefit increases. As long as the public employees refuse to work for less, then the only alternative is to have less public employees working.
The total budget for the Oregon K-12 system provides more than $10,000 per year to educate each student. That means that more than $300,000 is budgeted for each class of thirty students. The current K-12 budget reduction amounts to about $350 per student per year. Who among us believes that those small reductions couldn’t be taken from the two thirds of the money that never finds its way to the classroom?
This is not a game. Fragile people, communities, and children are needlessly being put ask risk, for no other purpose, than political gamesmanship.
Why do the Governor’s agencies play the game? They play the game because it has worked for them in the past, and under the current leadership, it will likely work for them again.
The current Oregon budgets total nearly $60 billion. It represents an increase in spending of nearly fifteen percent over the previous budgets. So the needed reductions are, in fact, only a small fraction of the most recent increases in spending.
The Legislature could meet in special session and reallocate funds to cover these revenue shortfalls in ways that would cause little, if any, reductions in critical services. The reallocation of funds could require some changes in current statute, but that is what the legislature is elected to do.
Instead, the current leadership has chosen to allow the Governor’s agencies to hold Oregon citizens hostage to the threats of untenable, focused reductions in government’s most critical services. Meanwhile, they appear to be eagerly waiting for the federal government to print even more dollars and to issue even more bailout money to the states.
In the alternative, in the event that the federal bailout does not occur, the leadership has suggested that it may call a special session, after the Governor’s September revenue-forecast. They assure us that session will be run like the special session in the spring of 2006 where everything was decided by those few in leadership prior to convening the Legislature. We are now told that they are meeting behind closed doors with former Governor Kitzhaber to determine what is best for Oregonians.
In the 2006 special session no bills were allowed to be introduced
by the members, no amendments to the leadership’s bills were allowed, virtually no public testimony was taken, and the majority party simply rubber stamped the leadership’s decisions. All Oregon citizens were simply disenfranchised by that process unless they were represented by those few in Democrat leadership.
So the two choices now seem to be, either to wait for the Obama administration to protect public employee union jobs by printing and distributing more money, or to accept a new budget essentially created by no more than a few legislators and a former governor.
Once again, the political class is presenting the people with two poor, untenable choices. In my opinion, that is no way to run the government of the people.
This article will be continued next week.