Legislative budget-writers show how they’d spend state money, and it could mean cuts

Oregon’s K-12 schools won’t feel pinched under a proposal unveiled by legislative budget-writers Thursday, but other government services throughout the state are likely to see cuts.

The co-chairs of the Joint Ways and Means Committee presented a $23.2 billion budget plan. That represents a 10 percent increase from the approved 2017-19 state budget, but not enough to maintain current service levels.

Spending in nearly every area of the budget comes in below what state economists say will be needed to keep service levels steady over the next two years. That would likely mean public employee layoffs, less grant money available to organizations and municipalities that rely on state support, and other reductions as Oregon’s state government tightens its belt.

In her $23.6 billion budget proposal released late last year, Gov. Kate Brown called for spending $8.87 billion in general and lottery revenues for the K-12 state school fund, the main source of money for school districts throughout Oregon. The legislators did likewise in their proposal.

“We’re putting $668 million more into the current service level than the previous biennium, which is a non-trivial sum of money,” Sen. Elizabeth Steiner Hayward, D-Beaverton, said. “We’re doing the best we can with the available resources. We recognize that it’s not ideal.”

State Rep. Dan Rayfield, D-Corvallis vowed that lawmakers will be “working this entire session to try and find more money” for public education. 

Unlike Brown’s budget, the lawmakers’ proposal does not assume any tax increases will give budget-writers more money to spread around. Brown recommended changing Oregon’s business tax code and ending payments to counties under the Gain Share program, lessening the need for state budget cuts.

The cost of providing public services tends to increase every year due to inflation, cost-of-living adjustments for employees, rising pension obligations and other economic factors.

The Oregon Health Plan isn’t entirely spared from cuts the way that the state schools fund is, but Steiner Hayward, who is a practicing physician, said the co-chairs are proposing no cuts to patient services.

“There may be some areas of savings for administration, but we will not be cutting eligibility or benefits for any Oregonian who receives services or is eligible for services through OHP,” Steiner Hayward said.

Steiner Hayward was one of two senators named to co-chair Ways and Means for this session. State Sen. Betsy Johnson, D-Scappoose, said the three co-chairs have worked well together, and she suggested that their geographic diversity helped guide their budget proposal. All are from western Oregon, but Johnson represents a mostly rural district northwest of Portland, Steiner Hayward represents an urban district on Portland’s Westside, and Rayfield represents part of the mid-Willamette Valley.

“We all brought our own ability to project the concerns of all of Oregon into this budget,” Johnson said.

Rayfield said the committee’s job is to balance the cost of government services with the available resources. 

“This is not a perfect budget,” he said. “There will be folks who are not happy with this budget..”

The Senate Republican leader isn’t one of those folks.

“For the first time in my career in the Senate, it is refreshing to get a glimpse at a budget framework that is fiscally responsible and will leave a healthy ending balance,” said state Sen. Herman Baertschiger Jr., R-Grants Pass, in a statement released shortly after the budget was unveiled Thursday.

Johnson, Rayfield and Steiner Hayward said keeping Oregon financially stable is one of their main objectives. They want to avoid deeper cuts in the coming decade, especially if the state’s economy slows down.

“This takes a significant step toward creating sustainable budgets in the future,” Rayfield said.

The Legislature is required to approve a balanced budget for the next biennium by the end of June. With both the governor’s budget proposal and the Ways and Means co-chairs’ plan now on the table, the state’s leaders have until the end of the legislative session to hammer out an agreement.