Oregon Public Broadcasting

The axe is about to fall on state agencies in Oregon.  Governor Ted Kulongoski Wednesday ordered an across the board spending cut.

 The announcement came as lawmakers received predictions of a downward revenue spiral from state economists.  Salem correspondent Chris Lehman reports.

Oregon Senior Economist Josh Harwood warned a legislative panel that the bad news he was about to deliver wasn’t his fault.

Josh Harwood:  “This is when I humbly ask you not to shoot the messenger.”

It soon became clear why Harwood was nervous.  He delivered a string of gloomy numbers that left some lawmakers gasping in astonishment.

If the numbers hold, the Oregon Legislature will have to come up with $142 million of cuts to the current budget.

The Governor is ordering five percent across-the-board cuts to close that gap.  But Senate President and fellow Democrat Peter Courtney says not all state agencies should be treated equally.

Peter Courtney:  “I cannot release criminals in the streets. We cannot do that.  I cannot have people who are severely handicapped or disabled, seniors, children that need critical services that are hurting, I cannot -- we cannot -- turn our back on them.”

The long-term news is arguably worse.  

Going into the next budget cycle, tax and fee collections are projected to be three-quarters of a billion dollars lower than anticipated just three months ago.

If that comes to pass, state budget analysts say there won’t be enough money to fund state services at current levels.

Lawmakers do have a pair of reserve funds to tap.  But Courtney says given the uncertain future, it may be too soon to dip into the rainy day fund.

Peter Courtney:  “Because I don’t know how bad this storm’s going to get. I don’t know how perfect this storm’s going to be.  I can take the bad, I just need to know how bad it is. Now you might say, well now you know how bad it is.  Well no, I don’t. Conceptually, I believe we’re going to double digit unemployment.  I believe the down turns in the economic forecast will continue to go down.  But I still don’t have the exact numbers to deal with.”

Senate Republicans renewed their call for a tax cut to stimulate the economy.  

Republican Representative Vicki Berger said some of the blame lies with the 2007 Legislature, which was controlled by Democrats.  

Berger says lawmakers spent too much money on new programs.  But Berger wouldn’t offer any suggestions of which programs to cut.

Vicki Berger:  “It doesn’t matter what it is, somebody’s going to be running in and saying ‘This is the program you’ve gotta save.’ But it is our job down here to balance the books, and I don’t see how we could sustain growth like we had in the last biennium going forward.”

So the question on everyone’s minds in Salem is which state programs will be trimmed.  

One of the largest agencies is the Department of Human Services, which oversees things like Medicaid and food stamps.  A record number of Oregonians are receiving food stamps right now -- nearly half a million as of last month.

DHS spokeswoman Lauri Stewart says it won’t be easy to find places to cut back.

Lauri Stewart:  “The trick for us is to try to avoid having to get to program cuts for as long as we possibly can.  Because we know that as conditions worsen in Oregon, as things get tougher for people that’s precisely when they need us the most and that’s precisely when the largest demand for our services comes.”

Agencies like DHS may start by reducing their training budgets, legal fees and delaying new computer purchases.

More detail on just what will be whacked will come in about two weeks.  That’s when Governor Kulongoski details his trims for the two-year budget cycle that starts in June 2009.

Online:

Oregon Revenue Forecast