Eugene Weekly : News : 7.1.10

Budget Blues
Panel ponders ominous state funding cuts
By Ted Taylor

What do you know about the Oregon budget, and how does the Oregon budget affect your life? Brewhaha, a collaboration between The Bus Project and EW, kicked off a new series of monthly political meetings June 25 with a budget panel discussion at Davis’ Restaurant downtown. The series is billed as “a monthly political slam over a few pints,” and tends to attract a younger crowd of political activists.

From left are Brett Rowlett, Nancy Nathanson, Steve Robinson and Phil Barnhart

Brewhaha’s panelists for “Who’s Afraid of the Big Bad Budget?” were Brett Rowlett, director of government and community relations at LCC; Reps. Nancy Peterson and Phil Barnhart; and Steve Robinson, senior policy analyst at the Oregon Center or Public Policy. In an attempt to enliven an admittedly wonkish topic, the Bus Project interjected a slide show with graphics and asked each panelist to compare the state’s budget crisis with a classic fairy tale plot.

Facing a $577 million deficit in the 2009-11 budget, Gov. Ted Kulongoski has ordered Oregon’s public agencies and institutions to implement a 9 percent spending cut beginning this summer, and many of the questions asked by the audience surrounded the impact of those cuts and how they can be avoided in the future.

If the economy does not improve or gets worse, Oregon could be looking at a $2.5 billion shortfall in the 2012-13 biennium, said Barnhart. “We’ve spent our stimulus money and we have not rebuilt our revenues,” he said.

Some variables in the budget outlook include uncertainty over federal funds that might be released to help states, and whether the Oregon economy improves, remains stagnant, or gets worse. Barnhart said Oregon depends on capital gains revenues, which have dropped dramatically recently and rise and fall with Wall Street. The state also has some education reserves that could be used to help public schools avoid more teacher layoffs.

The state has little discretion on where its money comes from or how it’s spent, said Nathanson. “The state can’t move money around,” she said, “and 93 percent of the general fund is spent on education, human services and public safety. There’s no way to cut the budget and avoid cuts in those big three.” 

Robinson said state law provides two options for balancing the budget: the governor can make across-the-board cuts in all programs, or the Legislature can meet and “do whatever it wants … There might be a special session in (late) August when the new revenue forecast comes in. Meanwhile, there’s a huge amount of uncertainty.”

Barnhart agreed and said there’s resistance in the Legislature to call a special session. “We don’t want to go into a special session without a clear plan in mind.”

Rowlett noted that increased tuition at LCC is directly tied to cuts in state funding. State support per full-time student in the year 2000 was $2,357, he said; in 2010, the per-student funding had slipped to $1,815. The recession is hitting K-12 public schools as well, he said. The Portland School District is eliminating physical education classes and laying off 10 percent of its high school teachers. “That will come back to bite us,” he said.

Nathanson said she’s concerned about our state’s lack of education programs for doctors and nurses. “Half of Oregon nurses are over 50 and half our doctors are within five years of retirement,” she said. She sees a shortage of medical professionals as “driving up the cost of health care.”

Barnhart and others on the panel called for repealing Oregon’s “kicker law” that requires refunds to taxpayers when revenues are more than 2 percent higher than the governor’s budget projections. “Everybody gets back a percentage of what they paid in taxes,” said Barnhart. The average taxpayer might get $40 back, he said, but wealthy individuals might get a six-figure check. “It prevents us from saving any money.”

Rowlett said if the kicker had been eliminated back in 2007, the state would have accumulated about $1.1 billion by now and would not be in this budget crisis. 

Robinson said he’s grateful for the passage of Measures 66 and 67. “If these tax measures had not passed, things would be worse,” he said.

Heading up the Lane County chapter of the nonpartisan Bus Project is Rachel Loskill. She can be reached at