Breaking News: Today's Budget Forecast and What it Means for Oregon

Hi Friends,

It's Friday, May 15th, and just a few hours ago, legislators, staff members, reporters, and lobbyists huddled around Capitol televisions to watch a team of economists from State's Office of Economic Analysis release the May Oregon Economic and Revenue Forecast.

You may be asking yourself: Why is this report such a big deal?

The answer is simple: it contains the "bottom line" that we'll be working with to balance the budget in the next six weeks.

Taking into account the latest economic indicators and sophisticated economic models, the report forecasts the amount of money that the state will bring in over the next two years.

This number, in turn, will determine the amount of money we have to work with as we figure out how to keep education, human services, and public safety adequately funded in the times when we need these vital services the most.

You'll be hearing a lot about the budget and the budget deficit in the next month from the media, advocacy groups, and from your elected officials.

My goal today - and going forward - is to communicate with you directly, and keep you up to date as I receive new information and as events unfold.

So what follows is an initial - but incomplete - summary of what we learned in the last few hours, and what that means for our budget, our community, our state, and our future.

Among the many important figures we learned today from the economic forecast, the most important number of all was this one: $4.2 billion.

That's the gap between what we expect the state to collect in revenue in the next two years, and the amount of money we need to keep our state services functioning at current levels.

To put it in perspective: if we simply spread our anticipated revenues evenly across current programs, we'd be facing cuts of upwards of 25%.

25% cuts to school budgets, to police and fire departments, to health care, to senior services and so on. That's simply not acceptable - it is at precisely times like these that we need a strong social safety net.

As much as I'd like to promise that I won't support any cuts for senior care or K-12 education, or public safety, or countless other critical programs, the reality is that we're not going to be able to balance the budget without significant, painful budget cuts in hugely important services.

90% of our General Fund dollars go to human services, education, and public safety; we'll have to make cuts in all three sectors in order to have a chance at passing a budget.

But Oregonians know that we can't simply cut our way out of this mess. Nor, for that matter, can we simply raise enough new revenue to fill the hole in our budget without cuts.

To work our way out of this economic crisis we must take a balanced approach that involves cutting spending, tapping our reserve funds and asking big corporations and the wealthiest Oregonians to contribute their fair share.

In particular, I'm in favor of increasing the corporate minimum tax from just $10, and asking large, profitable companies to pay their fair share. I'm also supportive of proposals to increase the rate of income taxation on the wealthiest Oregonians (those making more than $250,000 per year, even in a recession). Facing big cuts in our social safety net, I think it's time to ask those of us doing very well to contribute a little bit more.

I can't promise you that the decisions I'll be making in the coming weeks will be easy, nor can I promise that cuts won't be painful.

I can promise you that as we begin to make the hard decisions over the budget in the next few weeks, I will advocate as strongly as I can for this principle: in times of economic crisis, we must prioritize our shared social safety net and the services on which our most vulnerable citizens depend.

I look forward to hearing from you in the coming weeks and months.

Until next time,