Oregon state budget (2009-2010)

Note: This article was last updated in 2010. Click here for more recent information on state budgets and finances.

Oregon's budget for FY2009-11 totaled $61 billion. The state faced a $3.8 billion biennium FY 2010-11 budget deficit, relying heavily on new taxes and federal stimulus money to close the gap in the final budget signed by Gov. Ted Kulongoski and passed by the Oregon Legislature. In Aug. 2010, however, the state budget deficit increased and could top $1 billion. As a result, the governor ordered 9% budget cuts.

Oregon will receive approximately $209 million from the federal government under HR 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010. The extra federal funds won't solve the budget shortfall problem and more cuts are likely, the governor warned in his letter to legislative leadership and in another letter to state school superintendents.

Oregon had a total state debt of $26,365,021,034 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.

2011 State spending & deficit in billions

Total spending	Human services	Education	Protection	Other
$14.5	$3.7	$7.3	$2.4	$1.1

2011 Local spending & deficit in billions

Total spending	Pension	Healthcare	Education	Welfare	Protection	Transport	Deficit
$24.7	$0.1	$0.9	$7.2	$0.7	$2.3	$2.4	$25

State Budget FY2011

See also: Archived Oregon state budgets

Oregon has a budget for FY2009-11 totaled $61 billion, up from $41 billion in 2005-07.

A technical change in tax-withholding tables effective January 1, 2011, meant that the state would have nearly $100 million more for the current fiscal year. The positive budget forecast combined with the transfer of $57 million from higher-than-expected tax-amnesty collections means that the state is not facing more budget cuts for the time being.

Legislative Emergency Board Actions

The state's Legislative Emergency Board unanimously approved spending nearly $18 million from state emergency funds to mediate cuts scheduled to occur in the second round of budget reductions this fiscal year, money which would preserve day care subsidies for poor working parents and allocate federal dollars to schools. In addition to the $118 million in federal stimulus dollars for the state's school, the Emergency Board also approved about $7 million to K-12 education, meaning that schools would not have to make additional cuts. The board also approved $7.6 million from the state emergency fund to stave off cuts in state police. It had previously resorted to using reserve funds on July 22, 2010.

The Legislative Emergency Board consists of 20 members who decide budget matters between sessions, which it did in this biennium. The emergency fund would increase because after Nov. 1, allocations made by lawmakers for specific purposes but were left unspent revert to the control of the E-Board. The Board can tap $54.4 million in the state's emergency fund and unspent allocations, as well as $33 million in other accounts, including the Oregon Lottery and savings from spending cuts in the Legislature, courts and secretary of state which are not subject to the 1951 law permitting the governor to cut the general fund to balance the budget.

Deficit and Budget Cuts

When the state budget deficit grew to possibly $1 billion in Aug. 2010, Gov. Kulongoski asked Democratic legislative leaders to "come to an agreement" to resolve the shortfall and warned agency directors about the growing budget hole and suggests the governor could once again order across-the-board budget cuts. The warning came days after Congress approved extra federal funds for states, with Oregon receiving $118 million for education and $144 million for Medicaid. That extra federal money, however, is insufficient to solve the state's budget deficit and therefore cuts are necessary. At the end of August, state revenues are down $373 million from earlier estimates. When passed, the FY2010-11 budget was $14.2 billion.

In addition to the 9% cuts previously ordered, state agencies submitted plans to cut an additional 8% for the remaining 9 months of the budget - from Oct. 2010 through June 2011, releasing a list of $377.5 million in proposed cuts. Schools, however, will remain untouched as lawmakers plan to rely on the $118 in federal funds and $34 million from the $100 million in the state education reserve, which Kulongski has consented to using after initially resisting. Some agencies altered their budgets to avoid cuts, such as the Department of Agriculture's decision to cover some of the $400,000 it will lose from its general fund operating budget as a result of lower state revenue projections with fees.

On May 27, 2010, the Governor responded to shortfalls in 2009 tax collections by ordering 9 percent cuts across the board in state budgets, which he said he would outline at a speech on June 25, 2010. The budget also did not include cost of living pay increases for state employees.

Figures released by the Oregon House Republicans showed the Oregon Legislature's FY 2010-11 biennial budget had $1.6 billion in new taxes and fees and used $1.258 billion in one-time federal stimulus money for a $52.9 billion total funds budget (two-years) 9.3% larger than the previous budget.

The state found out it would receive $270 million in federal aid in August 2010, and $117 million of it is for education, which could be spent only to retain or hire teachers. While the state education department estimated the increased funding could spare the jobs of 1,600 teachers, uncertainty about the state budget prevented administrators from moving quickly. "There's only one thing worse and harder than cutting staff positions, and that's adding them back and then cutting them again," said Randy Schild, superintendent of the Tillamook School District, Oregon.

Budget background

See also: Oregon state budget and finances

Oregon's budget covers two fiscal years (a biennium). This means it runs from July 1 of an odd-numbered year to June 30 of the next odd-numbered year. The current fiscal period is from July 1, 2009 to June 30, 2011. The budget development process has three major phases: Agency Request, Governor’s Recommended and Legislatively Adopted.

Agency Request Budget

Agencies start the budget early in even-numbered years to develop their Agency Request Budget. This lays out agency finances and policies for consideration by the Governor. The Budget and Management Division (BAM) gives agencies guidelines to use in this process. Agencies send their budget request to BAM by September 1.

Governor's Recommended Budget

The Governor and BAM review the budget request. They use the Governor’s priorities, budget policies and current law to make budget decisions. The Governor’s Recommended Budget document summarizes those decisions. It gives data on all the state’s revenues and expenditures. It also gives information on each agency’s budget. The Department of Revenue puts together a Tax Expenditure Report that is published at the same time. The Tax Expenditure Report outlines the various reductions available to residents for the income tax.

Legislatively Adopted Budget

The Governor presents the Recommended Budget to the Legislature when it meets at the start of the next calendar year (January of 2009, during the 2009-11 biennium). Legislative committees review the proposed budget. They hold public hearings to hear from each agency and the public. Each budget bill has a Budget Report that presents the committee recommendations. The Legislature votes on each budget bill. The budget bills that are enacted into law make up the Legislatively Adopted Budget. Agencies carry out, or execute, the budget over the two year budget period. The Emergency Board can make some changes to the budget between legislative sessions. Special sessions may also be called to deal with budget issues. The Legislatively Adopted Budget and the changes to it make up the Legislatively Approved Budget.

The Oregon State Legislature convenes every two years in regular session on the second Monday in January during odd-numbered years, a date set by statute. Oregon Constitution does not specify a limitation on session length, however most sessions last approximately six months. During the interim, legislators serve on interim committees and task forces that study issues likely to be faced during the next legislative session.

Under a 1951 law, the governor possesses the authority to cut spending proportionately from the tax-supported general fund to avert a deficit.

Budget figures

General Fund

Category	FY2009 Amount in millions Actual	FY 2010 Amount in millions Estimated
Beginning Balance	5	0
Revenues	5,849	6,619
Adjustments	-20	0
Total Resources	5,834	6,619
Expenditures	5,834	6,458
Adjustments	0	0
Ending Balance	0	161
Budget Stabilization Fund	113	15

The following table provides a history of Oregon's expenditures and gross domestic product (GDP).

Fiscal Year	Expenditures (billions)	GDP (billions)
2000	$24.1	$112.4
2001	$25.9	$110.9
2002	$27.7	$117.1
2003	$28.0	$121.6
2004	$28.2	$132.8
2005	$29.1	$138.1
2006	$30.5	$151.0
2007	$32.0	$165.1
2008	$33.6	$165.8
2009	$35.3*	$173.8*

• See Oregon state budget (2008-2009) for more information.

Accounting principles

See also: Oregon government accounting principles

The Oregon Audits Division is the only independent auditing organization in the state with the authority to review programs of agencies in all three branches of state government and other organizations receiving state money. Authority for the responsibilities of the Audits Division is found in sections 297.010 through 297.990 of the Oregon Revised Statutes. Their audit reports are published online in a user-friendly, searchable format. The Division of Audits was established in 1929 by the state legislature to carry out the duties of the Secretary of State as the constitutional Auditor of Public Accounts. Gary Blackmer is the Director of the Audits Division under Oregon Secretary of State Kate Brown. Kate Brown was elected Secretary of State in 2008.

The Institute for Truth in Accounting (IFTA) rates Oregon “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Oregon's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care. Oregon's CAFRs are annual publications of the Oregon Statewide Accounting and Reporting Services (SARS), State Controller's Division, Department of Administrative Services. The State Controller’s Division is responsible for statewide financial accounting, financial reporting, and administration of the statewide accounting system for state government. It prepares the Statewide Comprehensive Annual Financial Report (CAFR); administers statewide central disbursements; and provides professional fiscal guidance, training, and consultation to state agencies. John Radford has been Oregon's State Controller since his appointment by the Governor in 1989.

Credit Rating	Fitch	Moody's	S&P
Oregon	AA+	Aa1	AA+

Budget transparency

Oregon had no statewide, official spending database online. However in February, a group of 27 legislators said they are sponsoring a bill, the "Open Books Oregon Project," that would require the state to create a searchable website by Jan. 1, 2010, listing revenue and expenditures for all state agencies.

• On June 27, 2009 the Oregon state senate unanimously passed House Bill 2500 which will lead to the creation of a website that tracks state spending. On June 30, 2009 the bill was unanimously adopted by the House and will now move to the Governor’s Desk. The nonpartisan bill was written by State Representatives on both sides of the aisle, including: Arnie Roblan, Jefferson Smith, Kim Thatcher, and Gene Whisnant. The passing of HB 2500 marks the largest step towards government transparency in Oregon history.
• Oregon HB 2500 called for the creation of the Oregon Transparency website was created. The measure required the Department of Administrative Services to create the site containing information about state agency revenues, expenditures, contracting, human resources and other data. The website developed and maintained by the Oregon Department of Administrative Services.

Government tools

The state has budget information on its transparency website.

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
[https://web.archive.org/web/2/http://www.leg.state.or.us/budget/home.htm Yes]	yes	no	partial	no	yes	no

See also: Evaluation of Oregon state website

Public employee salary information

The Statesmen Journal has a database of state employee salary information available online.

Economic stimulus transparency

• Of the stimulus funds approved by Congress in Augusut 2010, Oregon received $118 million to schools and $143 million to Medicaid.

• Oregon received an estimated $1,686,263,846 from the American Recovery and Reinvestment Plan of 2009.

• Oregon established an economic recovery website to show how legislators and government officials in Oregon are spending Federal funds.

See also

Oregon government sector lobbying
Oregon state budget and finances
Oregon public pensions

External links

• State Budget Solutions, Oregon
• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Cascade Policy Institute
• Oregon Budget and Management Division
• Oregon State Legislature, Budget and Taxation
• [www.oregon.gov/transparency Oregon state transparency website]
• Oregon Transformation

Additional Reading

• Salem-News,Governor Delivers 2009-2011 Recommended Budget to the Legislature, December 2,2008
• KVAL News, "Gambling addicts could lose big in state budget cuts," April 14, 2009
• Statesman Journal, "Budget will haunt 2010 session," July 6, 2009
• Statesman Journal, "Lawmakers alter off-session scheduling for panels," July 30, 2009