Gov. Kate Brown says her budget proposal, released Thursday, contains cuts she finds "absolutely unacceptable." She also calls her plan "a short-term solution, nothing more." Unfortunately, that's been this state's approach for far too long: patch the leaks, tax the usual victims just enough to limp through another biennium, but never address the underlying problems.
Oregon faces a $1.7 billion shortfall in the two-year budget lawmakers will craft starting in February. Much of that is the result of the state's public employee pension liability, but Brown's budget contains no proposals to address that problem.
Oregon voters were asked Nov. 8 to approve a corporate gross receipts tax that would have raised an estimated $3 billion. They said no emphatically; the measure passed in only two counties. Now it's up to the Legislature to figure out how to get along without it.
Governors' budget proposals aren't intended to be final documents; the budget is the job of the Legislature. The co-chairs of the joint Ways and Means Committee will issue their own proposed spending document later, and the final budget frequently resembles neither proposal.
The governor's budget includes significant cuts — she would close a newly opened psychiatric hospital in Junction City and a youth correctional facility in Clatsop County — reduce funding for local developmental disability programs and slash Project Independence, which helps seniors stay in their homes, among other reductions.
K-12 education would see more money than in the current budget, but much of that would go to pension payments, leaving schools with $500 million less than districts say they need. College and university funding would be unchanged, which higher education officials say wouldn't be enough to fund existing service levels.
On the revenue side, Brown would increase liquor and cigarette taxes — always the path of least resistance — and eliminate a tax break for S corporations that she says hasn't created the investment or jobs it was supposed to generate. Other tax credits would expire, and hospitals and insurance companies would see a tax increase as well.
Brown says she's open to suggestions from the Legislature on other ways to raise revenue, and will listen to proposals to reform PERS, but has said there is little the state can still do about pensions that will survive court challenges.
It's time for the Legislature to get serious about fixing the state's dysfunctional tax system, a topic that has generated much discussion over the years but precious little action. While they're at it, lawmakers should get serious with public employee unions and negotiate more changes in the pension system to chip away at the unfunded liability plaguing the budgets of state agencies, school districts and local governments.
Majority Democrats have the power to push for real changes, if they can find the will. Minority Republicans already have denounced Brown's budget and blamed the Democrats for what they call unsustainable spending, but they will have to spell out where they think cuts should be made, and be open to some revenue increases, too.
Brown says her budget "represents the beginning of a conversation, not the end."
Let the conversation begin.