Sunday, May 23, 2010

Governor's Study Shows Oregon Faces Decade of Budget Deficits; Support for Unions Wanes in Illinois

A study conducted by Oregon Governor Ted Kulongoski shows that Oregon will not be bailed out by a rebounding economy, assuming of course the economy rebounds at all.

Please consider New report says Oregon faces decade of budget deficits http://www.oregonlive.com/politics/inde ... ces_d.html

Oregon risks 10 years of crushing, multibillion-dollar budget shortfalls unless it immediately puts the brakes on spending and starts offering fewer services, cautions a new report released Thursday.

This is no attack by anti-tax or anti-government factions. The warning comes from Gov. Ted Kulongoski's "reset Cabinet," a group of trusted advisers he appointed to assess the state's long-term fiscal outlook and suggest changes.

"We find that Oregon faces a decade of deficits, during which we cannot expect to be bailed out by a rebounding economy or a more generous federal government," the report, says. If state spending is allowed to grow at its current rate, it goes on to say, "lawmakers and voters will find themselves again and again between the rock and the hard place of cutting services or raising taxes."

Why Oregon Must Reset State Government

Inquiring minds are investigating an Update from the Governor’s Reset Cabinet http://governor.oregon.gov/Gov/docs/intro.pdf

We conclude that the state will face a decade of deficits if it tries to sustain the type and scope of services it now provides. Business-as-usual budgets will no longer suffice. Current services, as currently structured, will be unsustainable.

We must rethink and refocus our priorities, move from short-term budgeting to long-term planning and develop smarter ways to meet our responsibilities in the challenging years ahead.

In that process, we must reaffirm our common goals and judge what we are doing now and what we propose to change by well defined measures of success. In the end, we must be willing to adopt new ways to organize and deliver services, control costs and get the best value for our tax dollars.

Revenue growth is expected to resume as the economy recovers and should make up for the loss of one-time funds that sustain the current budget. The most likely scenario is that Oregon will have approximately the same level of general fund resources to work with in the next biennium (2011-13) as it has in the current biennium.

But increasing costs, needs and demands will drive the expenditure side of the budget far beyond its resources. When compared to the cost of maintaining the current level of services, the state faces a shortfall of more than two billion dollars, or 13 percent of its next budget – a shortfall that persists at that two billion dollar level in budget projections through 2019.

As a result, we find that Oregon faces a decade of deficits, during which we cannot expect to be bailed out by a rebounding economy or a more generous federal government. In fact, trends in both categories could make our fiscal future even more challenging. It is important to recognize that Oregon is not alone. Most states face similar challenges. Some are beginning to talk about “reset initiativesâ€