Gov. Kate Brown is proposing a roughly equal combination of new revenues and program cuts to close a looming $1.7 billion shortfall in the state's budget.
In the wake of the November defeat of Measure 97, which would have raised $3 billion a year, Brown is asking legislators to approve $897 million in new revenue to help balance the 2017-19 budget.
The money would come from increases in tobacco and liquor taxes and an increase in hospital assessment and insurer taxes designed to provide health-care coverage for every Oregon child.
But the proposed budget does include reductions, which the governor decried.
"This budget is a short-term solution, nothing more," she said. "It represents the beginning of a conversation, not the end."
Among the cuts, Brown's proposed closing the Junction City state psychiatric hospital, which opened in 2015, and a youth correctional facility in Clatsop County.
She's also called for cutting funding for community-based developmental disability programs, which would affect the services they deliver to clients. And she would eliminate a program that provides health-care information to families with children who have special medical needs.
Proposed spending for K-12 education would be "held harmless," said Kristen Grainger, Brown's communication director, meaning it would not face any reductions. The state would pump $8 billion into elementary and secondary education, if approved by legislators during the 2017 session.
That would mark an increase from the $7.4 billion contained in the state's 2015-17 budget. But the increase is intended to cover the higher costs of employee pay and benefits, including much higher payments to the state pension system, not to add or expand programs or services.
Oregon Opportunity Grants, aimed at helping the state's neediest post-secondary students, are expanded in Brown's budget, with an aim of providing financial assistance to an additional 5,000 students.
She has also chosen to preserve the Oregon Promise program, which lets high school students with high enough grades attend one of the state's nine community colleges for as little as $50 per semester.
Funding for community colleges and higher education, meanwhile, would contain no built-in cost for maintaining current service levels.
"These cuts are a level that I find absolutely unacceptable," Brown said. "State needs are growing, but state resources are not keeping pace with the needs."
On the other hand, the governor has proposed borrowing $350 million to help with facilities projects at the state's colleges and universities. That effort includes borrowing $15 million in debt for campus security upgrades in the wake of the October 2015 shootings at Roseburg's Umpqua Community College.
Elements of a transportation-funding package expected to be a prime source of haggling and controversy in the 2017 session are not contained in Brown's budget. Those, Grainger said, will be included in a separate bill introduced during the session.
However, her budget does contain some specific infrastructure funding proposals. She proposes $30 million for drought-related feasibility studies in areas around the state. Most of those will target hard-hit rural communities, Brown said. Other projects would upgrade fish hatcheries, improve parks and provide new facilities for recreational and commercial boating.
The budget also calls for borrowing money to jump start clean-up activities along the Willamette River in Portland, part of the U.S. Environmental Protection Agency's Superfund project.
The governor is also supporting a new initiative -- creation of the Oregon Manufacturing Innovation Center. The center, envisioned as a model for future applied research and workforce training efforts, would be financed by shifting funding within Business Oregon.
Lawmakers and business groups have waited eagerly to see Brown's proposals.
"It will definitely prompt debate and it should," said Senate President Peter Courtney, D-Salem. "Oregon faces enormous budget challenges for the next two years. Meeting those challenges will require us all to work together. The process doesn't end today. It is just beginning."
He added that the co-chairs of the Legislature's Joint Ways and Means Committee will present their own proposed budget early next year.
The state's university presidents, in a joint statement, urged lawmakers to increase operating funds beyond the levels specified in the governor's budget. By doing so, they said, "every campus can keep tuition at a manageable level for the next two years and maintain vital support services that keep students on track to graduate. If we want to enable more Oregonians to earn college degrees at an affordable level of tuition, additional resources will be needed."
(c)2016 The Oregonian (Portland, Ore.)
