Oregon budget committee chairs recommend deep cuts

SALEM — Key Oregon lawmakers on Tuesday recommended deep cuts to schools, long-term care programs for seniors and just about every other program state government provides as the Legislature grapples with a severe budget shortfall.

The three co-chairs of the Ways and Means Committee released their proposed two-year budget with calls for "shared sacrifice."

Their $5.7 billion in proposed school spending is slightly more than Gov. John Kitzhaber suggested two months ago. But it's still $1 billion short of what schools say they need to continue operating as they do now, and education lobbyists quickly announced their disappointment.

"We are trying to do the best we can for Oregonians with what they've given us in revenue," said Sen. Richard Devlin, the committee's Senate co-chair. Reps. Peter Buckley, D-Ashland, and Dennis Richardson, R-Central Point, are the House co-chairs.

The recommendations are a response to a $3.5 billion gap between state tax collections and the estimated cost of continuing state services at their current levels. The lawmakers said the cuts aren't easy but are necessary because the struggling economy has severely cut back on tax collections.

The co-chairs recommend tapping into $100 million in savings from the Education Stability Fund along with $23 million from another education fund to boost spending on schools above Kitzhaber's proposal.

"We can't create more money," Richardson said. "So what we tried to do is give certainty and stability to the 197 school districts and the superintendents that have to come up with budgets."

Richardson said he hopes the school funding bill is approved in April so schools know exactly how much money they'll get and can plan accordingly, even as lawmakers work out the rest of the budget.

Education groups said they're hoping for up to another $145 million that would put education spending at about 40 percent of total spending.

Such severe education cuts force schools to transform themselves, eliminating many extras like elective classes, said Craig Hawkins, communications director for the Confederation of Oregon School Administrators, which lobbies on behalf of schools.

"The school you went to is not the schools of today," Hawkins said, adding that schools are doing good work despite the budget challenges.

In a statement, Kitzhaber said it was too early to endorse any specific element of the co-chairs' budget.

Aside from the school spending, the proposal leaves most details on specific programs to be decided but outlined spending by categories.

Calling for "shared sacrifice," the co-chairs said they tried hard to craft a budget that spreads the pain and doesn't single out particular programs. But Buckley said the limited money available for seniors and people with disabilities threatens programs that allow them to get in-home care.

"It is an unacceptable problem that has to be resolved," Buckley said, adding that finding money for the long-term care programs is a top priority.

The co-chairs recommend a $14.65 billion budget for the general fund and lottery fund, the two accounts over which lawmakers have the most control. Their proposal sets aside $460 million of that in savings — a priority for Republicans and a reflection of their new influence on the budget process after years of Democratic control.

The GOP won enough seats in the 2010 election to tie Democrats with 30 members each, creating a unique power-sharing arrangement that has three Ways and Means co-chairs instead of the traditional two.

House Democrats said the proposal leaves too much money on the table and advocated further tapping reserve accounts like the Rainy Day Fund.

"Now is not the time to leave $440 million sitting in a savings account when it's raining and the roof is leaking," said House Democratic Leader Dave Hunt of Gladstone.

The co-chairs' proposal cuts 275 close-custody beds for the most serious offenders in the Oregon Youth Authority, the state's juvenile corrections agency. Kitzhaber had recommended cutting 475, roughly half the available beds.

They also propose funding the Oregon State Police from the general fund instead of asking voters to take 93 million from gas tax proceeds. But their budget does not include money to fill 49 vacant positions.

The lawmakers said their budget assumes that a Kitzhaber initiative to transform the health care system gets approved. An advisory committee of health care interests has recommended changing the health care system to reward focus on keeping patients out of the hospital.

Kitzhaber proposed saving money in the near-term by cutting payments to doctors and hospitals by up to 19 percent. Devlin said that number is too high and the lawmakers are hoping to allow for a smaller cut in payments to health providers.

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