State agencies must cut 9% of budgets, governor orders

SALEM — Gov. Ted Kulongoski has ordered state agencies to cut their budgets by 9 percent to help close a $577 million gap in the state's 2009-2011 budget.

State law gives the governor authority to order only across-the-board cuts, which could mean teacher layoffs at many schools and loss of services for seniors.

Kulongoski said Tuesday he had little choice.

"With limited options to balance the budget, and growing uncertainty about federal assistance, the longer we wait to implement these reductions, the deeper the cuts will have to be to bring the budget into balance," Kulongoski said after meeting with agency directors earlier in the day.

The 9 percent cuts in spending from the tax-supported general fund will take effect July 1, the start of the second year of the state's two-year budget cycle.

Lawmakers still hold open the possibility of a special session during which they can cut selectively. Such a session would be closer to Aug. 26, when the state's next economic and revenue forecast is scheduled. There may be other revenue sources available, such as federal aid and some state reserves.

State leaders remained hopeful Tuesday that at least some of the cuts could be avoided if Congress agrees to help cash-strapped states.

A $24 billion extension of Medicaid to states is pending in the U.S. Senate, where it was attached to an extension of unemployment benefits and tax breaks. Oregon's estimated share is $200 million.

There is also a proposal for $23 billion in aid to states for education. Oregon's estimated share is $230 million for schools and $40 million for higher education.

In statements, House Speaker Dave Hunt, D-Gladstone, and Senate President Peter Courtney, D-Salem, said they want to wait until Congress acts — or doesn't — and Oregon gets its next revenue forecast in late August.

Courtney suggested the next step won't be easy.

"Although there's simply not enough revenue to continue the level of services the state provides," he said, "our final plan will be a reflection of our efforts to protect those who need us most."

Kulongoski went ahead with his June 9 cancellation of proposals to close three small prisons, two of them in Salem, and to cut community corrections grants so deeply that counties would drop supervision of low-level felons. He is asking the Legislative Emergency Board, which meets between sessions, to draw $18.7 million from the state emergency fund when it meets Sept. 22.

Among the spending cuts that Gov. Ted Kulongoski let stand Tuesday:

  • A delay in hiring 34 Oregon State Police troopers to implement around-the-clock patrol coverage of state highways.
  • A limit on state-subsidized day care to families in transition from welfare assistance, as required by federal law.
  • Leaving vacant 20 positions at Oregon State Hospital, which is set to open new buildings next year.
  • Reductions in state aid to public schools in 198 districts ($243 million) and 17 community colleges ($21 million).
  • Community mental health programs affecting 1,500 children, and personal care for 800 adults.
  • Halving in-home care for 10,500 seniors and cutting federally funded personal care for 1,500 seniors.

Jerry Cohen, state director for Oregon AARP, said he felt the cuts in long-term care went too deep.

"It truly is a challenge," Cohen said. "We've been chipping away at our long-term-care system, but this is taking a sledgehammer to the foundation."

Hunt and Senate President Peter Courtney, D-Salem, said Kulongoski was right to start the cutting process.

"The Legislature continues to look at our options to soften the blow from the most severe of these cuts," Courtney said. "Each step of the way, we'll be thinking of everyday Oregonians and the challenges they're facing in their lives."

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