Kulongoski receives across-the-board Oregon budget cut recommendations

Spending-cut proposals submitted to Gov. Ted Kulongoski would result in some services being cut and some workers being laid off.

The proposals were released today on the website of the Department of Administrative Services, which oversees budget and management for the governor.

Among the highlights of proposals, which are subject to review by the governor, and are intended to eliminate a projected $577 million shortfall in tax collections:

• Three prisons would close, including Mill Creek and Santiam in Salem, resulting in the loss of 232 positions and release of 966 inmates.
• Implementation of round-the-clock patrol coverage of state highways would be delayed, although no Oregon State Police troopers are proposed for layoffs.
• Oregon Project Independence would be eliminated, personal care for older and disabled people funded by federal Medicaid money would be cut, and in-home care for seniors would be halved. Payments to nursing homes are would be reduced; legislative approval would be required. Except for Oregon Project Independence, the other proposed cuts would result in a greater loss of federal matching funds.
• Oregon State Hospital would not fill some positions, and other mental health services would be cut, including secure residential-treatment beds.
• State-subsidized day care would be limited to those in transition from welfare assistance.
• Oregon Youth Authority plans hiring freezes and program cuts. But to meet the full $11.9 million cut, the agency warns it may need to eliminate as many as 125 beds for youth offenders and lay off as many as 55 people.

Seven agencies in education, human services — the largest unit of state government — and public safety account for about 92 percent of the projected cuts.

Kulongoski said these cuts are not final. He will review them in the next couple of weeks and may request changes from agencies. He has not yet decided whether to implement the full 9-percent cut, or phase them in.

“There are no good answers and no easy solutions to the current shortfall," he said in a statement today. "With a shortfall of this magnitude, we are limited in our options to balance the budget – and the longer we wait, the more painful and deep the cuts.”

After the latest state economic and revenue forecast May 25, the governor invoked his authority under a 1951 law to cut general-fund spending proportionally to balance the budget. Kulongoski said then he expected layoffs.

"But layoffs should be the last possible alternative,” he said. “I expect management to meet with their union representatives to explore alternatives to layoffs where feasible so that we can achieve savings while preserving as many jobs as possible.”

Only lawmakers can cut selectively. Minority Republicans in both houses have called for a special session, which Kulongoski has declined to call. Balloting for a special session ends at 5 p.m. today; a majority of members in both chambers is required for lawmakers to convene on their own.

House Speaker Dave Hunt, D-Gladstone, said a session now is premature — but he has not ruled it out for the future.

“In close conjunction with the Senate and the Governor’s office, we’ll develop a plan to mitigate the worst of the proposed cuts," Hunt said. "Whether and when we meet in special session will be a decision we’ll make once we’ve had time to do the needed analysis."

Lawmakers are hoping for federal aid to Medicaid and education to make up part of the gap.

“Oregon is not alone – other states across the nation are facing the same declining revenues as we begin to emerge from this last Great Recession,” Kulongoski said.

“I am hopeful that Congress will act quickly to provide needed emergency assistance to help us preserve school days, prevent teacher layoffs and ensure our most vulnerable citizens continue to have access to health care.”

pwong@StatesmanJournal.com or (503) 399-6745

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