|
The purpose
of this memo is to bring you up to date on Oregon’s current
state budget situation, to fill you in on what we know and what we
don’t know at this point, and to solicit your immediate action.
The
State General Fund Budget Deficit
The
September 2001 Economic and Revenue Forecast indicated that
2001-03 state general fund resources were down $300 million from
close-of-session predictions. Discussions with the Governor’s
Office suggest that the December forecast, due to be released on
Nov. 30, will show a deficit of upwards of $600 million.
A
Probable 2002 Special Legislative Session
The
Governor and Legislative Leadership have apparently agreed that a
special session will be necessary - probably in late January or
early February - to re-balance the 2001-03 state general fund
budget. The Governor has already requested state agencies to
prepare lists of proposed budget cuts in 2 percent increments up
to a total of 10 percent.
2001-03
State Budget Re-Balance Plans
Both party
caucuses in both houses of the Legislature have held discussions,
with and without the Governor’s involvement, seeking solutions
to the 2001-03 state budget deficit. So far, no definitive plans
have emerged.
Budget
Re-Balance Options
The budget
re-balance options facing the legislature are relatively simple:
reduce spending to meet anticipated revenue; increase revenue to
meet anticipated spending; or some combination of the two.
Likely
Scenarios
We’re
hearing that if the size of the deficit grows to over $600
million, some revenue enhancements, in addition to budget cuts,
will be necessary. We’re also hearing that since the
appropriation to K-12 schools represents 42 percent of the
legislature’s 2001-03 discretionary- spending budget, cuts in
K-12 will be on the table.
Your
Budget Planning
While not
at all certain, we’re reasonably confident that if the K-12
budget is reduced, those cuts will impact the second year of the
biennium - 2002-03. Manage your budget over the next 17 months and
spend prudently the remainder of this school year to establish an
ending balance that will mitigate any revenue shortfall next year.
OSBA’s
Message
The resolution
unanimously adopted by the OSBA membership at our annual business
meeting Nov. 17 unequivocally states the association’s
opposition to any cuts in the 2001 Legislature’s $5.2 billion
appropriation to K-12 schools and clearly states the reasons.
The
decision to cut K-12 schools will be a political one, not a
necessary one. The legislature has other options available to it:
use existing unappropriated revenue or enact new revenue:
 |
Existing
Unappropriated Revenue |
|
|
Ending Balance |
$ 86
million |
|
|
Medicare Upper
Payment Limit (MUPL) |
120
million |
|
|
National Tobacco
Settlement |
82
million |
|
|
Emergency Fund -
General Purpose |
40
million |
|
|
Emergency Fund -
Special Purpose |
68
million |
|
|
|
|
|
|
Total |
$ 396
million |
|
|
|
|
|
New
Revenue |
|
|
Delay
Measure 88 Implementation
(Increases federal tax deduction
from $3,000 to $5,000) |
$ 160
million |
|
|
Increase Cigarette
Tax by 50¢ per pack |
100
million |
|
|
Enact 2 percent
personal income tax surtax |
114
million |
|
|
Total |
$ 374
million |
|
|
|
|
Your
Immediate Action
Contact
your Senator
and Representative
immediately!
-
Convey
clearly to them the impact any further budget cuts will have
on their schools in their communities.
-
Share
with them the cuts you’ve already made to balance this year’s
budget.
-
Convince
them that cuts to K-12 schools are not necessary in view of
the other resources (outlined above) they have available.
-
Point
out to them your district's economic status in your community
(e.g. largest employer, size of payroll, etc.) and the
negative impact budget cuts will have on stimulating an
economic recovery.
-
Ask
them what they really meant when they said during last year’s
campaigns that K-12 schools were their highest priority.
- Make them understand
that they will be held publicly accountable for their
decisions that negatively impact schools.
|
