SALEM- With just over a week to go before the August 26 revenue forecast, State Economist Tom Potiowsky and Governor Ted Kulongoski let slip that the $577 million budget shortfall projected back in May likely will be increasing by an additional $200 to $500 million.
“Given the information available, we estimate that the general fund revenue forecast will be down between $200 and $500 million,” wrote Potiowsky in a memo sent to Gov. Kulongoski on August 11. “We stress this is a likely outcome and the final numbers could be outside the range.”
Kulongoski followed up by sending his own letter to the Legislative leadership, Senate President Peter Courtney, D-Salem, and Speaker of the House Dave Hunt, D-Clackamas, explaining the situation.
“After nine negative forecasts over the past 27 months, it will be prudent to expect and to plan for continuing challenges ahead of us,” wrote Kulongoski.
Eileen Norcross, Senior Research Fellow at the Mercatus Center, said that most states are having the same problems as Oregon in terms of growing deficits.
“They have had some sustained increases in spending in the 1990s and into the 2000s,” said Norcross.
The drivers of spending, she said, are increases in Medicaid enrollment, education spending, and deferred public sector pension payments.
In his letter to Courtney and Hunt, Kulongoski wrote, “I am hoping we can come to an agreement on how to resolve the deficit if the forecast materializes as expected, so we can bring the state budget back into balance for the biennium.”
“With nine months remaining in this biennium, we still have time to implement reductions; but if we wait much longer, that opportunity may not be available,” he wrote.
Norcross noted that in spite of receiving federal stimulus funds, most states are still facing these large deficits.
“Basically states have now received stimulus funds and, in spite of that, these gaps continue,” she said. “It doesn’t look like these revenues will recover for a couple of more years. They’re projecting of revenues not recovering, in some cases, until 2015.”
Some states, Norcross said, have been using several “short term fixes” like issuing debts, deferring pension payments, “one shot” revenue sources, and fund transfers to fill these budget gaps.
She added that until the revenues recover, states are left with few options, including raising taxes, cutting spending, and taking a deeper look at the cost drivers and considering reforms of those cost drivers.
Kulongoksi said in his letter that he remains opposed to using reserve funds and using federal Medicaid resources to increase current spending levels.
Kulongoski made no mention of calling a special session, but Republicans jumped at the chance to call for one in light of the added shortfall.
“There is no doubt that the out-of-control appetite for spending has created this mess, but our most important services should be protected in spite of those decisions,” said Sen. Bruce Starr, R-Hillsboro, in a press release sent Tuesday. “I hope Democrats have the courage to do the right thing this time and call us into special session. We were elected to do a job that includes balancing the budget.”
Norcross doesn’t know Oregon. The Oregon legislature has blown hundreds of millions of dollars on subsidizing “green” jobs. All it mostly has done is enrich foreign companies exporting to Oregon. These funds were stolen from education, and education now limps along discouraging businesses from locating here.
While the country bleeds $165 billion a month, David Wu uses tax payer dollars to send out brochures to aid his campaign.
Rob Cornilles Asks: “Why is David Wu Using Taxpayer Dollars to Campaign?”
Rob Cornilles for Congress, campaign Press Release
View David Wu taxpayer funded campaign fluff brochure here
(long download)
Beaverton, OR - Rob Cornilles, Republican nominee in Oregon’s First Congressional District, has released the following statement in response to David Wu’s use of taxpayer funds to promote his campaign: Since May of 2010, David Wu has produced and mailed five direct-mail pieces at taxpayer expense through the congressional franking privilege. “While Oregonians continue to tighten their belts and make sacrifices at home, David Wu sits in Washington and unapologetically wastes taxpayers’ money for personal political gain. His actions are as indefensible as a teenager stealing mom’s credit card. “David Wu recently produced, published, and mailed five slick direct mail pieces that are blatantly designed to help his re-election campaign - each one filled with hollow rhetoric - all at taxpayer expense.
“In his most recent abuse of the franking privilege, entitled ‘Sparking the Recovery,’ Mr. Wu audaciously claims he is ‘reducing the deficit by cutting spending’ and working to ‘make the federal government live within its means.’ How can David Wu claim with a straight face that he is AGAINST government spending and FOR fiscal responsibility when he voted FOR the ineffective and ill-named ’stimulus,’ FOR the massive expansion of government in the health care reform law, FOR the increase of the national debt limit by 1.9 trillion dollars, and just sent five different electioneering mailers to thousands of people on the taxpayers dime?
“If David Wu actually was an effective representative over the last twelve years, he would not have to resort to spending his constituents’ money to make his case for re-election. He’d be in the district during the August recess listening to voters via town halls and forums. Instead, last week he raced back to Washington to cast one more vote for government spending.
“If David Wu actually understood the serious economic challenges and the unrelenting, massive unemployment currently facing average Oregonians, he certainly would not title his most recent taxpayer-funded mailer, ‘Sparking the Recovery.’ The average Oregonian knows what David Wu simply does not: there has been no effective recovery in Oregon because a jobless recovery is not a recovery at all. Though he promised a ‘Recovery Summer,’ Mr. Wu has turned this into a ‘Run for Cover’ summer.
“When long-term incumbents like David Wu wantonly abuse the franking privilege (and the taxpayers’ wallets) like this, it is no wonder that Congress’s approval ratings are at an all-time record low.”
Cornilles is a prominent advisor in the sports business industry, having founded Game Face, Inc in 1995. He and Allison, his wife of 24 years, volunteer in various community causes, including local schools, Boy Scouts of America, the Good Neighbor Center, and other organizations centered on developing stronger youth citizens and leaders. They are also active in the lives of their three sons.Oregon’s first Congressional district stretches from Portland to the Oregon Coast and encompasses all of Washington, Yamhill, Columbia and Clatsop counties, and part of Multnomah County.
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