BY SARAH ROSS

SALEM- Gov. Ted Kulongoski’s final approval over agency budget cuts has reverted Oregon’s General Fund spending to approximately 2007 levels. Oregon’s General Fund budget accounts for about 22 percent of the entire Oregon state budget.

Despite cuts to the General Fund, the state’s total budget has increased by over $11 billion since the last biennium.

Gov. Kulongoski approved cuts made Tuesday by state agencies to reduce Oregon’s budget by $577 million, in order to close the unexpected budget deficit announced last month.

Kulongoski used his “allotment authority” to make across the board cuts for every agency rather than calling the Legislature into a special session to make specific reductions. The cuts that go into effect starting on July 1^st will represent a 9 percent cut for the remaining year of the 2009-2011 budget.

“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,” said Kulongoski in Tuesday’s press release.

The governor stressed the need to “operate with the reality of today,” explaining that the state doesn’t have the revenue to support the services that were approved in the legislature’s budget.

Responding to concerns of prison closures and the release of criminals due to the cuts for the Oregon Department of Corrections, Kulongoski restated his intentions of asking the legislature’s Emergency Board Committee to grant the Department the necessary funds to keep prisons open.

Senate President Peter Courtney and Speaker of the House Dave Hunt issued statements soon after the governor’s announcement.

Courtney called news of the cuts “sobering,” but reinforced the Legislature’s commitment to “soften the blow from the most severe cuts.”

“Each step of the way, we’ll be thinking of everyday Oregonians and the challenges they’re facing in their own lives,” said Courtney.

Hunt echoed similar sentiments saying the legislature will continue on the same course it’s been on in the past few weeks. This includes figuring out the worst of the cuts, lobbying for additional federal funding, and preparing cuts to the agencies that the governor doesn’t have control over, such as the legislature.

With the $577 million reduction, the legislatively approved budget for the 2009-2011 biennium will be reduced from $14.2 billion to about $13.7 billion.

Ken Rocco, Legislative Fiscal Officer for the Legislative Budget Office, noted that while the General Fund budget is smaller than it was in 2007-2009, when it was $14.4 billion, it is still bigger than it was prior to that biennium.

The 2005-2007 biennial General Fund budget totaled $12.4 billion (which is $1.3 billion less than this year’s adjusted budget). Prior to that, the budget in 2003-2005 was $11 billion and in 2001-2003 was $10.5 billion.

The state’s total budget this biennium is $59.6 billion. It was $48.3 billion in 2007-2009.

An Oregon Politico analysis into how this biennium’s General Fund budget compares to the others shows increases in “Other Education” and Human services. Rocco said these increases came about from additional student assistance grants and “caseload growth” for the human services department due to the recession.

Rocco also mentioned that the cuts made by the governor will only be to the general fund and are actually only 4.6 percent of the biennial budget. They are reflected as 9 percent cuts because those agencies that have already spent their budgets for the first half of the current biennium will need to cut 9 percent from the next year to meet the 4.6 percent cut for the full biennium.

The governor’s largest reductions are coming in education and human services. The Department of Education will lose $258,945,297 while the Department of Human Services has to reduce its budget by $158,260,778.

Schools will face the brunt of the Department of Education’s loss with many of them reducing school days or laying off staff in order to meet their reduction goals while honoring union contracts.

As for human services, most of their cuts will come from food stamps, mental health services, the State Hospital, and “managed care organizations.”

And although the general budget mentioned above is being cut, the “Other funds” budget which constitutes just over 50% of the state’s total budget has continued to grow each biennium, including this one. This budget consists of funds used by agencies for services and are usually paid for with taxes and fees. This budget was approved at $29.9 billion in the current biennium which is up from $23.8 billion in 2007-2009, $21.8 billion in 2005-2007, and $18.09 billion in 2003-2005.

BY RACHEL CHEESEMAN

ALBANY- James “Jim” Egan of has been practicing law for over 20 years as a shareholder in a law firm in Albany, Ore.

He will continue his legal career in a new capacity after being sworn in as circuit court judge for Linn County, filling one of the two vacancies created by the retirements of Judges Rick McCormick and Glen Baisinger.

“I am very pleased to appoint a lawyer with his work ethic to serve as a judge,” said Governor Ted Kulongoski in a press release. “I believe his service on the bench will be an asset to the citizens of Linn County and the State of Oregon.”

Egan received his bachelor’s degree from Willamette University and his JD from the University of Oregon Law School in 1985. He is a Marine and former president of the Oregon Trial Lawyers Association. As an attorney, his work focused on employment practices - representing injured workers and taking cases involving unlawful employment and discrimination practices.

Egan heard of McCormick’s and Baisinger’s retirements in April and began thinking of taking the next step. After speaking with partners in his firm and members of his family, he decided to move forward, submitting a judicial interest form to the governor’s office along with 14 others.

The forms were sent back to the Linn County Judicial Selection Committee, which is composed of attorneys from various areas of practice along with two judges, where the strengths and weaknesses of the candidates were discussed with a representative from Kulongoski’s office.

Egan formerly served on the committee representing civil law. He withdrew from the committee before announcing his intention to pursue a spot on the bench and was replaced by a new civil law attorney.

The governor and his legal counsel interviewed seven of the candidates, and appointed Egan to fill one of the vacancies until January. Egan will have to run in the November election to keep the position.

Rayfield said it was unlikely that someone would run against Egan as he would be running as an incumbent. He said it was more likely that other candidates would run for the additional open vacancy.

The other vacancy for the fifth seat will be filled by a candidate chosen in the November election by Linn County citizens. It will remain vacant until January when that candidate is sworn in.

Rayfield said he had reason to believe two of the other candidates might choose to run for the additional open vacancy, but did not feel comfortable giving their names.

Rayfield said that Egan’s experience in complex civil litigation was a unique strength that would make Egan an asset to the bench.

“Having a judge that’s really well versed in complex civil litigation is becoming more rare,” he said.

Egan’s partners are sad to see him leave the firm, and his children, one in law school and another a practicing attorney, are surprised, but they all are supportive of this new step in his career.

“To see me move to the bench was quite surprising, and they’re very happy,” Egan said.

Egan’s primary concern stepping into this position is seeing that the court finds a way to be effective in spite of budgetary concerns.

“Justice delayed is justice denied,” he said, quoting British Prime Minister William Gladstone. “We have to live within our budgetary constraints to allow expeditious and meaningful justice, and that’s going to be tough.”

BY SARAH ROSS

SALEM- After the legislature used stimulus dollars and other federal aid to balance the budget in February’s special session, Governor Ted Kulongoski is now turning to Congress again to fill remaining gaps.

Kulongoski wrote a letter to the state’s Congressional delegation urging the passage of two bills in Congress that would extend expiring medical assistance and bring more aid for educational jobs.

“But these cost-saving measures [budget cuts and salary freezes]will fall far short of covering the $560 million shortfall Oregon faces right now,” Kulongoski wrote. “With little left in our budget reserves, federal dollars will continue to be critical in our efforts to fund schools and serve the increasing numbers of Oregonians relying on the state for health care and other human services.”

Following the discovery of the State’s $577 million shortfall in the 2009-2011 biennium, Kulongoski asked each state agency to send him their plans for cutting 9% from each of their budgets for the time remaining in this biennium. These plans were returned to the Governor on Wednesday.

“Today’s plans represent the next step in this difficult process,” said Kulongoski. “There are no good answers and no easy solutions to the current shortfall. 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.”

Kulongoski is expected to finalize cuts in the budget for agencies toward the end of June when the Department of Administrative Services will “work with agencies to ‘unschedule’ funds in accordance with the 9 percent reductions.”

Speaker of the House Dave Hunt, D-Clackamas, released a statement saying the budget cut process will begin Wednesday and continue during the Legislative Emergency Board meeting on June 15. The June meeting will be used for legislators to meet with the Legislative Fiscal Office to go over the budget cuts and their expected impacts.

“The road ahead is tough. But just as we managed to fill a $4 billion budget hole in 2009, we’ll find a balanced path through this latest challenge,” said Speaker Hunt. “And we’ll do our best to continue creating jobs and protecting core services as we meet our constitutional obligation for a balanced budget.”

House Minority Leader Bruce Hanna, R-Roseburg, issued a response saying that balancing the budget will require “difficult and perhaps even unpopular choices.”

The Governor himself acknowledged that there will be layoffs and cuts in services to get the budget balanced again.

Instead of bringing the Legislature into a special session to rebalance the budget, the Governor decided to use his “allotment authority” to lower state spending. In addition to asking for a 9% cut across the board on agency spending, he also extended pay freezes for management and non-union government workers.

Still, House Republicans are not convinced by the Governor’s plan to act alone in fixing the budget.

“The Legislature can’t afford to wait for ‘further analysis’ or yet another taxpayer-funded bailout from the federal government,” complained Rep. Hanna. “We should immediately convene into special session, make the tough decisions, and re-prioritize spending to protect the most essential programs in education, public safety and human services from devastating cuts.”

The biggest cuts presented in these plans came from the Department of Education, with over $258 million in cuts, and the Department of Human Services, with over $158 million. These cuts would be so large because these are also the two biggest state agencies.

BY RACHEL CHEESEMAN

SALEM - The State Land Board, composed of Governor Ted Kulongoski, Secretary of State Kate Brown and Treasurer Ted Wheeler, voted unanimously Tuesday to authorize the initiation of rulemaking and the amendment of rules governing the leasing of geothermal resources.

Director of the Department of State Lands Louise Solliday explained that the rules hadn’t been updated since 1974 and were out of date in many aspects, from royalties and per-acre revenues to application requirements and processing.

“It’s just a lot of outdated requirements, so it’s just bringing them into the twenty-first century,” Solliday said.

A rules advisory committee will be created, including members from various state agencies such as forestry and education, along with industry representatives, to draft a new set of rules.

After this draft is completed, there will be a period for public comment and public hearing.

“We try to make folks broadly aware that there’s rulemaking going on,” Solliday said, explaining that notice of the public hearings will be announced on the department’s website, as well as on the Secretary of State’s bulletin.

The process, she said, can take anywhere from six months to a year.

BY RACHEL CHEESEMAN

SALEM- In response to the $560 million shortfall in Oregon’s state budget, Governor Ted Kulongoski plans to proceed with his “reset” by implementing a 9 percent budget cut across the board.

The governor said he is “not a fan of across the board cuts,” but they were the only option available, considering the magnitude of this year’s shortfall.

“I have learned – and am convinced – that in a situation like this, the best response is swift and decisive action,” Kulongoski said. “Difficult times call for difficult actions.”

The budgets for the Department of Education and the Department of Human Services will be cut by about $252 million and $154 million, respectively. In addition, the Oregon University System’s budget will be cut by about $31 million, the agency for community colleges and workforce development by about $20 million, and the Department of State Police by about $10 million.

The governor said that while many might expect him to call a special legislative session to rebalance the budget, he would not do so, saying it would be “pennywise and pound foolish.”

“The politics at this time is not conducive to people sitting down and making good policy decisions,” he said, referring to the upcoming election season.

Shortly after the governor’s announcement, Senator Ted Ferrioli, R-John Day, sent out a press release calling for a special session, saying it would be better to “do the job right with a scalpel” than let the governor cut the budget with a hatchet.

Senator Peter Courtney, D-Salem, who served in the Senate during past recessions, said that a special session would be effective only if there were more financial resources available in revenue, rather than relying almost entirely on the emergency, reserve and rainy day funds. Currently, the reserves contain about $175 million.

Rep. Dave Hunt, D-Clackamas, said more information about the impact of cuts on different agencies must be available before the allocation of reserve money can be decided.

“We have to assess the impact of these cuts and ameliorate the effects of the worst cuts,” he said.

Hunt even mentioned cutting funding for entire agencies to refocus dollars on the services they are intended to improve, naming the Commission on Children and Families specifically, which receives approximately $25 million.

“Those are the kinds of decisions we’re going to have to make,” he said.

The governor also announced that he intends to extend the pay freeze for state employees to June 2011 and asked the Public Employees Benefit Board (PEBB) to reduce its cost increases from 10 to 5 percent this year, saving about $50 million together. The governor said he hopes to “deliver savings while preserving as many jobs as possible.”

“A 9 percent cut is significant and will most certainly lead to layoffs,” Kulongoski said. “But layoffs should be the last possible alternative.”

Hunt said the legislature intends to maximize federal money and continue its “laser light focus” on job creation to minimize the negative effects of this budgetary shortfall and speed up the growth and recovery Oregon’s economy has been experiencing. While these growth rates have been a welcome change of pace for Oregon, they have not been enough to overcome the heavy blow dealt by the recent recession in the latest fiscal year.

“I think getting people back to work is the fundamental answer,” he said.

BY SARAH ROSS

SALEM- Governor Ted Kulongoski issued a proclamation Monday declaring May 10-14 “Hunger Awareness Week” for Oregonians.

In his statement, the Governor reinforced the work that his administration has done to combat poverty and hunger in Oregon and issued a call-to-action for the next administration to continue this work into the future.

The goals attained by the Kulongoski administration include stronger policies including universal health care for children, increasing tax credits for housing and grants for post-secondary education, and redesigning and reinvesting in the State’s food stamp program.

One of the products of the Governor’s work to combat hunger, he says, is the growing number of groups, such as churches, businesses and non-profits, which have partnered to contribute to the Oregon Food Bank Network.

“Because of many local organizations and thousands of Oregonians who volunteer in their communities, we have made progress and were able to support families and children through recent difficult economic times,” said Kulongoski.

Kulongoski ended his statement by saying, “My final call to Oregonians is that this work continues. Together, we can fight for a hunger-free Oregon.”

BY SARAH ROSS

SALEM-Governor Ted Kulongoski released a statement Friday announcing the appointment of former State Representative Bob Repine as the new acting Director for the Oregon Department of Energy.

Repine was serving as the Administrator of the Energy Development Services Division prior to his appointment. He will now, however, be replacing Mark Long as Director of the ODOE.

“From his previous experience as a small business owner and in state government, Bob understands the value, both in terms of economic opportunity and environmental quality, of the investments Oregon can make in energy conservation and renewable energy development,” said Kulongoski.

In his press release, the Governor stated that he has asked Repine to “enhance Oregon’s leadership role among states in growing a clean energy economy, building upon the work over the last year to better align agency programs and increase accountability.”