The budget released by the Co-Chairs of the Joint Ways and Means Committee today was short on details, but provided a framework for allocating the $14.65 billion the state is projected to receive in tax revenue over the next two years. The final budget must be balanced, and, at current spending levels, it is $3.5 billion short of that projected need if you just extended current state programs for another two years.
However, one of the most interesting aspects of what was released today was that it is a "revenue budget, not an expense budget." Usually, legislative budget leaders show how far short they will fall from being able to sustain programs. This time, they took expected revenue, plus some reserve funds, and prepared a budget based on that revenue total for 2011-13.
That represents a sea change in state policy and tends to reflect the Republican view that state budgets should be pinned to current revenue, not current spending extended by two more years and more taxes.
The budget allocates $5.7 billion for K-12 education, which is effectively the same amount K-12 had in the current biennium, and the budget leaders took some pains to indicate that they proposed more than Governor John Kitzhaber did in the budget he recommended on February 1. It could be the start of what has dominated past budget processes – competition between the Executive and the Legislative branches over how much to give K-12, as well as competition between Republicans and Democrats over who is being friendlier to schools.
Budget leaders also said what past leaders have said – the K-12 school budget will be the first enacted by this legislature. Time will tell if that becomes reality.
Interestingly, the Co-Chairs offered no insight on the budget for health care reform, saying they "support the efforts of the Governor, the Legislature, and the medical community to transform our Medicaid health care delivery system." The budget for the Oregon Health Authority and Department of Human Services may be left uncertain until after the May revenue forecast – and that means that human services could be end being the "balancer," which means it would be the last one cut to balance the budget.
The Co-Chairs rely on salary freezes across the three branches of state government for some of the savings. They also refer to "potential resources" for more revenue, which could mean the savings from a reduction in tax credits. A joint committee will begin the work this week of analyzing tax credits and tweaking the number and size of tax breaks the state gives to individuals and businesses.
Click here to download the Co-Chairs Budget