Budget Cuts: Will You Feel the Impact? ...and When?

The longer we go in this legislative session, the more information we know about the depth of state budget cuts.

It won't be a pretty picture and, no matter what your philosophical bent is – conservative or liberal or in-between – you and/or family and friends are likely to feel the impact.

That's because state personal and income tax money essentially goes to fund four state government programs: K-12 education, higher education, public safety (read cops and prisons) and social services (read programs from the cradle to the grave).

Put another way, you could cut out every other state program and you wouldn't balance the general fund budget.

Consider these recent developments that put cuts into a bit more perspective:

  • Salem-Keizer Schools, with its typical reliance on staff, including teachers, said it might have to layoff as many as 100 classified staff, 200 teachers and a number of administrators.
  • "Type B" rural hospitals could be in for reductions under Medicaid that could threaten the future of those hospitals. Now, under a specific state law, they get full cost reimbursement under Medicaid, but a Senate committee is considering legislation that would impose stiff reductions.  No one knows where the "saved" money would go.
  •  In the overall Medicaid program, those who provide services to low income clients – hospitals, doctors and others – would see their reimbursement tumble even farther below cost, which would have the effect of shifting the burden onto the backs of those who now pay insurance coverage. At the very time when the public is concerned about health care costs, state government is considering putting even more burden on insurance premium payers.
  •  Providence Child Center for the Medically Fragile stands as the only facility of its kind in Oregon – as well as the region – that cares for profoundly disabled children in a "pediatric nursing home setting." The most powerful advocates for this facility are the parents of the children in the Center who have nowhere else to turn. But, under the new budget for 2011-13, the Child Center would see its reimbursements cut by more than one-third, risking some of its ability to continue providing care.

We've known for some time that the supreme test for the new governor and this legislature is simple: How to make the deepest cuts in recent budget history while trying to do the least harm.

Some observers will be careful to tell you that, overall, state government will have more money on a straight-line basis (without allocations for inflation, caseload increases in a down economy or any other increases in the cost of doing basis) in 2011-13 than it had in 2009-11. True.  

In fact, the governor himself made that point when he developed his Recommended Budget for 2011-13 as he focused on the straight-line increase, $1.2 billion, rather than what has come to be known as the "continuing service level" or "essential budget level" gap, an estimated $3.5 billion.

Whatever your perspective, tough times ahead.

Footnote:  It should be emphasized that CFM represents some Type B hospitals, hospitals and insurers that provide Medicaid services, and Providence Child Center.