Governor Kitzhaber unveiled a budget proposal today that he called "first and foremost an education budget." He said his budget "creates space for front-end investments in education and early learning by cutting back-end spending on health care and corrections."
His 2013-15 budget, which was previewed by The Oregonian and Salem Statesman Journal today, puts controversial changes to the Public Employees Retirement System (PERS) squarely in the center of an effort to carve out more money for schools. And that could bump into political resistance from the newly Democratically controlled House.
Despite that, the atmosphere in the state Capitol was markedly different than in Washington, DC, where partisan wrangling continues over how to avoid plunging over the so-called fiscal cliff. While there is no looming fiscal cliff here, the governor's budget will only serve as the framework for the 2013 legislature to hash out a final budget with Democrats at the controls in both the House and Senate.
Senator Richard Devlin, D-Tualatin, already named to be Senate co-chair of the Joint Ways and Means Committee, was charitable toward the governor, as quoted in the Salem Statesman-Journal. "I appreciate the governor's candor about the specific challenges we face in funding education and the Oregon Health Plan in the next biennium," Devlin said. "With his recommended budget, Governor Kitzhaber has provided a good starting point for the budget negotiations ahead of us."
New House Republican Leader Mike McLane, R-Powell Butte, praised Kitzhaber for addressing PERS, but questioned the rosiness of revenue projections and the lack of any fund reserves to cushion the budget in case the economy falters in the next two years.
The governor's plan for more money for K-12 schools rests on the premise that the legislature will accept his recommendations to reform PERS in two ways:
• By limiting cost-of-living increases to the first $24,000 in retirement income; and
• By closing a benefit loophole for out-of-state retirees.