Budget Issues Still Dominate After Session Adjourns

Balancing the budget was the dominant challenge in the 2011 legislative session. It still is an issue today as one Ways and Means leader underlines potentially shaky assumptions that underlie the state's balanced budget for the next two years.

Rep. Dennis Richardson had a hand in crafting the state budget but sees flaws in it.Rep. Dennis Richardson, R-Central Point, as House co-chair of the Joint Ways and Means Committee, was in the back room as budget decisions were made during the session. His recent newsletter says: "To reach a compromise between the Republicans and Democrats of both the House and Senate, so that a budget could be passed, we chose the road of 'assumptions.'"
Richardson rates five of them as risky:

• Assuming that $239 million of savings will be identified by the Oregon Health Authority’s health transformation initiative.

• Assuming that $51 million of savings will be identified by the Department of Human Services’ long-term care transformational initiative.

• Assuming that $28 million will be saved by the Department of Corrections in “unspecified reductions."

• Assuming that $19 million will be “loaned” from the Common School Fund to the Senior Property Tax Deferral program; the loan will need to be paid back before the end of the 2011-13 biennium, yet there is no source of revenue identified from which to fund the pay-back;

• Assuming that $310 million from the ending balance will be allocated in the February 2012 session to avoid 7 per cent of additional cuts in agency and program budgets.  

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Standing in the Way of Adjournment

As legislators continue to push for adjournment, which could come as early as June 17 or 18, several issues stand in the way.

• GENERAL FUND BUDGETS:  So far, only one major general fund budget – the K-12 schools budget – has cleared the legislature. And, even there, House Democrats are pushing for more school funding out of the Education Stability Fund to cushion the blow of teacher layoffs and school closures.  Budgets for human services, higher education and public safety should begin moving through Ways and Means subcommittees this week to meet the  leadership-imposed deadline of June 7 to act on all state budgets.

• HEALTH CARE FUNDING CONTROVERSIES:  The health care budget has been particularly controversial. Four legislators – Senator Al Bates, D-Ashland, Senator Betsy Johnson, D-Scappoose, Rep. Tina Kotek, D-Portland, and Rep. Tim Freeman, R-Roseburg – have been negotiating with leaders of the Oregon Association of Hospitals and Health Systems (OAHHS) to increase the hospital tax, reducing deeper cuts in the state's Medicaid budget. They agreed to impose a tax increase, which can be implemented without legislative action by the Oregon Health Authority.

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Election Implication: Oregon as Health Care Laboratory Faces Uncertain Future

Governor-Elect John Kitzhaber, once an emergency room physician, may create a laboratory for health care reform in his new administration.A couple of years ago, the Oregonian editorialized in favor of Oregon "being a laboratory" for innovative health care reform in much the same way as happened when John Kitzhaber was governor.

Does that prospect still hold in the aftermath of the November election that will change the political landscape in Salem? The jury is out.

Here are some questions about the unknown future:

• What type of role will Governor-Elect John Kitzhaber play? During his 16 years of his previous state service, first as Senate President and then as Governor, he focused on health care, including with the then-innovative Oregon Health Plan. The demands of his office this time around – prodding economic recovery around the state – might get in the way of health care policy.

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