Wednesday, May 26, 2010

State of Oregon on the road to another Greece ?

Yesterday and today most newspapers in the state of Oregon led with this story:

"Triggered by tax collections projected at a half-billion dollars less than expected, Gov. Ted Kulongoski ordered state agencies Tuesday to prepare spending cuts of 9 percent to balance the state budget."

However, I recived this email which has the rest of the story:

Keep in mind that when the folks in Salem start calling press conferences to lament a $560 million budget cut prior to June 2011, it isn't a real cut. They are not proposing cutting spending below levels of the last budget. They are proposing cutting projected spending planned in the current budget. They will still be spending more than they did in the last budget cycle.
Furthermore, the state budget for 2009-11 projects 50,970 state employees. The prior budget was 49,518. So, when the governor talks layoffs he is talking from the higher number.

When the governor says he wants to cut spending across the board, across all programs to avoid a special session why should he get away with that? If the Legislature adopted new programs then the Legislature should be called back into session to back out of those programs thereby spreading the budget across the pre-existing programs.

Oregon Biennium--Total All Funds spending

2009-11----$53,760,031.018----- 9.38%
proposed before they had the revenues in hand.

2005-07----$43,220,555,200 ----11.56%
2003-05----$38,743,009,114 -----9.11%
2001-03----$35,508,990,712 ----16.57%
1999-01----$30,462,319,439 ----11.55%
1997-99----$27,308,692,023 ----17.62%
1995-97----$23,218,655,377 ----15.85%
1993-95----$20,042,060,862 ----12.18%
1989-91----$15,174,994,031 ----20.72%
1987-89----$12,570,014,958 -----4.23%
1985-87----$12,060,094,718 ----17.97%
1983-85----$10,223,173,163 --- 14.34%
1981-83-----$8,940,741,798 --(-10.88%)
1979-81----$10,031,862,751 ----35.08%

Until Oregon like Greece, gets a grip on their public employee benefits, Oregon will not be able to deal with it's growing budget problems. Last year President Obama through loans from the Chinese was able to funnel money to Oregon and other state governments through the "stimulus bill" so the states would not have to make the hard choice as a pay off to the the public employees unions who are a big part of his election coalition. PERS ( Oregon Public Employee Retirement System) is a huge burden on Oregon's state and local governments which allows public employees to retire much earlier than those in the private sector with monthly payment that are close to what they were receiving when they were working. As a result, those of us who work outside of government are saddled with increased taxes and decreased benefits of our own. During this recession those of us in the private sector have made major cuts in our budgets and I am not talking about just a decrease in the increase but real budget cuts. Unfortunately I do not see an end to the recession and things will get worse before they get better. Public employees work hard, as we all do, but they cannot be insulated from the hardships we all must endure in this time of crisis.