Oregon Governor, Senate President and Speaker Outline Process to Address September Revenue Shortfall,

Salem – Today Governor Ted Kulongoski, Senate President Peter Courtney and House Speaker Dave Hunt outlined a process to rebalance the state budget after the State Economist reported a $377.5 million dollar shortfall in the September revenue forecast for the current 2009-11 biennium.
With the recent federal assistance, the Governor, Senate President and Speaker assured school districts that additional cuts to K-12 as a result of the forecast will not be necessary and pledged to maintain funding at the June level of $5.756 billion for K-12 education.
“With school about to start, we want to assure Oregon families and their school districts that even with this revenue shortfall, there will be stability for school budgets, while also maintaining a responsible level of reserves for the last three quarters of this budget period,” said Governor Ted Kulongoski.
In addition to the $118 million in federal assistance recently approved by Congress, the Governor, Senate President and Speaker agreed that in order to protect schools, approximately $34 million of the state reserve funds will be committed to K-12 when the legislature convenes in February 2011.
After this commitment to schools, approximately two-thirds of the State Education Stability Fund and Rainy Day Fund will remain in savings to address the uncertainty of the last three revenue forecasts of the 2009-11 biennium.
“It’s raining. It’s clearly the right time to use the rainy day funds we’ve set aside to protect kids, services for seniors and vulnerable Oregonians to help them through this global recession,” said Speaker Hunt (D-Clackamas County). “We are continuing to provide services for more Oregonians with less resources.”
"We're putting the priorities of Oregon families at the front of the line. Our plan keeps the doors of our schools open and the gates of our prisons closed. It maintains care for our senior citizens, assistance for people with disabilities and healthcare for our most vulnerable," said Courtney (D-Salem/Gervais/Woodburn). “We have taken a deliberate and cautious approach and achieved these priorities without the need for a special session.”
In addition to protecting education, the Governor, Senate President and Speaker outlined the following next steps to bring the budget into balance:
• The Governor will utilize his statutory allotment authority as provided under ORS 291.261 to make additional across the board cuts.
• The Governor will ask state agencies to begin developing plans to implement the cuts needed to rebalance the budget for the remainder of this biennium, which amounts to 8% reductions with 9 months remaining in the 2009-11 biennium.
• Through the bipartisan Legislative Emergency Board and the 2011 session, funding will be restored to maintain K-12 schools at their current funding level; maintain critical services for our seniors and vulnerable Oregonians; protect public safety and prevent prison closures for the remainder of the current biennium.
“This plan is fiscally responsible, provides stability and certainty for Oregonians and does not require a special session,” Governor Kulongoski said.
Information about cuts to specific agencies, the cost of the services the E-board will restore and the exact sequence of events will be determined prior to the E-Board meeting on September 23.