Phil Barnhart,
State Representative,
Central Lane and Linn Counties
Last week the House had its first substantive debate of the Session about the budget shortfall affecting our children and especially the old and medically fragile. Speaker Minnis brought up her bill, HB 5075, to put back only $15 Million of the $311 Million that was cut when Measure 28 failed. I voted for the bill, which subsequently passed with only 8 negative votes. If passed by the Senate and signed by the Governor, it would theoretically restore funding for the State Police Crime Labs used by all the police agencies to solve crimes. The bill also would put back a portion of the funding for the Medically Needy program to prevent the most vulnerable from losing coverage and dying.
Last week we also got a new revenue estimate projecting an additional shortfall of $300 Million for the balance of the biennium ending in June. With only about three times that left in the total budget, this kind of shortfall promises a very bumpy end to the biennium. Despite the constitutional requirement that the state balance its budget by the end of the biennium, that is probably not possible now.
The State Economist has never faced a challenge like this one. All of his estimates for over a year have turned out to be wildly optimistic (too high) even while predicting less revenue than the prediction before. The legislature has been caught in the downward spiral between prediction and actual receipts for over a year. It is not over yet.
Rep. Minnis’ bill is likely to be caught in the downdraft. There simply is no money to fund it…
Heard on the Street: Someone is telling Oregonians that there is a huge reserve of funds that we could tap to balance the budget. Not true. The state has reserve accounts for PERS, SAIF, Low Cost Housing Bonds, and many similar dedicated funds. Some of these funds have very large reserves for necessary future payments. But these funds do not belong to the legislature and the legislature cannot spend them. Be very wary of the easy fix you hear. Anything easy at this stage about state finances is probably a misunderstanding or a bald face lie.
Heard in Committee: The Revenue Committee of the House has had a series of very boring but very important bills. One very bland looking bill we dealt with last week is really a shocker. HB 2135 updates the 1915 law instructing the State Treasurer how to handle a debt when the Treasury is dry. The bill is very straightforward and fairly simple. It is not until we wonder why it came up now that the shock sets in. Someone thinks that there is the chance that the general fund will run out of money to pay the state’s bills. It might.
Last Word: Representatives and Senators are hunkering down for a long and difficult session and more bad news. PERS reform is moving along. There is a mood in the Capitol to put aside differences and get the work done. The damage that the budget shortfall could do is simply too awful for anyone here to be preoccupied by anything else. I expect some coalitions to begin forming around possible solutions in the spring.
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Rep. Phil Barnhart can be found at room H-477 at the Capitol on weekdays. Capitol phone: 503-986-1411, District phone: 541-484-5119, email: [email protected], web site: http://www.PhilBarnhart.com. When contacting Phil include your address and phone number so that he can contact you.