With a big budget hole to fill, governor calls for belt tightening

Stacks of Gov. Kate Brown's budget sit outside her office in the Capitol, Thursday, Dec. 1, 2016. As a choir sang holiday music in the rotunda, the governor's budget proposal contained cuts she did not find as festive. (Photo: Steve Benham/KATU.com Staff)

With a $1.7 billion budget hole to fill over the next two years, Gov. Kate Brown on Thursday released a budget she said contained a level of cuts she finds “absolutely unacceptable.”

She framed her proposed $20.6 billion general fund/lottery funds budget as only a short-term solution and a starting point, but still focused on funding health care, housing, education and job creation.

“I had to make some very difficult decisions in order to protect the core programs that make a difference in the lives of Oregonians,” she said during a news conference in her ceremonial office in the Capitol.

Still, she said her budget invests a “record-breaking” $8.6 billion in early childhood education and K-12 schools, but it keeps the service level funding for those things flat.

Additionally, higher education would be funded at the same level as in the last legislatively approved budget in 2015.

She did propose investing about $350 million in capital projects for higher education, however.

On health care she said about 95 percent of Oregonians are now covered by health insurance, but she said she’s aiming for 100 percent.

“We’re not going to stop until every single Oregonian has health coverage,” she said, adding that in her budget she’s unwilling to reduce the number of people covered and the level of service they receive.

To save money, she called on state managers to delay filling vacant positions and eliminating non-essential travel.

Slated for elimination would be an Oregon Health Authority facility in Junction City and an Oregon Youth Authority facility on the north coast.

RELATED: Governor proposes closing new Junction City campus of the Oregon State Hospital

There would also be cuts to natural resource agencies and programs for vulnerable populations.

“This is both unavoidable and absolutely unacceptable,” Brown said.

To raise money she proposed such things as increasing the tobacco tax, increasing some taxes on hospitals and insurance companies and closing loopholes in the tax code.

And to help rural Oregonians, Brown said she wants to invest in infrastructure, transportation, water projects and upgrading fish hatcheries.

The budget shortfall is being driven by the planned drying up of federal funds to implement the Affordable Care Act, the unfunded liability of the PERS system and voter-passed ballot measures that direct the state to spend on veterans services, career and technical education and the Outdoor School program.

In response to the governor’s proposed budget, Republican House Minority Leader Mike McLane said the situation the state finds itself in was preventable and that state spending is unsustainable.

“Despite record revenues and despite what has been described as a roaring state economy, we are being told we don't have enough tax revenue to cover the tab,” he said in a statement.

The Legislature will convene in February of next year to debate Brown's budget and decide what it will keep, change or discard.

Watch Gov. Brown's new conference on the release of her proposed budget:


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