As we close out 2011 and look forward to 2012 there are many critical issues which may see significant changes in the months ahead. Major reforms are being developed for education, public safety and health care at the state level and proposals in each of these areas may be submitted to the Oregon Legislature when the month-long session begins in February. I realize change is never easy, but I am cautiously optimistic about what's ahead for our state.
For education, lawmakers gave Governor Kitzhaber the green light to start working on a plan to better coordinate academic services pre-kindergarten through college under the umbrella of a new Education Investment Board. The intent is good and the Governor talks about "streamlining" and "consolidating" programs for efficiency and saving taxpayer dollars. However, I fear there will be more bureaucracy created with a new education czar in addition to allowing each university to have their own governing board.
The Governor also has a Commission on Public Safety looking at suggestions for how to save the state money. We know Oregon's prison costs are higher than other states, but our violent crime rate has dropped in recent years. I worry about more Oregonians being victimized by the bad guys if we don't maintain a strong system for punishment.
This year the legislature called for a comprehensive review of the way the state provides health care services to low income residents and penciled into the current 2-year budget an estimated $240 million in savings from a new Health Care Transformation effort. If you want to share your thoughts on this topic there is a legislative hearing on December 20th at the State Capitol. This is a massive undertaking and there are many unanswered questions. I also agree with my friend Senator Jason Atkinson in his recent commentary that there are too may task forces driving our policy decisions at the state level. (Click here to read more)
Oregon's economy is not improving as many had predicted which means the state budget will dominate discussions for the upcoming February legislative session. The hunger rate in Oregon remains high, more Oregon homes are going into foreclosure, and federal programs to help low-income families with winter heating assistance are getting cut. The sluggish economic conditions are even hurting our ability to make road improvements - see story below.
The latest forecast for the state budget shows $300 million less in tax and lottery revenue than was projected to pay for critical services over the next couple of years. In fact the Governor is planning ahead in case things get worse, asking state agencies to come up with lists of services they would cut if they had to reduce their budgets by 10%. The small amount the legislature set aside in reserves may be used up quickly in February and there are still many outstanding budget holes to fill as I mentioned before.
For those who think raising taxes is the answer I have news for you. Not only is it a bad idea to try to tax our way out of a recession, but the revenue generated from the last round of tax hikes didn't fulfill promises made by supporters. A new report from the Legislative Revenue Office indicates Measure 66 for higher personal income taxes produced less than 70% of the money originally expected two years ago. The companion Measure 67 on corporate taxes also fell short. One small bit of good news is the tax rate under Measure 66 will drop slightly next year, but will still be 10% higher than before the new law took effect and remains one of the highest in the nation.
The bottom line is the current level of state spending is unsustainable. Oregon's economy and families can't afford to be all things to all people. Something has to give. Non-essential programs need to be put on hold. And to assist those in need, I encourage you to consider donating to a worthy charity this holiday season or find another way you can help those less fortunate.
Finally, December is National Impaired Driving Prevention Month and Mothers Against Drunk Driving is asking all of us to be safe on the roads. A new law I helped pass to reduce the number of repeat drunk drivers in Oregon takes effect next month along with several other changes adopted by the legislature. But there is still much more we can do to combat this problem.
I hope you have a very Merry Christmas!
