Tough Decisions

Tough budget decisions are likely following the new state revenue forecast to be release next week. Governor Brown expects the state may face more than $3 billion lost due to the COVID-19 pandemic.

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A dark forecast is emerging concerning Oregon's financial future.

“Let me just start by telling you that the state is in for an unprecedented decline in our state fiscal situation,” State Senator Johnson told the Rainier Chamber of Commence on Thursday, May 14 during an online meeting.

“We are going to be down on the 20th of May when the revenue forecast comes out somewhere between two and a half and $3 billion,” Johnson said.

State economists release the Oregon Revenue Forecast quarterly as a key guide used by the governor and state legislators to direct state agency spending. The forecast is also a critical tool for Oregon school districts, cities and counties as they prepare their annual budgets that depend on state revenue for public services.

The latest state revenue forecast is scheduled to be released on Wednesday, May 20.

Governor Kate Brown has said she expects the state may face more than a $3 billion budget shortfall, primarily triggered by the coronavirus pandemic, which forced a virtual shut down of the Oregon economy.

Brown has directed state agencies to prepare their budgets with a 17 percent reduction.

“The challenging result of this negative impact on our economy is that we are going to have to figure out what to do with the state budget with businesses virtually shut down, travel suspended, jobs lost," Johnson said. "Even with the happy news that Northwest Oregon counties have now been approved to reopen, we expect that the revenue that the state receives to fund state services is going to be significantly reduced."

To balance the budget, Johnson said the state does have a few options, including what Johnson called “federal survival funds.” Another option would be budget cuts.

“The practical effect of that is that when you cut a two year budget that is nearly halfway through, it equates to much more significant cuts,” Johnson said.

Johnson is one of three co-chairpersons leading the Oregon Legislative Ways and Means committee which coordinates the state budget. 

Staffed by the Legislative Fiscal Office, the Joint Committee on Ways and Means is the legislative appropriations committee that determines state budget policy. It is a large committee of both Senate and House members and which employs six to eight subcommittees to facilitate adoption of a biennial budget.

The Ways and Means Committee has scheduled an emergency meeting for Friday, May 15.

“I still don't know what's on that agenda," Johnson said. "And I'm struggling to get information from our presiding officer. We're going to spend over a billion dollars tomorrow and I don't have a clue what the details are, which is just beyond annoying. I think it's irresponsible."

Johnson said beyond the emergency Friday meeting, there is a long road ahead for getting Oregon’s economy back in shape.

“Am I still supportive of trying to get Oregon's economy back up out of the ditch? You bet I am," Johnson said. "But because of the lack of guidance at the state level, we’re struggling harder than I think we ordinarily would.

Follow this developing story here online and in the Wednesday print editions of The Chronicle.

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