The real budget work now begins at the 2013 Oregon
Legislature with the release March 4 of what is informally referred to as "the
That document is the
proposed state spending plan from the Co-Chairs of the Joint Ways and Means
Committee, the budget-writing sub-group holds the monetary power in Salem. Much
more so than the governor's budget, it is the Co-Chairs budget that sets the
framework for Oregon's 2013-15 biennium.
Not unexpectedly, despite
the fact that this session's Co-Chairs are generally union-friendly Sen.
Richard Devlin (D-Tualatin) and Rep. Peter Buckley (D-Ashland), the proposed
budget relies heavily on cuts to PERS to balance its bottom line. Included in
their proposal is ending certain benefits for out-of-state retirees and capping
retirees' annual COLA increases. It appears the Co-Chairs budget targets
approximately $36,000 annually as the benchmark for capping retiree COLAs. Gov.
John Kitzhaber's budget document included a retiree COLA cap beginning at
Devlin's and Buckley's
proposal also incorporates some $300 million in PERS savings by re-amortizing
the 2008 PERS losses out on a longer payback schedule, a PERS-related idea that
K-12 schools are the big
winners in the Co-Chairs budget, allotted $6.55 billion — up almost a
full billion from last biennium. As the full budget details are released, that
could spell trouble for other state General Fund agencies, which includes the
Department of Corrections.
What happens next? There
will be lots of agency budget hearings — many are already underway
— and legislators eventually vote on all agency budgets individually.
However, the Co-Chairs budget serves as the overall framework and the agency
budgets cannot total more than their final number. All this will play out over
the next two months or so while lawmakers await the state's May revenue
forecast, which triggers legislators' final opportunity to tweak state budget
numbers before their anticipated late June/early July adjournment.
AFSCME AND OTHER MAJOR
UNIONS immediately released a joint
response to the Co-Chairs budget proposal. The text of the unions' response is
front-line, public safety and health care workers recognize that our economy
continues to struggle as a result of the recent economic collapse. We fully
appreciate the Co-Chairs faced tough choices in putting together a budget that
ensures that we can fund services that middle-class families and vulnerable
Oregonians rely on.
Research and election results
clearly show that Oregonians want legislators to prioritize schools, health
care, public safety and services to seniors and the vulnerable. They also
expect a shared sacrifice and want corporations and the wealthy to pay their
We are disappointed that the
Co-Chairs' proposed budget does not call upon corporations and the wealthiest
Oregonians, who have enjoyed almost all of the benefit of the economic
recovery, to do their part in funding schools, senior services and other vital
programs. It's unfair and irresponsible to balance the budget on the backs of
working Oregonians and on those who rely on services. Legislators should make
sure that those who've prospered even through this economic crisis are paying
their fair share.
It is extremely troubling
that the co-chairs budget breaks a promise to hard working, middle class
Oregonians and retirees on a fixed income. At the same time, the Legislature
recently bent over backwards — even calling an emergency session —
to be able to promise special treatment to profitable corporations like Nike.
The PERS proposal included
in the Co-Chairs budget is very similar to a 2003 proposal that was ruled
unconstitutional. This means that these dollars will likely never make it into
Oregon's classrooms or to other valuable programs.
Making matters worse, the
COLA proposal will cost the state millions of dollars to litigate and once this
proposal is found to be illegal — again — the Legislature would
have to rebalance the budget and slash funding for schools, health and senior
care, and public safety in the middle of the biennium.
It's important to remember
that every public employee group — teachers, public safety, health care
and other front-line workers — have taken pay cuts, furloughs and are
paying more out of pocket for health insurance. They are also doing more with
less. Class sizes are bigger. Caseloads are larger. Public employees, like all
middle-class Oregonians, are making sacrifices. Unfortunately, the Co-Chairs'
budget continues to ask working and middle-class families and the vulnerable to
carry all of the burden.
This budget appears to be
another way of scapegoating those with a target on their back: public
employees. We are now seeing the kinds of demonization of public employees here
in Oregon that were the foundation for what happened in Wisconsin, Michigan and
Ohio, where middle-class workers' voices have been silenced. We've seen clear
evidence of this trend through continued attacks on promised pensions, and
petitioners are now on the street with an initiative to put right-to-work on
We believe that we can do
better. The budget can be balanced in a way that is fair, sustainable and
prioritizes what Oregonians value. We call on our lawmakers to consider the
- Cut out-of-control tax breaks and make sure
everyone pays their fair share.
Oregon's corporate tax rate is tied for the lowest in the nation, and over
the next two years, Oregon is expected to give away more than $36 billion
in tax breaks. We need to do more to close loopholes and ask those with
the ability to pay to invest more before we ask teachers, front-line
workers and retirees on fixed incomes to shoulder even more of the burden.
- Make every dollar count. A report released by a broad coalition of 10
organizations identified $278 million in savings at state agencies by
increasing efficiencies and cracking down on tax cheats. These
recommendations should be exhaustively examined before seniors and the
vulnerable face cuts to services or attacks on their pensions.
- Pursue common sense, legal approaches
to PERS. Wall Street misdeeds
crashed our economy and significantly harmed PERS financial health. We are
now faced with having to clean up the mess made by bad-behaving investment
banks and others who abused our financial system. We should strive to
recoup losses from fraud caused by Wall Street. The Treasurer and Attorney
General have already recovered some of the money PERS was defrauded and
they should continue down this path.
in bringing certain financial and investment functions under the authority of
the State Treasurer, we can keep a closer watch on how Oregon's tax dollars are
invested, and we can significantly reduce wasteful spending on unnecessary fees
to out-of-state corporations who don't have any ties to Oregon.
can also realize substantial savings by having the PERS Board recapture the
loss from the malevolence of Wall Street in 2008 over a longer period of time
to help smooth the dramatic impact on schools, seniors and families.
- It's raining now. Our economy is slowly recovering from Wall
Street's illegal and irresponsible actions; we should use our reserves for
the purpose for which they are intended: preserving services when
Oregonians need them most.
There is a better way
forward. Before a single retiree has the rug pulled out from under her in her
golden years, we need to make sure that the wealthy and every corporation pays
their fair share. Before our teachers, firefighters and personal support
workers are asked to do more with less, we need to make sure that our leaders
are being responsible and efficient with our tax dollars. It may be a
challenge, but it's what Oregonians expect from their leaders.