PERSPECTIVE FROM THE 19^TH HOLE: This is the title I chose for my personal blog, which is meant to give me an outlet for one of my favorite crafts – writing – plus to use an image from my favorite sport, golf. Out of college, my first job was as a reporter for the Daily Astorian in Astoria, Oregon, and I went on from there to practice writing in all of my professional positions, including as press secretary in Washington, D.C. for a Democrat Congressman from Oregon, as an Oregon state government manager in Salem and Portland, as press secretary for Oregon’s last Republican governor (Vic Atiyeh), and as a private sector lobbyist. This blog also allows me to link another favorite pastime – politics and the art of developing public policy – to what I write.

In a way, the next big thing for state government has already started even as the first big thing – the coronavirus pandemic – continues.

What is the next big thing?

It is a huge threat to the State of Oregon government budget, which is heavily tied to personal and corporate income tax revenue.

In this blog, I set out to achieve two objectives: First, to summarize aspects of the “next big thing,” and, second, to propose a list of questions public officials should ask as they chart a new budget path.

Before long, we’ll get confirmation of the huge hole in tax revenue due to the economic shutdown.

Governor Kate Brown already has directed state agencies to prepare for almost $2 billion in cuts of “general funds” (income tax revenue) for the current two-year budget cycle.

In a memo issued to agency directors, the state’s chief financial officers directed agencies to submit plans for 8.5 per cent cuts in their general fund spending for the two-year budget cycle, a scenario that would reflect what budget officials believe is likely a worst-case outcome for the current two-year budget cycle.

Agencies funded by “user funds” also will be involved in the budget-cutting exercise (see below).

So, the hit will fall on the K-12 education funding, Higher Education, the Department of Human Services, the Oregon Health Authority, the Department of Corrections, the Department of Transportation and Travel Oregon, among others.

According to Oregon Public Broadcasting, the governor’s order — the most notable cost-cutting step Brown has taken to date — occurs against a dramatic change of fortunes for state finances. As recently as March, forecasters anticipated the state would bring in $1.15 billion more than what it planned to spend in the current budget.

That was before the COVID-19 pandemic forced major hits to some of the state’s largest revenue sources: Income and business taxes that make up the vast majority of the state’s general fund, lottery revenues decimated by bar and restaurant closures, taxes on fuel and heavy trucks, and user fees that benefit a range of different agencies.

“Clearly the state budget will take a hit, just like all private sector businesses have taken a hit to their revenues [and] workers have taken hits to their paychecks,” according to Josh Lehner, Oregon state economist. “That translates even more than one-for-one into reductions in-state resources.”

The prospect of state budget cuts arise against a backdrop of consideration in Congress to make grants to local government in the next round of coronavirus relief. But, regardless of the extremity of the circumstances in many states, including Oregon, action by Congress is far from assured.

It is bound up in tension between Democrats and Republicans — Democrats want relief for local governments; Republicans want liability protection for businesses.

Never the twain shall meet, though it could be possible for both sides to get at least a measure of what they want. Call it compromise.

Agencies in Oregon outside the general fund will not be immune from budget cutbacks. For instance, the Oregon Department of Transportation, which relies on fuel and heavy trucks taxes for much of its funding, said in a recent report that an ongoing steep reduction in driving could result in a $120 million hit to the State Highway Fund.

Meanwhile, cuts are going to be far steeper at Travel Oregon, a semi-independent agency that relies on the state’s transient lodging tax for nearly all of its funding. With travel and tourism halted in the pandemic, stays at hotels and vacation rentals that pay the tax are plummeting, and the speed of any rebound is uncertain.

So, against this formidable backdrop, even as the phase of government shutdowns could be abating just a bit, here are three questions public officials should ask as they face the budget challenge.

Do so, perhaps in special legislative session (which has not yet been called), could avoide just a flat, across-the-board approach.

What is the specific problem a budget line item is supposed to support?

This question is seldom raised or even discussed. Yet, it should be, especially now. Too often, it has been business as usual. But, if the cuts are deep enough – and they will be — the reality will call for asking this hard question, as well as answering it.

Is there an appropriate role for government to play?

This is an even more basic question that tests another often-ignored issue.

If there is a role for government, what does the state expect to get for the money it spends? In other words, what is the expected return on investment?

Return on investment often is a foreign concept in the halls of the Legislature. But, even more, amidst the coronavirus pandemic, the question is worth asking. What results are programs supposed to achieve? And, if they don’t produce those results, cut them.

Answering these questions won’t remove the pain of budget cutting, both for state government employees, school district employees, the kids they teach, and Oregonians who depend on state services. But, answering the questions well and candidly will be critical as the state charts a new budget course, one that contemplates a reduced role for state government.

That reduced role is an obligation because, when the day is done, in contrast to the federal government, state government must operate within a balanced budget.