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 (Les AuCoin), 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.  I could have called this blog “Middle Ground,” for that is what I long for in both politics and golf.  The middle ground is often where the best public policy decisions lie.  And it is where you want to be on a golf course.

Whether you agree with all of her proposals or not, it should be noted that Governor Kate Brown met her obligations to produce a new two-year set of budget recommendations on time.

The deadline was yesterday, December 1, and she met it.

A two-year set of spending proposals for the 2021-23 biennium represents the starting point for the 2021 Legislature as it meets for about six months in Salem starting officially in January, but, in fact, around February 1.

As I wrote yesterday, the biennial budget recommendations were a focus of my interest for about 40 years, first as a state government manager for 15 years and then as a state lobbyist for 25 years.

The reasons:

• With a nearly $30 billion proposed spending blueprint over two years, governor’s recommendations represent what the individual in the state’s highest political office thinks and values.  So, the proposals are more than just a set of numbers; they are a set of public policy prescriptions.
• Income taxes provided by citizens and businesses support four main state government spending categories – K-12 schools, higher education, public safety (including prisons and cops), and social programs (including health care for low-income Oregonians).  All are very important for the future of the state.
• Reviewing the budget recommendations was a way for me to know whether a governor had lived up to his or her charge, which, I believe, is to develop a spending blueprint for two years WITHOUT new, proposed taxes.  In other words, what would it cost to run government for two more years, including inflation and caseload growth?  That way, the Legislature would have a real chance to decide whether it agreed or not.

At first blush, it appears to me that Brown met what I consider to be this obligation.

I suspect there is little question but that Brown, in her last two years as governor, will want tax increases.  She will have to propose those to the Legislature and, with super-majorities of Democrats in both the House and the Senate, she may see them enacted.  And that would likely set up major campaigns at the polls if business is asked to absorb new taxes and opposes the impact, even as virus recovery presumably will be under way.

Okay, let me stop there, except to reprint what my colleagues in my old firm, CFM Advocates, wrote last night about the budget recommendations.  The memo to CFM clients contains good and solid information.

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Governor Kate Brown kicked off December by releasing her proposed 2021-23 Governor’s Recommended Budget (GRB), which includes $25.6 billion in total spending, an 8 per cent increase from the current biennium.

Lawmakers will use it as a starting point to hammer out the state’s official budget during the upcoming 2021 Legislative Session. Brown’s budget proposes the closure of three state prisons while reducing support for healthcare services.

In a press release outlining her budget on Tuesday, Governor Brown emphasized that each area of the budget was formulated with an emphasis on racial equity.  

The budget relies very heavily on the hope that Congress will pass an additional coronavirus relief package soon and send revenues to bolster states battling the pandemic. Federal aid would be used to fill funding shortfalls in the Oregon Health Plan, increase Covid-19 testing, support ailing businesses and allow the state to forgive nearly $350 million in unpaid rent. 

While expectations were grim, recent forecasts show revenue collections remaining steady despite the economic shock associated with the pandemic.  Despite job losses, average income levels have remained balanced.  In a state where personal income taxes provide the lion’s share (88 per cent) of revenues, Oregon’s coffers have not yet taken a significant hit.

However, consumer spending linked to the $14 billion influx of federal aid into Oregon’s economy, which is expected to be reduced over the coming months, paints a cloudy picture for revenues heading into the 2021-23 biennium.  

Healthcare
As a result of the pandemic, many more Oregonians have signed up for the Oregon Health Plan, resulting in a $718 million budget gap.  In her budget narrative, Governor Brown implores Congress to provide substantial federal stimulus dollars make up for the shortfall.

Despite hospitals and health care advocates fighting successfully at the November ballot to pass Measure 108, raising hundreds of millions of new revenue for Oregon’s Medicaid plan through an increased tobacco tax, the GRB ignored that contribution and sought additional reductions on the system protecting Oregonians against the COVID-19 pandemic. 

The GRB also seeks over $20 million in reductions to Oregon’s Coordinated Care Organizations, the backbone of care for vulnerable Oregonians.  Such a reduction will end up hurting doctors, nurses and care providers around the state as reimbursement rates are slashed to compensate for the reduction.  These are the front-line workers managing the pandemic and may raise significant concerns with lawmakers over this recommendation. 

Wildfire Recovery
In 2020, over a million acres and over 4,000 structures burned in wildfires across Oregon.  Brown’s budget calls for nearly $360 million to rebuild Oregon communities devastated by the Labor Day wildfires.  It also includes $73 million for wildfire preparedness, response and prevention.  

Education
While Oregon’s K-12 school funding receives a historic $9.1 billion for the next biennium in the GRB, that may not meet the state’s current service level roll-up costs.  The budget as outlined could lead to reductions in teachers or increased class size. 

Business and Labor
Businesses impacted by the pandemic and subsequent shutdown orders are not provided direct assistance in the proposed budget, and Governor Brown again calls on relief from the federal government.

Recognizing that many businesses are leaning heavily on virtual or online methods to stay afloat, the budget proposes $118 million for investment in broadband for rural and urban communities. 

Housing
The proposed budget would increase funding for housing and homelessness by $66 million and direct $17.9 million toward protecting seniors in assisting living and nursing homes from COVID-19.  It also includes $20 million in homeowner assistance and invests $250 million toward affordable housing development.

Enough. 

Except to emphasize that the governor has taken on a huge issue by proposing to close three of Oregon’s 14 prisons, albeit minimum security facilities.  She’ll face push back from legislators who represent the locations of those prisons (North Bend, Salem and Lakeview).  Lawmakers believe the prisons provide important jobs in their communities.  For her part, the governor said corrections policy should control the issue, not jobs.