Senate Republican Office Oregon State Capitol 900 Court Street NE, S-323 Salem, Oregon 97301 Editorial: Prudence in budget plan Albany Democrat Herald April 1, 2011 Leaders of the legislature’s budget committee have taken a prudent approach to the state spending plan for the next two years. After the plan came out Tuesday, news reports referred to deep cuts in some programs, but overall the spending plan is a little higher than what we’ve had, at least concerning the funds over which the legislature has control. Based on the latest available revenue forecast, the budget panels co-chairmen are proposing a general and lottery fund of $14.6 billion, up from $14.2 billion in the budget as amended by the legislature in 2010. If cuts in programs are necessary, and evidently they are, it’s because the last legislature used a gusher of federal grants to supplement the state’s own money, and because costs are projected to keep going up while federal help has shrunk. Reports from Salem still talk of a budget gap of more than $3 billion. That refers to the difference between the money available and the state government’s expenses if they are routinely rolled up, as they have been in the past. But the state can’t budget the way it used to, routinely accepting higher expenses and spending all the money it has. Remember that Governor Kitzhaber himself presented a balanced budget in which that theoretical gap was wiped out. The budget plan outlined by the co-chairmen of the Ways and Means Committee does not propose to spend all the money the state expects to take in, even though all programs can make a case for spending more. They don’t know if the recession is really over or if we face another one because of the price shock in oil. So they want to leave a prudent reserve, about $400 million. Holding the line in state spending is not a foreign concept to a lot of Oregon residents, even those who have come to depend on state services. Now that they’re making out their income tax returns, people who still have jobs are being reminded how much their wages shrank last year. So far, the recovery in wages and in the economy in general is weak. That’s the reality the state budget planners must face, and their blueprint shows that they have. (hh)