Oregon Public Broadcasting

Beth Hyams: While Oregon faces a challenging budget year, policy-makers are warning of similar fiscal shortfalls in the years to come. But Oregon isn't the only state facing such challenges.

A national gathering of state budget officers wrapped up in Portland today. Reporter Chris Lehman listened in on a few sessions this afternoon and joins me in the studio.

Hi Chris.

Chris Lehman: Hi Beth.

Beth Hyams: So Oregon isn't alone?

Chris Lehman: That's right, Oregon budget writers had plenty of shoulders to cry on this week. Just about every state has some tale of fiscal woe right now.

Beth Hyams: And what did those budget writers hear this week about the economic outlook for state governments.

Chris Lehman: On the one hand, they heard that the recession has bottomed out and things shouldn't get worse. But on the other hand fiscal analysts told them things aren't likely to get better very fast, either. When it comes to economic growth, the term used was "lackluster."

Beth Hyams: But states like Oregon have managed to make it through so far without wholesale slicing and dicing of state government. Will that continue to be the case?

Chris Lehman: Oregon along with other states received a healthy dose of federal stimulus money and many states including Oregon used that cash to balance their budgets. There's no indication right now that that money is coming back. So that means tough choices lie ahead.

I spoke with Scott Pattison, the executive director of the National Association of State Budget Officers, which organized the conference. He said the next few years could try the patience of state governments and citizens alike.

Scott Pattison: "People don't like change. I think we're all like that. But the math is going to force the change. The bottom line is we're not going to have the revenue growth at the state level that we've had in past years, for the next few years. And when there's less money, you have to make tougher decisions and I think that hopefully what's going to happen is that citizens, program directors and others are going to realize there's only so much money and we're going to have to do things differently."

Beth Hyams: One of the speakers today was Oregon Governor Ted Kulongoski. What did he have to say?

Chris Lehman: The governor talked up the recommendations from his so-called Reset Cabinet. As you may remember the governor pulled together a panel of close advisors to study state government from top to bottom. The Reset Cabinet reported back that if Oregon doesn't make some fundamental changes to its government, the state would face a decade of deficits.

The Cabinet also made a series of recommendations for ways Oregon can streamline government services. The report also suggests changes to the state's tax structure and to how state employees are compensated. Many of the changes would require legislative or voter approval.

The Governor today responded to critics of the report who suggested it's too little, too late, considering that Kulongoski has less than six months remaining in office. Let's listen to what the governor said.

Ted Kulongoski: "As I have traveled the state talking about this report from my Reset Cabinet, the first question I hear is ‘Why now? Why issue this report in your last six months in office. Why not have done this two, four or six years ago.' The answer is simple. Times have changed."

Beth Hyams: That's Oregon Governor Ted Kulongoski, speaking this afternoon to a gathering in Portland of state budget officers from around the country. Chris, what was the reaction to the governor's speech?

Chris Lehman: It was well received, and in fact one of the reasons to have conferences like this, according to organizers, is for the exchange of ideas such as those contained in the Reset Cabinet report. But the reality is there are many differences between states in terms of how their governments are set up, and how they get their revenue. So there's only a limited amount of ways you can transfer ideas from one state to the next.

Beth Hyams: Were there any ideas about trimming budgets from other states?

Chris Lehman: One session this afternoon featured a budget officer from Ohio who talked about that state's efforts to consolidate some basic administrative functions to a centralized location. To a certain extent all state governments do this including Oregon. But the Ohio experiment goes beyond what many states have tried.

An example given was the processing of travel expenses. The Ohio speaker said they've cut the cost of reimbursing state employees by three-quarters. The problem they've run into is making sure that state agencies put the money they're saving to front-line services, rather than continue to pay office staff that are no longer needed. Easier said than done.

Beth Hyams: Thanks, Chris.