|Earlier this week I told you about some of the budget issues facing Oregon and DHS -- both in this biennium and the next -- as a result of the struggling economy. And for the past few days you've probably followed media coverage about the Governor's proposed budget for 2009-2011. But of more immediate concern is this biennium's budget, which is what I want to talk about today.
Our agency is facing a shortfall that is being caused by an unprecedented rise in the number of people turning to us for help, the loss of approximately $20 million in tobacco tax revenues, and reduced federal funding. Those increased costs and reduced revenues have combined to create what is projected to be a $33.3 million shortfall for DHS this biennium.
As you know, we anticipated this and began to implement a series of cost-saving measures this past spring in an attempt to preserve services. These have helped, but have not been sufficient to address the rapidly growing need within Oregon's communities.
Yesterday we met with the Legislative Emergency Board to discuss the situation and to rebalance our budget. Because 85 percent of our budget directly benefits clients through food and cash assistance and provider reimbursements, an additional 5 percent pays for DHS staff who provide direct client care, and the remainder pays for essential infrastructure support (rent, administrative services, supplies, etc.), it is getting harder to find ways to reduce costs without impacting clients.
We presented a plan to the E-Board that addressed $27 million of the current shortfall, still leaving us with a $6.3 million deficit. The plan included identifying additional program savings we can make throughout the agency and service reductions in our TANF and Vocational Rehabilitation programs so that we can remain within budget.
Within Voc Rehab we will be moving to an Order of Selection. An Order of Selection prioritizes services to provide help to the most vulnerable clients first. Within TANF, services for JOBS participants will be limited, with priority given to federally defined "core" services. In addition, it is likely that, beginning in February 2009, the post-TANF cash benefit will drop from $150 to $100 per month.
These reductions will not be easy, but with the current state budget deficit there are few alternatives. These actions will have real consequences for our clients. I recognize the work and difficulty our CAF staff will face in implementing them.
I remain optimistic that the federal government will pass a stimulus package in January that can help offset the remaining deficit and allow us to meet the growing number of requests for services through June 2009.
On a positive note, the E-Board approved our request to use our recent Federal Food Stamp Bonus money to temporarily hire additional staff to help keep up with the increasing number of applications and to fund some community hunger relief programs.
We will continue to work with legislators, the Governor's office, our provider partners and client advocates to develop thoughtful plans for possible service cuts. And we will continue to lobby our federal partners to provide the funding needed to keep Oregon's social service safety net intact. I will keep you informed as I know more.