Oregon Department of Human Services Director's Message
June 4, 2010 DHS Director's messages on the web
To: All DHS employees
From: Bruce Goldberg, M.D., director

Update on recession budget shortfall

"Always be kind, for everyone is fighting a hard battle."

I want to start this week by thanking all of you who contacted me in response to last week's message about the serious budget shortfall that will affect the services we provide to Oregon families. Many of you described what it has been like trying to keep up with record demand, caseloads and need in our state while also dealing with the effects the economy has had on state workers. I know that the furloughs have been difficult both because they reduce our capacity to do the work and also because they are a pay cut. And I understand how stressful things are and how the latest budget news is not providing any relief.

We are in a time when more families than ever are turning to the state for help while there are fewer dollars to help them. No matter how you do the math, that doesn't pencil out.

The reason we are dealing with this issue now is that like a household budget, the state budget does not stay stagnant. The two-year budget that was approved by the state legislature in July 2009 was based on the best information available at that time and the forecast of what state revenues would be through 2009-2011. Then every four months the state economist takes another look at the economy and adjusts the forecast based on the unemployment rate and other factors. The forecast released last week predicts that because of the recession we now have $577 million less statewide for public services in this budget than we thought we would last July.

I wish there were easy answers and readily available solutions. But unfortunately there aren't, and at DHS we know that first hand. Since the beginning of this recession DHS has been tightening its belt and managing our budget as best we can in response to the rising caseloads. In other words, we planned ahead. We have had a hiring freeze in most areas since November 2008. We've reduced non-essential travel, supplies purchasing, and in everything we've done have tried to be prudent and frugal so all dollars are directed toward our clients. We've done our best to make improvements that save resources and improve services.

But now the recession shortfall is simply too great. We cannot squeeze the 9 percent cuts announced by the Governor -- another $158 million -- out of our budget for the rest of this biennium without putting cuts to services on that list.

For Oregonians affected by the recession, that will be a double whammy. People who have lost jobs may also lose the very state services that are helping to keep their families stable during these tough times.

As I said last week, the proposed reduction list had to be put together very quickly. It is due in the Governor's office next Tuesday, June 8. As soon as possible we will post the list to the DHS website.

The list is not final but we can anticipate that there will be a wide variety of strategies to meet the target we have been given. There will certainly be any additional administrative savings we can find but there will also be reductions to services, reductions to reimbursement rates to providers and possibly layoffs.

I want to stress something and this is important: the list we are sending to the Governor on Tuesday is not a final decision. We are a long way from that. It's a starting place. The Governor will review the lists of all the agencies and make recommendations. As he said in his statement last week, he wants layoffs to be a last resort. At the same time, if there are program reductions, some potential layoffs may be on the list but we are working hard to look at other options. DHS leadership is meeting with union leadership to discuss those options.

I know this is coming at all of us very quickly. Again, I wish there were easier answers or that I had more information to share with you today. No matter where we sit in DHS, we are all in this together. This recession shortfall affects every single employee, our clients, our providers and our stakeholders. It also affects the entire state and will have an impact for years to come.

But please know that I will continue to keep you informed and also listen to your concerns and ideas, and that I know how hard you are all working and how much you care.

DHS on the web