Yesterday state economists announced that Oregon continues to face shortfalls in the amount of revenue needed to meet the state budget. Every quarter that goes by, the news gets worse. Yesterday's announcement was that the state will have $377 million less than forecast last quarter. The latest shortfall announcement is in addition to the $577 million shortfall of June.
How the Governor and lawmakers respond to this latest shortfall is driven, in large part, by what is allowed under the law, combined with federal funds and state reserve funds that are available. Legally the Governor only has the authority to do an across-the-board reduction to all state agencies. He called for that today, asking agencies to come up with an 8 percent reduction list.
At the same time, Governor Kulongoski joined with legislative leadership yesterday in announcing that they will be using the additional federal dollars that came to the state a couple of weeks ago to mitigate further cuts to DHS/OHA programs as well as to education.
It is clear that everyone's goal is to maintain the level of services that were in effect at the end of the July legislative emergency board and to not make any further reductions in services to vulnerable Oregonians. In other words, reductions that were a part of the last round of allotment cuts and not restored by the July E-Board will continue forward and go into effect over the next several months. The desire is to not have to make any further reductions.
I do not know yet exactly how all this will play out but lawmakers and the Governor are clear about wanting to protect vital services to seniors and the most vulnerable. I hope we can. As soon as I know more, I will let you know the implications of yesterday's announcement to our clients, our staff and our operations.
One thing that is clear from the economists is that the global recession is continuing longer than anyone predicted and that will mean ongoing increases in demand for our services. Our work is so important to families (including our own), to individuals, and to the state at large. It is impossible to say thank you often enough but I will continue to show my deep appreciation and respect for the work you are doing and ask that we all continue to do our best to treat each other well through these difficult times.