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Gov. John Kitzhaber released his state spending plan Monday, Dec. 1. The general fund, including lottery revenue, would increase from $15.9 billion to $18.6 billion in the next two-year budget cycle.
(Dave Killen/The Oregonian)
Gov. John Kitzhaber rolled out an $18.6 billion proposed budget for the 2015-17 biennium on Monday morning, emphasizing goals he cited throughout his campaign to put more money toward helping Oregon families find jobs, training and a better education, and in turn, improving the state's economy -- particularly in counties that continued to struggle after the recession.
The proposed general fund/lottery budget -- with $9.4 billion, or 50 percent going to education -- represents a nearly 11 percent increase from the 2013-15 budget.
"We have the resources in place to have an economy that works for all of us," Kitzhaber said as he presented the budget in his ceremonial office at the Oregon Capitol.
"We have created a tremendous opportunity for Oregon to reinvest in children, families, schools, communities and our rural economies. We have built this budget on principles rather than on programs."
"For too long, Oregon has built its budgets in the moment, by the moment, and for the moment," Kitzhaber said. "Today I can tell you that Oregon is on a path toward a sustainable budget."
Based on his projected health care savings, Kitzhaber forecast that the state will have a surplus in the 2021-23 biennium.
The plan
Gov. John Kitzhaber proposes to spend $18.6 billion in general fund and lottery dollars over the 2015-17 biennium in the following areas:
$9.4 billion:
Education
$4.9 billion:
Human services
$3 billion:
Public safety and judicial
$378 million:
Natural resources
$269 million:
Administrative
$204 million:
Economic and community development
$152 million:
Transportation
$119 million:
"All other" expenses
$12 million:
Consumer and business services
The governor's proposed budget typically sets the tone for the coming legislative session, when state lawmakers will take their own vote on Kitzhaber's spending plan.
Republican leaders responded quickly, calling Kitzhaber's budget "ambitious" and questioning his proposals for more spending on schools.
"Has he really prioritized education like his budget says?" asked Rep. Mike McLane, R-Powell Butte, the House Republican leader.
McLane wondered how Kitzhaber could claim that when the percentage increase in funding for schools is less than the overall budget increase.
"I believe there will be cries for more revenue for education," he said, adding that he is concerned about the "creep" of state government in starting more programs that compete with its traditional tasks.
Of the $18.7 billion in general fund and lottery resources, 83 percent -- or $15.5 billion -- comes from personal income taxes. The remainder includes $1 billion in corporate income taxes, $870 million from the lottery, $818 million from other taxes, $202 million in estate taxes, $126 million from tobacco and cigarette taxes, and a $101 million carry-over from the previous budget.
Senate President Peter Courtney, D-Salem, said now it's state lawmakers' turn to take a whack at the spending plan.
"The legislative branch looks forward to working with the executive branch in the 2015 session," he said in a statement, "on crafting the best possible state budget."
Lawmakers will review and likely tweak the governor's proposal before approving a budget, typically before the start of the next budget cycle on July 1.
Here are some of the programs Kitzhaber hopes to fund.
Education
The $9.4 million slated for student programs in preschool through higher eduction makes up about 51 percent of the proposed budget -- about the same as in recent budgets but less than the percentage before the recession.
Kitzhaber said $808.3 million is for targeted programs, including offering free all-day kindergarten statewide. Other programs would connect high-schoolers with college or career programs, and extend free lunch to families that currently qualify only for a price reduction.
(The Oregonian's Betsy Hammond takes a deeper look at proposed education spending.)
Economy and jobs
While Kitzhaber has discussed major tax reform, he has pulled back over the past year from any move toward a sales tax. On Monday, he acknowledged that a sales tax is a "nonstarter" with Oregonians.
Instead, he aims to create a Working Family Addition tax credit to blunt the blow to workers who move up from the lowest rungs of the wage scale only to have higher taxes eat up a big chunk of their gains.
He also proposed spending $55 million to increase the quality and availability of a child care program for working families. And he said he would support an initiative expected in the 2015 Legislature to mandate paid sick leave statewide.
Kitzhaber's proposed spending funnels $648.9 million to Business Oregon to support job creation statewide as well as access to capital for small businesses.
On the transportation side, $151.5 million in general fund money is slated to cover a programs including $58.6 million for ConnectOregon projects at ports, public transportation, rail, aviation, and bike and pedestrian paths.
Health care
In a section dubbed "Healthy People," Kitzhaber outlines $4.9 billion for the state's human services agencies.
The plan calls for continued focus on prevention and moving more state employees into a coordinated care health insurance model.
The governor also set aside $100 million in bonds that local governments could access to help provide shelter for homeless families with children.
Natural resources
The governor plans for $378 million in spending on natural resources, including $30 million to speed up federal timber harvests that he said could create jobs and a "sustainable supply of timber" to hard-hit counties. The budget also sets aside $51.6 million to create a statewide water supply and watershed protection program.
Public safety
Kitzhaber laid out plans to spend $53.2 million on local mental health and addiction services as well as $58.5 million -- diverted from the construction of prisons -- to support communities that show "a commitment to innovation and reducing recidivism."
The proposed budget also sets aside $18.3 million for the Oregon State Police to expand coverage statewide, including adding 20 state troopers and 33 vehicles, as well as 17 Fish and Wildlife Department positions.
-- Laura Gunderson