Schools, Health Care Facing Cuts (OR)

January 25, 2011

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Gov. John Kitzhaber said Monday thathis pending proposals for aid to public schools and health care for low-incomeOregonians won’t support current levels in what is expected to be an austerestate budget for the next two years.

After a meeting at the Capitol,where he talked about the budget with Associated Press news executives but didnot lay out specifics, he offered two of the biggest budget numbers via newsrelease in late afternoon.

For aid to the 197 school districts,whic h account for about 40 percent of the state’s discretionary spending,Kitzhaber will propose $5.56 billion — $2.89 billion of which would beavailable starting July 1. He said the extra amount in the first year wouldgive time for districts to find savings in the second year.

The current level is about $5.7billion, although districts also received extra federal aid in the past twoyears.

For the Oregon Health Authority andlong-term care for older people, Kitzhaber will propose $2.3 billion. Althoughit is an increase of $350 million from the tax-supported general fund,Kitzhaber said it is far short of the amount required to make up for about $1billion in extra federal aid the past two years from Medicaid, the jointprogram of health insurance for low-income people.

The Oregon Health Plan serves abouta half-million people, and Medicaid in Oregon also pays nursing-home care forlow-income seniors.

Kitzhaber will submit his proposed2011-13 budget by the legal deadline of Feb. 1, when lawmakers get down tobusiness.

State officials project about $15billion available for spending in the next two years from tax collections andlottery proceeds, the main sources over which lawmakers have the mostflexibility. That is more than the $13.6 billion estimated to be spent duringthe current two-year cycle. But it’s up to $3.5 billion less — about 20 percent— than estimated to meet current obligations.

Kitzhaber said he is assuming asmaller base exceeding $14 billion.

"Instead of cutting everybodyoff equally, we took the resources we have and asked ourselves how we shouldprioritize the use of these additional dollars," he said to the newsexecutives.