Out of Control Policy Blog

State of the State: Oregon in 2011

This is the fourth of a ten-part series on the 2011 State of the State (SOTS) speeches in states with the ten worst projected relative budget deficits for FY 2012. Budget data is from the Center on Budget and Policy Priorities' (CBPP) recent budget report, and SOTS speech text is from Stateline. CBPP's data on states' FY 2012 budget deficits as a percentage of their FY 2011 budget is the benchmark for relative budget deficits.

According to CBPP, Oregon is projected to have the sixth worst relative budget deficit of any state in FY 2012, equaling 25% of its FY 2011 budget; and the fourteenth highest absolute budget deficit totaling over $1.8 billion. (Note: Oregon uses biennial budgeting and faces a projected $3.5 billion deficit for the upcoming 2011-2013 biennium.)

On January 10, 2011 Oregon Governor John Kitzhaber delivered his SOTS speech (full text available here). Gov. Kitzhaber’s SOTS address contains few specific policy proposals, and gives little insight into how he plans to address the state’s fiscal crisis. Below are a few highlights from his speech:

  • Economic Development: Gov. Kitzhaber emphasizes the launch of his Oregon Business Plan Steering Committee (comprised of six transition teams) that is focusing on job creation with the goal of creating an average of 25,000 jobs a year through 2020, and raising Oregon’s per capita personal income to above the national average.
  • Government Reform: He proposes changing the way state policymakers examine the budget in two ways. First, expanding the budget horizon from a two-year focus to a ten-year focus. Second, abandoning service level budgeting and instead incorporating true outcome-based budgeting.

Gov. Kitzhaber also discusses education and sets the goal that by 2020 80% of all Oregon high school graduates achieve at least two years of post-secondary education or training.

Policymakers in the Beaver State need to explore and implement serious policy solutions to balance the budget. For proven ways to reduce government spending and maintain high-quality public service delivery, see the American Legislative Exchange Council’s (ALEC) State Budget Reform Toolkit and Reason Foundation’s Annual Privatization Report 2010: State Government Section.

For the other articles in this SOTS series, see: Wisconsin, California, Connecticut and Illinois.

Harris Kenny is Policy Analyst


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