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Governor Kitzhaber Puts Forward Budget Proposal

Oregon Governor John Kitzhaber outlined his two-year budget proposal Friday. About half of the $16.5 billion is earmarked for public education. The rest is divided up among public safety, health care, and other state services.

Starting in January, Oregon lawmakers will get their own crack at creating a spending plan. Joining us now with more is our Salem reporter, Chris Lehman.

Beth Hyams: This budget relies on the state saving some money in several key program areas. Some of them are very controversial. How much money are we talking about here?

Chris Lehman: There are three budget areas that make assumptions about how much money the state will save by doing things differently. First, in health care, Kitzhaber says the state will save some $11 billion over the next decade, although much of that savings happens down the road, not right away.

That money is saved by making changes to the way the state provides health-care to low income people. In fact, those changes have already begun, but Oregon Health Authority Director Bruce Goldberg said today it’s too soon to provide any concrete figures about how much the changes are saving.

The Governor is also talking about making some changes to the state’s public pension system. While that might not sound like it would affect you unless you’re a public worker, the changes could in fact cut pension costs by more than $800 million over the next two years.

About a third of that would be for K-12 schools, so the governor said today that it would allow districts statewide to hire 500 teachers, which would certainly be a reversal of the layoffs we’ve been seeing over the last number of years. But any changes to public pensions are fraught with legal and political challenges, because we are talking about peoples’ pensions, which is a very personal issue. So it certainly won’t be a slam dunk getting that through the legislature.

I talked today to Cheri Hult. She’s a board member of the Bend LaPine School District in central Oregon, and she attended the governor’s budget roll-out today on behalf of the Oregon School Board Association. She sounded somewhat positive after seeing what the governor has in mind, but she says it’s too soon to take it to the bank.

Cheri Hult: “I think it’s too early to comment on what the actual numbers are going to be, because I kind of view this as a baseball game. We’re in the first inning here, and by the seventh inning stretch, I hope that our children of Oregon still remain a priority.”

Beth Hyams: And there’s a third area of cost-cutting measures that the governor thinks would save money. Prison sentences. And this one could be just as controversial, right?

Chris Lehman: To be clear, it’s not actually clear what the governor has in mind. He’s deferring some of the specifics to his Commission on Public Safety, which is set to make its proposals next month. And then of course, those proposals would have to go before the legislature. But the governor did emphasize that the state would not be letting hardcore criminals out of prison to save money.

John Kitzhaber: “We’re not talking about violent offenders. We’re not talking about sex offenders. We’re talking about that group of people, non-violent offenders, and I think there’s a whole host of ways this can be done. And it’s just something we have to take on.”

Chris Lehman: So we’ll find out more about these proposals in about 3 weeks.

Beth Hyams: How are lawmakers reacting to this budget proposal?

Chris Lehman: Well of course no one, not even the governor, expects this spending plan to just glide through the legislature. For one thing, the final budget will be based on revenue projections that won’t come out until May. Early reaction has been mixed. Some lawmakers are leery over tinkering with public pensions and criminal sentencing. But there certainly hasn’t been anyone who’s poured cold water on the entire thing.

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