Budget-Cutting Special Session Planned For Aug. 10

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Gov. Kate Brown has called a special session for Aug. 10, putting lawmakers on course to trim the state budget amid plunging revenues during the pandemic that has kicked the nation into a recession. 

Brown announced the special session Friday. Her proclamation, obtained by The Lund Report, says  there is an “urgent need” to rebalance the state budget and “ensure delivery of benefits and benefit programs to Oregonians.” 

Brown previously said she expects a special session in late July or August and has pushed on Congress to send federal relief to offset the blow of state budget cuts. 

It’s unclear how deep the cuts will be because lawmakers have the option to tap reserve accounts to offset some of the damage. Congress has not passed its next coronavirus spending package.  

Oregon faces a $2.7 billion revenue shortfall in the current fiscal year, which started July 1. There also are long-term concerns. The state’s economic forecasters project a $10.5 billion revenue shortfall for the next five years as Oregon recovers from the economic fallout of COVID-19.  

“These decisions will not be easy," Brown said in her statement. "Oregon has been smart with our reserves and saved for a rainy day, preparing us to weather this economic storm. But if we use too much of our savings now, then we’ll be stuck with an even bigger budget gap for the next biennium. Putting off tough decisions this summer will only leave us with impossible choices next January."

Lawmakers and Brown have signaled that they want to prioritize programs and services as much as possible. Democratic legislative budget leaders have released a budget framework that prioritizes public education, Medicaid and health care, housing and child welfare, with an eye toward keeping those programs as intact as possible. For example, it taps the public education reserve account to avoid teacher layoffs and cuts to schools. 

Agencies have braced for the worst. Brown ordered state agencies to draw up plans for scenarios with the equivalent of 17% cuts as an initial exercise the gauge the impact.

However, legislative budget writers, in their proposed framework, have much smaller cuts that would be the equivalent of a 2.7% cut for human services agencies, including the Oregon Health Authority.  That amounts to $180.3 million in state general funds from the Oregon Department of Human Services, the Oregon Health Authority, and three smaller agencies, including the Long-Term Care Ombudsman, Psychiatric Security Review Board and Commission for the Blind. 

Cuts include steps like freezing vacant positions, cutting programs and lowering rates paid to coordinated care organizations, which act as Medicaid insurers.  Brown also submitted a plan for $150 million of initial cuts, which includes a delay in starting a new program for in-home behavioral health services for youth. Brown said more cuts are necessary. 

In a statement, Senate President Peter Courtney, D-Salem, said the Legislature needs to balance the budget. 

“We have another long session coming in January," he said. "Now is the time for the budget. That must be our mission this special session.”

Lawmakers met in a special session in June to address police reforms. Brown left the door open to more police accountability legislation. 

A special session that only focuses on the budget could be over in just a day. But a special session with police accountability or other policy bills would be longer. 

The Legislature ended its short session in March without passing hardly any bills after a Republican-led walkout to kill the governor's carbon tax bill kept the House and Senate from having a quorum. 

Senate Republican Leader Fred Girod of Stayton said the Legislature must focus on the budget. 

"Senate Republicans have been willing to work on the budget since before the governor called the first special session earlier this summer," he said. "If we diverge from the stated purpose of addressing the budget, this second special session will make a mockery of the legislative process yet again."

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.

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