AP News

Oregon budget outlook: Better now, tougher later

SALEM, Ore. (AP) — Oregon seems to have escaped the need for more state budget cuts over the next year, lawmakers said Wednesday, but sluggish economic growth is making the outlook for future years look increasingly grim.

Lawmakers were reacting to mixed news in a quarterly revenue forecast. State economists were a bit more optimistic about near-term tax collections than they were three months ago, projecting that the general fund and lottery will take in about $80 million more than they predicted last quarter. That's enough money to pay for everything in the budget, plus a $55 million cushion.

"As school kids prepare to return to classes next month, it's good to know that the doors of our schools can stay open and that we won't be forced to close prisons or cut services for seniors," said Senate President Peter Courtney, a Salem Democrat.

But the long-term outlook is less rosy. Economists dialed back their projections for the two-year budget cycle that begins July 1, 2013, and the three that follow, raising the specter of more tough budget cuts as the costs and demand for government services rise.

Experts now project Oregon's general fund and lottery will earn $16.6 billion during 2013 cycle — down $590 million from their estimates one year ago.

"Oregon remains stuck in an economic rut," said Rep. Bruce Hanna of Roseburg, the Republican co-Speaker of the state House.

With elections looming in November, House leaders from both parties used the mixed economic news to press their ideas for improving the economy.

"This forecast shows we need to do more to plan for the long term," said Rep. Tina Kotek of Portland, the No. 2 Democrat who's in charge of the party's campaign effort. "The more we can equip workers with the knowledge, skills and versatility needed for the jobs that will come as the economy grows, the better Oregon will be positioned to thrive in the coming years."

Republicans and Democrats are currently tied in the House, and both parties are jockeying to pick up at least one seat to get full control of the chamber.

"We'll continue our efforts to improve Oregon's business environment to help attract and retain employers, while taking the same, fiscally-conservative approach to the state budget that has prevented deeper cuts to programs that are important to all Oregonians," said Rep. Andy Olson of Albany, the Republican leader in charge of GOP campaign operations.

The Good Business Issue
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