Oregon Budget: Faced With Nearly $2 Billion Shortfall, Governor Calls for Taxes, Cuts

Faced with a $1.7 billion budget shortfall, Oregon Governor Kate Brown on Thursday proposed a series of tax hikes and cuts to close the gap. Her budget also calls for investments in education and health care.

"The balanced budget I propose today is a short-term solution," Brown said of her $20.8 billion budget. "It closes the budget gap, through a combination of budget cuts and new revenue.

"The new revenue includes increases in tobacco taxes, hospital and insurance company assessments to help pay for health care, and fills other gaps by closing loopholes in the tax code."

Brown said tax hikes and closing loopholes are necessary because "balancing the budget with program cuts alone would mean taking health coverage away from thousands of Oregonians.

"It would mean some families would not have access to preschool or early childhood education opportunities that support student success. It would mean no more Oregon Promise. These are not cuts I am willing to make."

Brown had been hoping that voters in the state would approve Measure 97 - which would have brought $3 billion per year in to the state's coffers through a tax on large corporations. Voters rejected it after a well-financed ad campaign by the measure's opponents.

The bulk of the education funding in the budget proposal goes for early education and K-12 schools, which would get $8.6 billion over the next two years. Meanwhile, operating funds for the state's community colleges and public universities would remain at their current level.

Brown proposes keeping the Oregon Promise program that allows some high school students to attend community college for as little as $50 per semester.

On the flip side, there would be cuts to funding for community-based developmental disability programs. The proposal also calls for keeping state jobs open for 60 days and cutting back on state employee travel.

Brown said that while they have been able to avoid drastic cuts so far, the state is not out of the woods.

"This budget is a short-term solution, nothing more," she said. "It represents the beginning of a conversation, not the end."

Photo State of Oregon