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States fiscal situation is dire, getting worse

TWO VIEWs • Let's have a candid conversation about Oregon's budget crisis

As citizens weigh the fiscal future of the state of Oregon, we would like to believe that our state is in better shape than some of the big states getting so much media attention. But unfortunately for Oregon, our fiscal problems are just as big as the big states.

Consider this comment from the Pew Center on the States in 'Beyond California: States in Fiscal Peril.'

'California's fiscal problems are in a league of their own - but the Golden State is hardly alone. Some of the factors driving California towards the brink of insolvency are also hurting an array of other states. This report, 'Beyond California: States in Fiscal Peril,' takes a close look at nine states particularly affected: Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.'

You really can't solve a problem unless you know its dimensions. And the dimensions of Oregon's fiscal situation are every bit as dire as our larger neighbors. Current estimates show that Oregon's budget for 2011-13 faces a multibillion dollar shortfall.

How did we get to such a startling place?

• Oregon's spending has grown by 49 percent in two budget cycles. Since 2005, Oregon's total 'All Funds' budget has increased from about $40 billion to $60 billion.

• For the past four years, Oregon's state domestic product grew an average of 2.5 percent per year, while state spending grew by 12 percent per year - five times faster.

• To balance Oregon's current budget, the Legislature cobbled together $1.6 billion in 'one- time money' that will not be available for the 2011-13 budget.

Why is Oregon in such an unsustainable fiscal position? Why do we face a multibillion dollar hole? For too long, we have allowed unsustainable growth in government spending, especially in the expanded hiring of government employees. Our budget problems are due in large part to the increases in hiring and the cost to maintain such a large work force. Consider that according to Gov. Kulongoski's own reset cabinet, three out of four General Fund dollars are ultimately spent on payroll and benefits.

For too long the information, while available, has been hidden in plain sight within reams of documents, obscured by impenetrable budget jargon, in difficult-to-comprehend accounting reports, mostly made available in non-user-friendly format.

Public conversations have almost always been driven by emergency funding needs, by the need to keep school doors open, or by the need for public services such as state police. We haven't discussed why we have allowed state spending to increase by 49 percent during the past four years, while many of our household budgets and the national economy contracted.

The only way that Oregonians are going to solve our fiscal problems is with a candid conversation, and that begins with openness, with allowing the public to have a transparent look at Oregon's budget.

Oregon Transformation, a project of the House and Senate Republican caucuses, is now open for business. The website, www.oregontransformation.com, is designed to inform and educate and to invite research and discussion on the state's budget problems.

Legislators are already using the site, researching spending cuts and budget solutions, which will be compiled and presented to legislators and to both candidates for governor. But every Oregonian is invited - people inside government, office managers, teachers, highway workers and business owners - because these are the people with innovative solutions. They are the ones who have seen the problems firsthand.

A generation ago, Gov. Vic Atiyeh faced a horrible economy and devastating revenue shortfalls. In the height of this budget crisis, legislators, citizens and lobbyists continued to come to him with specific spending requests. He would ask them if the money spent on their programs would benefit the state as a whole. If not, even if the idea had merit, he asked them to set aside their projects for a later date.

If Oregon is going to solve its money issues and move forward, then this generation's leaders, and all of us, will have to draw on Atiyeh's past wisdom. The Oregon Transformation project is a beginning.

Dennis Richardson is a Republican state representative from Central Point; Allen Alley is cofounder of Pixelworks and former GOP candidate for governor.