Governor Delivers 2009-2011 Recommended Budget to the Legislature

Oregon's Governor says the budget focuses on the future, elevating education as top funding priority, makes key investments in health care, climate change, transportation and jobs.

(SALEM, Ore.) - Governor Kulongoski today delivered his recommended budget for 2009-2011 to the state legislature, entitled "A Budget for Progress in Challenging Times". The 15.8 billion dollar budget makes strategic investments in education, health care, climate change, and job creation through transportation and other infrastructure projects.

"In flush times we can choose to make critical investments in a wide array of services. But when the pie is shrinking we need to invest in those things that are the fundamental building blocks of a strong economy," the Governor said.

"In other words, we must invest for the future – even if that means making painful disinvestments in the present. In that sense, my budget is a visionary statement of where I want to lead Oregon."

The Governor’s budget is built upon the principle of prioritizing the state’s limited resources in investments that will address the fundamental issues facing us and better position Oregon for long-term economic success when the recession passes. The Governor’s budget focuses on four key areas: education, pre-K through post-secondary; health care, starting with children; climate change; and transportation, creating jobs immediately and for the long-term.

The Governor’s budget makes education his top priority, dedicating 54 percent of the General Fund to the entire education system pre-K through the Opportunity Grant program for post-secondary education.

"My passion is to make sure Oregon has the best skilled, best trained, best educated workforce in America," Governor Kulongoski said. "Fifty-four percent of General Fund revenue goes to education. It is a big number – and it has a big purpose: To keep Oregon on track toward a powerful, diverse, high-wage economy when the recession breaks and a national recovery begins."

Due to uncertainty about the course of the present economic crisis, the Governor’s budget preserves education funding at every level for the first year of the biennium, leaving the need for an additional $225 million in the second half of the biennium to keep education at full funding across the board.

* Pre-school: The Governor’s budget includes $116.1 million – a $6 million increase – to continue expanding access to Head Start for all eligible three and four year olds. The budget also includes $1 million in first-time funding to develop an Early Start program for infants up to three years old.

* K-12: The Governor’s budget includes $6.39 billion to enable school districts to continue their efforts to improve student success, keep class sizes reasonable and school doors open for a fully year. In the second half of the biennium, the Governor plans to utilize nearly $160 million more from the Education Stability Fund to maintain these goals and keep education complete the entire biennium.

* Community Colleges: The Governor’s budget commits $506.8 million to assist community colleges in strengthening their programs and expand capacity to meet the growing enrollment and needs of students and businesses.

* Oregon University System: The Governor’s budget includes $917 million for the OUS system to improve student retention and graduation rates.

* Opportunity Grant Program: The Governor’s budget provides $163 million for the continued expansion of the new Shared Responsibility Model of the state’s financial aid program for post-secondary education to meet the growing enrollment and need at both state community colleges and universities.

The Governor’s budget also includes providing health care for all uninsured children and expanding health care coverage for a total of 100,000 people covered by the Oregon Health Plan. Coverage would be funded by expansion of the provider tax paid by hospitals and insurance companies and a 60 cent per pack cigarette tax increase.

"This will not only be healthy for children, working families and the poor – it will be healthy for Oregon businesses, taxpayers, and our economy,” Governor Kulongoski said. “We’ll add more than 4,000 jobs to our health care sector. And we’ll have healthier children – spending more time in school, becoming better prepared for the jobs and economy of tomorrow."

* Healthy Kids: The Governor’s budget includes $249 million to ensure that all children in Oregon under 19 have access to affordable health care. By the end of the 2009-11 biennium, this program will bring health coverage to an additional 80,000 children in Oregon – achieving coverage for 95 percent of all kids.

* Rebuilding the Oregon Health Plan: The Governor’s budget provides $962 million to raise enrollments in OHP Standard from 25,000 to more than 100,000 in 2009-11.

* Improving Health of Oregonians: The Governor’s budget dedicates $112 million in new tobacco tax revenue to improving the health of all Oregonians, including $5 million for elderly and disabled transportation, $12 million for public health, tobacco cessation and health promotion with the remaining $95 million allocated to the Oregon Health Plan.

Investing in Oregon’s transportation infrastructure is the strongest stimulus tool available to create jobs, keep products moving and help Oregon’s businesses stay competitive. The Governor’s budget includes funding for the Jobs and Transportation Act of 2009 – which will raise more than $1 billion per biennium to modernize Oregon’s transportation system through a modest increase in the gas tax, an increase in registration and title fees and a first-time title fee on vehicles new to the state.

The Governor’s budget also utilizes highway revenue bonds to accelerate improvement projects statewide. These projects will create and maintain 6,700 jobs per year across Oregon in the first five years.

"Investing in transportation is a double win. It will stimulate job creation in the short-term – and put our economy on track for success in the long-term," Governor Kulongoski said. "If we cannot move people and goods quickly, safely, and inexpensively, Oregon businesses will not be able to compete, and the Oregon economy will not grow."

* Ongoing Maintenance and Preservation: The Governor’s budget includes more than $1.1 billion in new money for Oregon’s cities and counties over the coming years to maintain their roads, fix potholes and make local streets safer.

* Addressing Key Freight Bottlenecks: The Governor’s budget includes $600 million in bond proceeds to relieve key freight bottlenecks that cost Oregon businesses and commuters millions of dollars and thousands of hours stuck at Oregon’s worst chokepoints. This would create thousands of jobs and make Oregon’s economy stronger.

* Ensuring Investments in Oregon’s Non-Highway Transportation System: The Governor’s budget continues the ConnectOregon program, with a one-time $150 million infusion of dollars from lottery-backed bonds that will leverage millions more from private sources to create jobs, while at the same time rebuilding our non-highway infrastructure.

* Dedicated Funding for Multimodal Transportation Investments: The Governor’s budget creates for the first time, an ongoing funding source for Oregon’s multimodal transportation system, including air, rail, marine and transit systems. The total for the 2009 budget is estimated at nearly $44 million.

The Governor went on to highlight his climate change agenda and the importance of Oregon being a leader in the green economy in order to take advantage of new jobs and economic opportunity in the future. The Governor highlighted the expansion of the Business Energy Tax Credit that will bring new green industries to the state.

"My message should be unmistakable – and it is the same message I conveyed to business and government leaders in Japan and China: Oregon is open for business. Especially green business," Governor Kulongoski said.

* Reduce Greenhouse Gas Emissions: The budget provides $1.9 million to implement strategies to reduce greenhouse gas emissions, including an emissions performance standard for new electricity production, development of a low-carbon fuel standard, and development of a regional cap-and-trade program.

* Increase Investment in Energy Efficiency: The budget includes a targeted increase in the Business Energy Tax Credit (BETC) from 35 percent to 50 percent of project costs for industrial-scale investments in energy efficiency. It invests $2.5 million in tax credits for full electric and plug-in hybrid vehicles, $4 million for a new "Energy Matchmakers Fund" to help improve energy efficiency in low-income households, and $600,000 to provide "energy performance certificates" to consumers and businesses when they buy homes or other buildings.

* Increase Renewable Energy Production: The Governor’s budget invests an additional $2 million in a new renewable energy fund for development of community-scale demonstration renewable energy projects.

* Lead by Example: The budget provides $5 million for energy efficiency projects at state agency facilities, including the purchase of 25 electric vehicles and two electric charging stations for the state vehicle fleet.Improve Water and Air Quality, Provide Water for the Future.

The Governor continued to underscore his commitment to Oregon’s pristine waters and clean air. The Governor’s budget supports the development of a long-term strategy that addresses threats to clean water and air. The budget includes resources for monitoring and developing standards for water quality in key Oregon waterways.

"Investing in clean air, clean water – and, yes – clean energy – is the right thing to do, and the economically smart thing to do," the Governor said. "That’s why my budget invests in developing a long-term plan to restore and preserve water supplies, and protect critical ground water resources."

* Pursue Long-Term Planning For Water Supply and Conservation: The Governor’s budget includes nearly $3.3 million to develop a comprehensive water initiative to address the statewide effects of climate change. It invests $2.5 million to complete the first stages of needed infrastructure projects that will eventually restore irrigation to over 57,000 acres of prime land in the Umatilla Basin.

* Strengthen Water Quality Statewide: The Governor’s budget invests $1.5 million to improve Oregon’s water quality by protecting Oregon’s groundwater program and development of comprehensive standards for surface water quality.

* Eliminate Field Burning in The Willamette Valley: The Governor’s budget provides $200,000 to enable the Department of Environmental Quality to phase out the practice of field burning the Willamette Valley, addressing a serious threat to public health in Western Oregon.

* Protect Oregon’s Coastline and Fisheries: The Governor’s budget provides $2 million to evaluate the social, economic, and environmental concerns associated with the proposed establishment of a system of marine reserves and marine protected areas along the Oregon Coast.

The Governor ended by encouraging Oregonians to look positively to the future during this difficult time and to reassure Oregonians he is working towards building a stronger, healthier more prosperous state after Oregon and the nation weathers these difficult economic times.

"I believe that hope, confidence, certainty, and reassurance will see us through this very tough time – and the hard choices I had to make in my 2009-2011 budget and are a window to Oregon’s future,” the Governor said in closing. “My message to the people of Oregon is: Have hope. Feel confident. Believe with certainty. And rest assured – together we will see a brighter day," Governor Kulongoski said. To view a copy of the Governor’s Recommended Budget, click this link: Governor's Budget