Sen. Chris Telfer: $680 million fund balances could prevent cuts

by Senator Chris Telfer

As the Legislature prepares to deal with serious budget challenges this February, there should be no stone left unturned in the search for solutions that protect core services. Unfortunately, broken lines of communication with state agencies and myopic budget practices make the job of efficiently balancing the budget difficult.

In preparation for the February session, I began asking the State Controller’s Division, which functions as the state accountant, for a snapshot of agency bank balances. Just as a family would look at its assets and cash-on-hand before making a yearly budget or major financial decision, I thought it was a good idea to get a grasp of the state’s cash position.

To my surprise, the State Controller’s Division would not immediately give me this information. In fact, it took almost a month to convince this office that a legislator, constitutionally responsible for writing a balanced budget, needed this basic financial data.

To be fair, the office said it was reluctant to release the information because it was unaudited. However, if the Legislature is to make informed decisions this February, having this type of information, even if it is preliminary, is vital. Having to wait months for bottom-line data that should be readily available is unacceptable.

When I finally had a chance to look at the information, I discovered what seems to be $680 million in what are called unrestricted fund balances. These are end-of-the-year account balances, separate from a safety net the Legislature put in place at the end of the 2011 session.

These large balances obviously piqued my interest. Upon further examination, I saw that there is $176 million in truly unrestricted funds in these ending fund balances and an additional $516 million of so-called committed resources. These are resources that could be reallocated by the Legislature to protect core government functions.

I believe that some of this money could be used by the Legislature in February to prevent cuts to classrooms, health care and prisons, and to continue to safeguard the state’s general fund reserves. Unfortunately, as I try to get greater detail on the origin and purpose of these balances, I am confronted by a shocking number of bureaucratic hurdles and obliviousness. No one seems to have a good answer or concrete, detailed information about this money.

This information gap is a symptom of a larger problem when it comes to the way the state budgets. A major reason this fundamental budgeting information is so difficult to acquire and parse is because it is rarely asked for. For too long, state budget writers have focused almost all of their attention on the state’s income tax-driven general fund spending, but turned a blind eye to these agency accounts that are driven by fees and other fund sources.

These balances could be the difference between shortening the school year or being able to keep students in the classroom. They could prevent the release of dangerous criminals from our prisons. And they could enable us to leave our carefully established reserve funds untouched and available to deal with further economic turmoil. But until we get a clearer picture of the state’s finances, it is going to be tough to make informed decisions.

It is time the Legislature broadened its budgeting perspective and scope. Especially in these difficult economic times, every dollar should be on the table, not just what’s brought in through state income taxes. If we are going to protect the services that matter most to Oregonians, we need to consider and examine these other funds that have for too long been absent from the budget discussion.

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Posted by at 11:09 | Posted in State Budget | 22 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    This article points out one of the reasons government fees should be considered taxes, as opposed to the semantic game the Oregonian and other Democrat party leaders are spinning about fees not being taxes.  As this article points out, agency fee derived positive fund balances can be legally transferred for general purpose uses by legislature and governor.  I would also note that government fee income is fungible, meaning the legislature in general can adjust general fund flows to an agency depending on how much fee income, if any, such agency levies and generates.  Many government fees are not even user based.  For instance, taxing hospital insurers as the Oregon Health Plan does is mostly a transfer of monies from those who buy private healthcare insurance to those who don’t (via the Oregon Health Plan).

    So, please:  Fees are generally speaking a subset of taxes.  Stop the obfusication coming from the Oregonian and some Democrat legislators.  The Oregonian used their misinterpretation of fees to level false readings on their PoliticalFact sham.

  • guest

    Like to see Chris Telfer acquire the position held by Kate Brown and Brown assume the position of being rebooted completely out of Oregon politics.

  • Anonymous

    HOPEFULLY’ THE COURT WILL FIND THAT THE LEGISLATURE CAN NOT BE IN SESSION IN FEBUARY UNLESS CALLED IN BY Kitzhauber as per the Oregon constitution prior to recent usurpations

  • Gary Coe

    Senator Telfer’s article is a great example of first thinking outside the box, ans second, the kind of real leadership that we so badly need in the legislature.
    There is a continuing need for legislators to use tactics and strategies commonly used in the private sector. When a business turnaround is needed, the first analysis has to be what all resourses are available, and that is exactly what Senator Telfer did. Brovo !

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