Senator Brian Boquist: Democrat leadership owes Oregonians an apology

Despite repeated denial, state report proves billions in “other fund” monies are still available
By State Senator Brian Boquist

Salem, OR — For almost a year, Senator Brian Boquist (R-Dallas) and other Republicans have been stating that state government has billions of dollars available in agency accounts that could be used to help balance the budget. Democrats have consistently turned their backs on these funds in favor of other revenue sources, flatly denying their existence. A recently released state report again clearly states that billions of dollars in “unreserved, undesignated fund balance”¦ was available for spending.” [1]

“Democrat leadership owes Oregonians an apology for ignoring these funds,” said Boquist. “Families are hurting, and important services are being threatened. It is unconscionable to think that special interests might have been driving leadership to deny the facts so other revenue options could be pursued.”

Democrats have made it a habit to bash the idea that government might have enough money to pay for the services that matter most to Oregonians:

Sen. Brian Boquist , R-Dallas, combed through agency budgets and met with legislative fiscal staff to come up with a list of about $1.5 billion in extra money that agencies have in their budgets. Of that, the Republican plan uses $500 million.

House Speaker Dave Hunt , D-Gladstone, questioned the legitimacy of most of Boquist ‘s findings, saying the so-called agency reserves are more of a “snapshot” of their accounts. At any one time, those funds could be far below what Republicans are counting on to pay for other state programs, Hunt said.

The Oregonian, GOP offers an Oregon budget free of new taxes, May 13, 2009,

Michael Cox, a House Democratic spokesman, says this claim is a farce.

The Republican spending plan relies on $1 billion in new revenue that he says is “plucked out of thin air,” and that if the Democrats actually had that money, they “could do a lot better for education” than the Republican budget does.

Bend Bulletin, In Salem, 2 budget plans and plenty of politics, May 25, 2009

The state reports having more than $2.5 billion of these non-tax monies, generated from fees and other sources – and Telfer and her allies want the state to tap it.

When she joined with other Republicans to broach the idea in May, she was widely ridiculed by Democrats who said her ideas were a red herring thrown up to defeat tax increases.

Bend Bulletin, Possibility of untapped millions gets a new look, December 5, 2009

The CAFR, prepared by the State Controller’s Division at the Department of Administrative Services to analyze the position of the Oregon’s fiscal affairs, states:

“As of June 30, 2009, the State’s governmental funds reported combined ending fund balances of $4.4 billion. Of this amount, approximately 25.1 percent was reserved for nonspendable items, such as inventories and permanent fund principal, or for specific purposes, such as debt service. The remainder was classified as unreserved, undesignated fund balance and was available for spending, subject to statutory and constitutional spending constraints.” [2]

The CAFR was released under the authority of Governor Theodore Kulongoski and bears the signature of Secretary of State Kate Brown who are both elected Democrats who served in the Legislature earlier in their political careers.

“Any Democrat who calls me a liar now will be calling the two most prominent elected Democrats in the State a liar too,” said Boquist. “What an ironic turn of events. Yet again, another “˜snapshot’ of state fiscal affairs shows large sums of money unreserved and undesignated. How many snapshots is it going to take?”

Early in the 2009 Legislative Session, former Senator Margaret Carter – Democrat, then the Co-Chair of the Ways & Means Committee, issue a memo to all Senators saying the Legislature had the authority to spend or transfer any statutory ending fund balance as it saw fit. It was backed by a legal opinion, and used as authority in to re-program a small amount of other funds while billions were left untouched.

Senator Boquist then introduced SB 931 calling for the creation of an Other Funds Reserve based on billions in ending fund balances. The bill was opposed by the Democrat majority in the Legislature thus did even get a hearing. The “red hearing” response was some of the ending fund balances were required by the Oregon Constitution. While a small amount does fall under the Constitution, the Legislature has the power to refer changes to the citizens of the State for a vote. Senator Boquist plans to re-introduce a bill creating an Other Funds Reserve in the so-called February 2010 Emergency Session as the Governor’s CAF Report claims an ending fund balance of $4.4 billion.

Other Funds are comprised of fee revenue and other funding streams that don’t include the income tax. Agencies generally have an ongoing authority to collect and spend Other Funds. The legislature has abdicated much of its budget authority to agencies in the arena of Other Funds, giving only a cursory examination on a bi-yearly basis but for the most part trusting agencies to manage their fiscal affairs.

Attached is an extract from the Comprehensive Annual Financial Report release this week by the Governor and signed by the Secretary of State.