Rapid growth of Oregon budget continues

Dan Lucas_July 2012_BW

by Dan Lucas

Last week the 2015-17 Budget Highlights Update (which includes 2016 “short session” actions) came out from the State of Oregon’s Legislative Fiscal Office.

Oregon General & Lottery Funds Budget

It’s an update to the current 2-year Oregon state budget – the 2015-17 Oregon budget passed in the 2015 Regular Session. As I noted last July, this General & Lottery Funds budget “reflects a staggering increase of $2.1 billion from the previous $16.8 billion budget.” That was on top of another staggering increase of around $2 billion from the previous budget cycle.

The General & Lottery Funds budget is the portion of the state budget that the Legislature has the most direct control over, and is what is generally discussed in the news when referring to the “Oregon state budget.”

Last week’s update contains charts that show the continual rapid growth of the Oregon budget. The charts show the General & Lottery Funds budget grew over $6.5 billion in just the past 10 years – from around $12.5 billion in 2005-07 to $19 billion now!

2015-17 LAB General and Lottery Funds History_March 2016

(click to enlarge)

In last week’s update, the current General & Lottery Funds budget is now $19.033 billion. That’s an increase of $134 million from when the current budget was first passed – $18.899 billion back last July.

2015-17 LAB General and Lottery Funds chart_March 2016

(click to enlarge)

Oregon All Funds Budget

Charts in last week’s update also show continual staggering growth in Oregon’s All Funds budget. The All Funds budget has grown $30 billion in just the past 10 years – it is now $71 billion!

2015-17 LAB All Funds History_March 2016

(click to enlarge)

2015-17 LAB All Funds chart_March 2016

(click to enlarge)

To read more from Dan, visit www.dan-lucas.com

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Posted by at 06:30 | Posted in OR 78th Legislative Session, State Budget | 18 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jeff Kropf

    Great article Dan, but this will not impact the coming elections with
    low information voters (including Kate Brown’s 300K new motor voter
    registrants) unless candidates boil it down to something understandable
    that impacts those voters lives. Candidates need to ask the voters if
    their personal income has grown as much as government spending has.
    Using these charts with personal income growth added in would be a very
    understandable visual that is easily grasped as it would point out that their lives aren’t getting better with massive government spending growth.

    That’s the point that has to be made as it hits home. It works because it’s based on human nature which Reagan used so successfully against Jimmy Carter when his main campaign theme was asking “are you better off than four years ago?”

    If you add in inflation,
    cost of groceries/gas, higher government fees, higher property
    taxes/rent and the chart would really look bad. Candidates gotta keep it
    simple to move voters away from the “Santa Clause” Democrats promising
    them the moon and frankly, the failing Legislative Republican message that
    Democrats are under funding K-12 education isn’t going to move the
    needle. That just falls into the Democrats trap of saying that throwing more money at the problem solves it.

    This budget reality has disaster written all over it when the next recession hits, (likely within the next 12 months) because of the obvious legislative overspending Dan’s article clearly shows. If you couple that with the hidden expenses (Medicaid expansion, Kate Browns union pay increases, PERS increases ect) that will hit the 17-19 budget hard, you get at least a three billion dollar hole in the next budget, which is why the Dems are banking on the job killing, union sponsored ‘gross receipts tax’ initiative passing in November, providing them with at least 2 billion to partially bail them out.

    Its interesting to note that the charts show the only time that government spending decreases or grows slowly (like our personal income) is during recessions when legislators have to cut back. Having been through that dance during five special sessions to cut budgets in 2002 when I served in the House, I can say it isn’t a fun exercise. Yet, you will also note that we barely cut the GF budget back after all those adjustments, while the total funds budget continued to grow as a result of increased federal funds and state fees. A similar result occurred during the last recession and now as Dan points out, the charts show truly explosive growth which I say cannot be sustained without massive tax and fee increases.

    Again, this is all inside baseball that won’t mean a darn thing in this fall’s elections here in Oregon unless the average voter understands how massive government overspending hurts them personally, especially in their wallet. Oregon Republicans have an opportunity to drive that point home to swing voters in what is likely to be another Republican wave election nationally rather than continue with their failed messaging that led to Oregon being the only state to miss the 2014 wave.

    The question is: will they recognize and seize the opportunity?

    Carpe Diem!

    • Maximums Prime

      I forgot about the new voters, 300,000? I wonder how many know they are actually voters?

      • Jeff Kropf

        Excellent question Maximums. Most of the political pros I talk with think they will not vote in large numbers, but I think it depends on whose or what message motivates them to actually vote. Even a small number of those folks voting can make a difference in close legislative elections, but perhaps also for statewide elections if this is truly a Republican wave year.

    • DavidAppell

      OR personal income has grown 33% in 10 years. So there is plenty of room for more state receipts.


  • Jack Lord God

    Well with all these large increases in the budget I’m sure we will have happiness right? I mean these are pretty big jumps so at least the left won’t constantly spew “the only reason our programs don’t work is not enough money” right? Our schools will finally be perfect, and we will have bike paths and windmills galore! “Mein Fuhrer! I can walk!”

  • thevillageidiot

    and they still could not find a way to increase education spending or to fill the coffers of PERS. Where is the money going? I don’t think the charts tell the whole story. if the lottery funds and general funds are funding all the state budget where is the other 50 Billion going?

    • DavidAppell

      Paying PERS is a contractual obligation of the state of Oregon.

  • HBguy

    Again, I’ll post a more comprehensive evaluation of the general and lottery budget from 1999 through 2017. Showing that it isn’t out of control, BUT that the Oregon Legilators priorities have changed from funding education to funding prisons, law enforcement and services to the needy and neglected children.
    My analysis takes into account population and inflation (The conservative favored TABOR approach), and analyzes the spending per person, and spending per catagory.
    Facts are important.

    • thevillageidiot

      So where do the other 2/3 of the funds go? relatively speaking it appears the “other funds” (not general or Lottery) are about the same proportion every biennium.

      • HBguy

        Blue Book: “Other Funds revenue generally refers to money collected by agencies in return for services. Legislative actions may allow an agency to levy taxes, provide services for a fee, license individuals or otherwise earn revenues to pay for programs. These Other Funds are often separate and distinct from monies collected for general government purposes (General Fund), and they may be based on statutory language, federal mandate and legal requirements or for specific business reasons. Some funds are “dedicated” in that the income and disbursements are limited by the Oregon Constitution or by another law. Other Funds may not be moved from one major program to another. Consequently, competition for these monies is limited.”

        So, licensing fees, fees for services, bonds, gas tax, etc.

        And the federal funds are things like medicare reimbursement, federal gas tax, etc, things that a state can’t really change.

        But, you raise a good point. That is, has the State been increasing fees, licensing costs, charges for services, and other items in order to increase it’s budgets in other areas? Or do the assessments fairly reflect the cost of the government services. If the former, then these “other funds” are a way to hide general tax increases on us all. If the latter then we can still look at how necessary all those government services are. After all, if you can simply adminstratively increase fees to cover your department budget, there’s no real need to tighten your belt or reduce staff or take a sharp pencil to a budget

  • 不错,不错,看看了!

  • Bob Clark

    Should look at the budget in relation to estimated state gross domestic product available at the State office of economic analysis.

    I’m too busy to look at this ratio, but suspect the state is expanding well beyond sustainable economic growth as state general obligation and unfunded liabilities continuing surging. The big problem occurs when the state economy inevitably slows from recent upcycle. This spurs panic as the state has over committed to social services and other committed expenditures. Medicaid is especially vulnerable to a crisis because the state was given an injection of federal dollars that are schedule to decline sharply in the next year and more. It was thought medicaid expenses would decline because of planned healthcare efficiency gains. But such hopes for such a bloated government bureaucracy are just plain laughable…kind of like the 2004 plan called the Ten Year Plan to End Homelessness (authored by the rubes at Portland City Hall).

    • DavidAppell

      This isn’t a difficult calculation. In the late ’90s the state budget was about 12-13% of OR GDP, and it’s about 15% now.

  • sanddollarscholar .

    I wish full PERS benefits had only been made available to individuals who remain full-time residents of the state of Oregon.

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