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Budget and Management Division

Agency Allotment Reductions | Sept 2010
Introduction
Forecast shows sharp drop in state revenues
 
On May 25, 2010, the Office of Economic Analysis issued a revenue forecast for the state General Fund that showed a sharp drop in the money available to fund state programs and services.  Based on current expenditure levels, state budget officials predicted at that time a deficit of $577.1 million for the current 2009-11 biennium.
 
On August 26, 2010, the Office of Economic Analysis updated the revenue forecast showing state resources had declined by another $377.5 million.  Based on this update, state budget officials now predict a total deficit of $954.6 million. 
 
Governor exercises allotment authority
  
To address the May 2010 budget deficit, Governor Kulongoski directed state agencies to prepare spending-reduction plans that brought the state budget back into balance, as required by the state constitution.  These plans were implemented in June 2010.
 
To address the most recent $377.5 million shortfall, the Governor and Legislature have agreed the Governor would again use his allotment authority to bring the state budget back into balance.  The Governor has directed state agencies to prepare spending reduction plans to cover the $377.5 million budget deficit.

Under ORS 291.261, the only authority the Governor has to balance the budget is to require across-the-board reductions in spending by state agencies. His directive applies to all General Fund “spending lines,” or appropriations, that the Legislature has approved.  Some agencies require just one appropriation from the Legislature, while others require many.  The Legislature determines the number of appropriations that each agency needs.

Agencies prepare lists of budget reductions


The June 2010 reductions required agencies to reduce each General Fund appropriation by about 4.6 percent of the two-year budget, which actually amounted to a nine-percent reduction because it occurred in the last 12 months of the biennium.
 
In order to handle the projected deficit of $377.5 million, every agency must reduce each of its General Fund appropriations by another 3.0 percent for the two-year budget, which amounts to an additional eight-percent reduction for the final nine months of the current biennium.
 
Agencies without General Fund have also experienced drops in revenue, and will reduce their budgets accordingly.  While their reductions do not appear here, you may contact those agencies directly to learn more about the impacts.
 
The links below will take you to each agency’s plan to meet the across-the-board General Fund reductions the Governor has ordered.  The Governor asked each agency to add the newest reductions to the bottom of the list they submitted in June 2010.  As mentioned earlier, some agencies have more than one document in their files, reflecting the multiple appropriations approved by the Legislature.
 
Next steps
 
The Governor and Legislature have agreed to a framework that prevents the worst of these cuts by using the approximately $240 million of federal assistance recently approved by Congress and a commitment of $34 million from state reserves.


The specific cuts and next step in this process will be determined after the Governor and Legislative Leadership have the opportunity to more thoroughly review agency reduction plans and evaluate available resources to try to mitigate further reductions while maintaining responsible levels of reserves.
 
 
Agency Allotment Reductions Summary 
 

Agency Allotment Reduction Plans
 
Administrative Services, Dept of Housing & Community Services, Dept of 
Advocacy Commission Human Services, Dept of 
Agriculture, Dept of Justice, Dept of 
Blind Commission Labor & Industries, Bureau of 
Business Oregon Land Use Board of Appeals 
Children & Families, Commission on Land Conservation & Development, Dept of 
Columbia River Gorge Commission Library, Oregon State 
Community Colleges & Workforce Development Long-term Care Ombudsman 
Corrections, Dept of Military Dept, Oregon 
Criminal Justice Commission Parole & Post-Prison Supervision, Dept of 
District Attorneys & Their Deputies Police, Oregon State 
Education, Dept of Private Health Partnership, Office of 
Employment Dept Psychiatric Security Review Board 
Employment Relations Board Revenue, Dept of 
Environmental Quality, Dept of Student Assistance Commission 
Fish & Wildlife, Dept of Transportation, Dept of 
Forestry, Dept of University System, Oregon 
Geology & Mineral Industries, Dept of Veterans' Affairs, Dept of 
Government Ethics Commission, Oregon Water Resources Dept 
Governor, Office of the Youth Authority, Oregon 
Health Science University, Oregon