Governor's Budget: Some 50-state context
Kari Chisholm
Today, Governor John Kitzhaber will release his proposed budget for the 2011-2013 biennium.
The two-year budget shortfall that the governor and legislators will need to close amounts to roughly $3.5 billion and change.
And, of course, states around the country are in the same boat. From high-tax, high-service states to low-tax, low-service states, just about everyone's got a budget gap. On Sunday, NPR ran a series of fascinating stories detailing budget gaps in New York ($10 billion), Georgia ($1.3 billion), and California ($25 billion).
(Sidenote: Check out the video for a lengthy interview on KGW Straight Talk with Gov. Kitzhaber about the budget.)
Here's my question: Is Oregon's shortfall especially big, or especially small, compared to other states?
Over at the Center for Budget and Policy Priorities (a national think tank akin to our own OCPP), they've pulled together a summary of the budget shortfalls in each of the 50 states.
By total dollars, Oregon's shortfall ranks #16. But total dollars is, of course, the worst possible way to look at the number.
As a percentage of state budget, Oregon's shortfall amounts to roughly 25% of the total budget - which ranks as the sixth-largest budget gap in the nation. 25% is, quite obviously, a huge number. This won't be closed by fussing around with the motor pool or accounting gimmicks. Just be glad we're not Nevada or Illinois, whose budget gaps amount to 45% of the state budget.
Because I'm sucker for population numbers, I took the CBPP's chart and added one more column -- the 2010 census numbers. In other words, when raising revenue or cutting spending, how much per person is the budget gap? (See my spreadsheet here.)
In Oregon, our budget gap translates to roughly $470 per man, woman, and child in our state. That ranks #8 overall. New Jersey and Illinois come in on top at $1194 and $1169, respectively, per person.
So yeah, our budget problem is substantial. And with the 30/30 and 16/14 splits in the Lege, both parties have to work together to resolve it -- while simultaneously finding a way to continue to invest long-term in Oregon's future.
Incidentally, since I can't resist the political implications, something to note: Texas and Minnesota both have huge budget gaps like Oregon's ($13.4 billion and $3.9 billion), while Indiana comes in at just $270 million, or 2% of the state budget (and just $42 per person). Expect to hear a lot about this if, as is expected, Governors Rick Perry (R-TX), Tim Pawlenty (R-MN), and Mitch Daniels (R-IN) run for president -- from Daniels, of course.
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5:41 a.m.
Feb 1, '11
Solving budget deficits are a good distraction - they make people think we as society are doing something important. And perception is reality - the things that will get cut are the things that are perceived “wasteful.” And there will be lots of discussion – which is excellent: everybody gets a chance to expound on their own priorities which obviously are not the same! Folks need to be reminded of that.
7:12 a.m.
Feb 1, '11
Good stuff, Kari. One quibble: Your spreadsheet from the CBPP shows that Oregon has a $1.8 billion gap, not a $3.5 billion gap. If it were updated to include the $3.5 billion figure, Oregon would have about the largest budget gap as a percent of the total budget in the United States, and the per capita shortfall would be around $900 per person, not $470.
9:25 a.m.
Feb 1, '11
The $3.5 billion is a two-year number. Since nearly all states operate on a one-year budget, $1.8 billion is the apples-to-apples comparison. (Though I suspect it's rounded up from somewhere around $1.76 or so.)
10:50 a.m.
Feb 1, '11
Thanks for doing this, Kari. I'd been curious about where we stood compared to others.
11:10 a.m.
Feb 1, '11
Kari, great work. I'm not sure how you could calculate this, but it would be interesting to know what the bill for the median household income is (roughly $48,000). Averages (means) can give a misleading sense of things if your population isn't evenly distributed.
1:49 p.m.
Feb 1, '11
Of course, there won't be a "bill", unless the Lege decides to raise taxes or fees -- and then, I'm sure, we'll hear lots about how the cost is distributed.
2:57 p.m.
Feb 1, '11
No, of course not. Poor choice of words. But the idea is to see what the "average," not "mean" citizen's share is.
11:50 a.m.
Feb 1, '11
Thanks for sharing the "Straight Talk" segment. I liked what the Governor had to say, and I truly hope this is a productive session.
Secondly, I'd like to point out that Laurel Porter asked Gov. Kitzhaber about the part of measure 67 that taxes revenues instead of profits. He agreed it was an issue, and would be willing to consider a bill to change it. (Of course, he said he would need to see how it would impact revenues from the measure, which is a fair question.)
I also provided you with some specific companies/examples you requested in Chuck's post.
2:08 p.m.
Feb 1, '11
Thanks, Jason. I responded over there.
12:50 p.m.
Feb 1, '11
Thanks for that data. My first thought was that maybe our budget per capita was really high in comparison. That turns out not to be the case. We fell on the low side of the middle.
Clearly, spending isn't the overwhelming problem that some want to make it out to be. What we have is a revenue problem. How we address that issue is up for debate, but at least we know what to address.
2:17 p.m.
Feb 1, '11
The whole country has a revenue problem: federal, state, city, and households. Hopefully, whatever revenue solution we come up with will solve everybody's revenue problem.
5:08 p.m.
Feb 1, '11
Thank you, Michael, for offering up such a clear-headed (and correct, IMO) observation.
The sooner we can start having that debate (instead of fake ones that demonize public employees, etc.), the better.