Kulongoski’s budget proposal

Gov. Ted Kulongoski unveiled his budget for 2005-07 Wednesday, stressing that his refusal to raise taxes in a time of budget shortfall means making "hard choices."

Though the budget carves up $11.9 billion – almost $300 million more than the current budget – demand for funds has grown faster than revenue. Kulongoski acknowledged that even programs that got an increase in funding would not have enough to keep pace with across-the-board increases in need for services.

For example, K-12’s allotment of $5 billion is a 1.7 percent increase over the ’03-05 budget, but it will not be enough to cover the 12,000 additional students.

"This is what you get with the revenue source we have," Kulongoski said.

According to Senator R-John Day Ted Ferrioli, vice chair of the senate revenue committee, the budget is nearly $1 billion short of keeping programs at current service levels.

For students at public universities, the budget is a mixed bag. Kulongoski’s pledge to boost education at every level includes funding for more than twice the current number of Oregon Opportunity Grants – grants that assist Oregon’s poorest university students- within two years.

The plan, however, also comes with a projected 5 – 7 percent tuition increase next year and an additional 5 percent hike in 2006-07.

"We view it as a positive day for students," Arlie Adkins, communications director for the Oregon Student Association said. "We could be a lot worse off. In the past two years, students have been faced with tuition increases above 10 percent… It’s time we stopped that trend. We need to stop students from being priced out of college."

The increased funding for the Oregon Opportunity Grant means that every eligible applicant will get money, in contrast with less than 75 percent this year. And though tuition has gone up, OSA will continue lobbying to keep costs down.

"We’ve asked the governor and we will ask the legislature when they reconvene in January to freeze tuition," Adkins said.

There’s also a bonding package for state universities which, including matching funds from other sources, will make $355 million available for capital construction.

Education gets the lion’s share of the state money – K-12 alone gets 42 percent – and all the education allotments together make up 55 percent of the budget.

The plan uses expanded lottery revenue to fund state police and establishes a rainy day fund. Kulongoski plans to begin putting money into the fund in the 2007-09 biennium. This plan doesn’t require legislative approval.

Expanding lottery operations to line games – slot-machine-style games compatible with existing lottery terminals – was one of the toughest calls he had to make, the governor said.

Ferrioli estimates the additional revenue from the new games will be about $100 million per biennium. The prospect of using that money to fund state police overruled Kulongoski’s opposition to the more enticing games.

"I don’t think the governor’s very happy to be in the gaming business," Ferrioli said. But after the voters rejected funding attempts such as Measure 30, he added, "With a faltering economy and high unemployment rate, the prospect of getting increased revenue is small."

Kulongoski pointed out that finding more funding would lead to shortfalls next biennium or debt in bonds. He also expressed a sense of frustration with the critics of his budget.

"If you want to tell me how we can make the Oregon tax system more fair, I am willing to sit down and have that conversation with anyone," Kulongoski said, adding that critics had better be prepared to offer solutions as well as point out flaws.