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Best Steps Forward: A Budget Balancing Path to Reset State Government & Overcome a Decade of Deficits

NCJ Number
Date Published
December 2010
78 pages
The recommendations presented in this report by the Oregon Governor's "Reset" Cabinet are expected, if adopted, to close almost two-thirds of the current State budget shortfall, and do so in a way that helps to achieve balanced budgets for many years to come.
The loss of one-time funds supporting the current budget for 2009-11 accounts for just over half of the deficit. The remainder of the deficit results from higher costs for payrolls, services, and supplies and greater demand, such as more Oregonians qualifying for safety-net services. Deficits in the range of 20 percent are expected to persist through 2019. Short-term or temporary solutions to the immediate deficit are not feasible, and the need to "reset" State government is all the more compelling. Solutions to the deficits the State is facing must be ones that realign spending and revenues for the decade ahead. This report provides details on six steps that can address the deficit in 2011-13 and continue to narrow the deficit in later years. The first step is to carry forward interim budget reductions enacted in 2010 ($1,014.1 million). The second step is to keep State employee compensation in step with all working Oregonians ($280.7 million). The third step is to keep school employees' compensation in step with that of State employees ($252.6 million). The fourth step is to modify retiree benefits to keep PERS costs affordable ($258.6 million). The fifth step is to hold the line on spending for services and supplies. The sixth step is to implement "reset" report recommendations ($295.6 million). If all of these recommendations are adopted by the 2011 legislature and the Governor-elect, the shortfall of the budget will be reduced from 20 percent to 7 percent. 3 tables and 6 figures