Budgeting Issues

Oregon has just been named as one of 10 U.S. states at greatest peril of following California over a state budgetary cliff.

The national economy has begun to rebound but Oregon is likely to have a harder time. Unemployment is expected to remain high, which leads to lower tax revenues, which makes coming up with enough money to pay for schools and other public services difficult.

On top of high unemployment rates voter mandates that include long sentences for repeat criminal offenders mean some budget cuts are off limits.

California drew national attention to the risk that states would go broke when it had to issue IOUs to contractors and taxpayers this year because it simply could not pay for essential state services. So now other states are being studied to see if similar issues are surfacing around the country.

There are some options that Oregon voters have to counteract this possible catastrophe. They could give lawmakers more leeway in the spending and taxing decisions. Most importantly they could reverse the mandatory kicker rebate that Oregonians get when there is left over money, this prevents the state from acquiring any reserves for a rainy day.

These options are long term solutions though and some tough choices need to be made to save us in the next year or two.

http://www.oregonlive.com/politics/index.ssf/2009/11/oregon_among_10_states_at_grea.html

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