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Business group�s big-picture budget approach gets notice Its proposal to rebalance Oregon finances wouldn�t require a raise in taxes By Greg Stiles Mail Tribune Everyone has ideas for how to rebalance the 2001-03 biennial state budget, and most have something they hope to gain. What might set the Oregon Business Association�s proposal apart is the bipartisan organization�s big-picture concept � the same approach that has allowed it to help Democrat U.S. Sen. Ron Wyden and Republican U.S. Sen. Gordon Smith find common ground on broader national issues. OBA presented a seven-point plan to the Senate Revenue Options Committee in December that would leave taxes as they are, cut education funding by no more than 1 percent and rebalance funds to within 8 percent of the current total deficit budget of $700 million. The Legislature last year approved a $12 billion biennial budget. "We�ve had a very positive response from the committee," said OBA President Lynn Lundquist, a former speaker of the state House of Representatives. Among the OBA�s recommendations: All agencies � with the exception of education � be required to meet the governor�s 3 percent final rebalancing proposal. That would provide an estimated savings of $335 million. Freeze all government positions that have not been filled in the last six months. Avoid cuts to K-12 and minimal cuts to community colleges and higher education. Even a 2 percent cut to K-12 would be significant, potentially resulting in larger class sizes, reductions in teacher staffing, loss of key counselors, and the absence of essential classroom supplies. Avoid tax increases, including any type of one-time or sustained income tax surcharge. The association would consider supporting a surcharge only if no alternative exists. Appoint an independent blue-ribbon panel to analyze the Public Employee Retirement System. The report should include all facts regarding PERS� present and projected future status. It should be completed within six months of the upcoming special session. Expedite an upcoming audit of the State Accident Insurance Fund, which may reveal excess funding available to staunch cuts in the state budget. Use Medicare upper payment limit ($120 million), tobacco settlement ($82 million), Common School Fund earnings ($42 million) to supplement the budget. The OBA also discourages using the $98 million ending balance carried over from the previous biennium because it "would dangerously deplete the state�s contingency reserves for the remainder of the biennium." Bear Creek Corp.�s Peter Kratz, senior vice president and general manager for product supply and an OBA board member said the recommendations are very practical. "From a business perspective, when you�re facing a tough economic time, these are things you look at," Kratz said. "What positions do you absolutely have to have filled? When you�re making cutbacks, you just don�t make across-the-board cuts. You want to make sure you�re not disadvantaging some of Oregon in health and welfare." He said one of the major reasons Bear Creek has been involved in OBA is to strengthen the region�s public policy voice. "We want to ask how it impacts not only the state, but Southern Oregon." Lundquist said the proposal was based on a $700 million shortfall, not the $900 million figure Gov. Kitzhaber began using last month. "Nobody knows what that figure will be until the next forecast comes out in March," Lundquist said. Ultimately, if the Legislature had followed OBA�s well-documented plea to create a rainy-day fund last year, the shortfall would�ve been less traumatic. "The Legislature was nearsighted � not just the last one, but over a period of time," said Lundquist, a Powell Butte rancher with a master�s degree in economics from the University of Connecticut. "I�ve always said you need to run government like a business. There�s not any business around, including mine, that can run like this." Reach reporter Greg Stiles at 776-4463 or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.