Oregon Student Association Report on Special State Legislative Budget Session:
Early Sunday morning (June 30, 2002) the Legislature passed out a budget to deal with the $860 million budget shortfall.
Third Special Session: Legislatively Approved Budget
The Legislature's approved budget for dealing with the $860 million shortfall includes:
Increase cigarette tax by 60 cents a pack November 1, subject to voter approval September 17: $65 million. Note: If the projected shortfall for the September forecast is more than $50 million, part of the new taxes would pay for up to $175 million in bonds to close the gap.
Issue bonds backed by a share of the new cigarette taxes: $50 million. Amount would restore $20 million to schools and $30 million to other services.
Create rainy-day fund (stability fund) for education by converting the Education Endowment Fund and immediately withdrawing $150 million for schools, subject to voter approval September 17: $150 million. Scaled down version of Ballot Measure 13. If voters reject the new measure, schools must absorb cuts.
Delay measure 88, a voter-approved measure that raised maximum state deductions for federal income tax payment from $3,000 to $5,000, effective this tax year. Delay phases in deduction over five years: to $3,250 in 2002, $3,500 for 2003: $108 million. Note: The top reduction will go up from $5,000 to $5,500 at end of phase-in period.
Defer payment to school districts, until next budget period: $211 million
Defer payment to community colleges, until next budget period: $56 million
Use most of the National Tobacco Settlement: $85 million
Selected budget cuts: $32 million
Use ending balance: $61 million (leaves $15 million in General Fund)
Use emergency fund: $12 million (leaves $20 million)
Reduce emergency fund amount, for pay increases: $23 million (Oregon University System - $3.2 million). State workers under union contracts would get already-negotiated increases in 2003, but agencies would have to find savings elsewhere. Management would not get second-year increases.
Increase Common School Fund distribution: $18 million
Use reserve for light-rail bonds: $10 million
Use balance in 911 fund: $9 million
Legislatively Approved Budget: Affect on Students
Under these proposals students face the following:
The OUS Budget in total was cut $6.4 million. - $3 million for technology funding at the system level and $3.4 million as part of the reduction in emergency funds for state worker pay increases.
As a result of the $6.4 million hit, undergraduate resident students do not face a tuition increase above the 3 percent tuition increase already in place from the 2001 legislative session.
However, non-resident undergraduate and graduate tuition will be increased for the 2002-2003 academic year above the scheduled 3 percent increase.
Community College Budget:
As a result of the shift in payment for community colleges, there was no additional selective cut to the community college budget.
Oregon Health & Science University:
The OHSU budget faces no direct cuts to OHSU and no across-the-board cuts.
Oregon Opportunity Grant:
The base budget for the Oregon Opportunity Grant was not cut. However, the re-referral of Ballot Measure 13 proposed by the House would negatively impact the Oregon Opportunity Grant by reducing the Education Endowment Fund by $150 million, reducing funds for the Oregon Opportunity Grant in 2002-03 and impact the number of grants offered in the next two biennia.
Student Child Care Block Grant:
The $1 million reinstated by the Governor prior to the third special session was not cut in the Legislatively Approved Budget.
The Legislature approved a final budget plan on Sunday, June 30.
The Legislatively Approved Budget now goes to the Governor. Though the Governor will wait until the week of July 8 before acting on the new budget-balancing package, he appears to already be wary of the parts of the Legislature's plan that call for bonding and borrowing. Specifically, the Governor has expressed concern with the authorization of $50 million in bonds to be repaid with the new cigarette tax. If the Governor vetoes part(s) of the budget-balancing package and state revenues further decrease, the Legislature could be back in Salem for a fourth special session.