From the day I took office as Governor, I have been guided by one core belief: Oregon has a bright future. But if we are to take advantage of the opportunities the future offers, we must have a clear vision of what we want Oregon to be, and we must make the hard decisions needed to get us there.

 

For state government, that means we need to prioritize our budget choices, continue to exercise budget discipline and make targeted investments for the future. We must stop looking in the rearview mirror and start focusing on the road ahead. We must stop allowing the state budget to turn into a series of choices between bad options, and instead, treat it as an opportunity to pursue our vision for a bright future.

 

Two years ago, our unemployment rate was the highest in the nation. Our unstable PERS system threatened to send the state billions of dollars into debt. Our roads and bridges were crumbling.

 

I invited the Legislature and the citizens of our state to join me in tackling those problems the Oregon way – by rolling up our sleeves and getting to work. With your help, we have made significant progress in moving Oregon forward.

The Oregon economy is turning the corner. But state government still has more work to do to ensure that an improving economy results in an efficient state budget. Due to a combination of population growth, increased costs, a slow national economy and new requests for services, there are more demands than the state can pay for with existing resources. Under the old "current service level" approach to budgeting, state government would first determine how much money it needed to continue business as usual, and then search for the revenue to meet that spending target. For the upcoming biennium, that would mean finding an additional $1 billion just to continue business as usual, before considering any investments to move us forward. That approach would mean viewing the budget as nothing but a series of painful choices between supporting education or health care; between keeping seniors in their homes or serving children and pregnant women; between having an adequate state patrol function or building new prisons.

 

That is unacceptable. The days of business as usual are over in Salem. Instead of asking questions about where we’ve been, we ask the questions: "where do we want to go, and what is the most effective and fiscally responsible way to get there?"

 

I developed six Oregon Principles that drive every decision represented in my budget. Taken together, these principles form a vision of our state in which we: (1) provide our children and adults with the educational opportunities they need to succeed today and in the future; (2) take care of our most vulnerable citizens; (3) create family-wage jobs for Oregonians; (4) maintain the high quality of life we enjoy in Oregon; (5) ensure that our citizens are safe in their homes and in their communities; and (6) provide for a stable, efficient and accountable state government.

 

Based on the Oregon Principles, the primary goal of my budget is to invest in our long-term vision. That means making short-term sacrifices and tough choices. But just like when families invest for college, or when businesses invest for growth, we know the long-term rewards will be substantial.

 

My budget also continues the progress we have made in restoring discipline and making government accountable to the people of Oregon.

 

We are currently experiencing the result of a decade of operating on faith that our economy would keep growing as it did in the 1990’s, rather than planning for what would happen if it didn’t. I believe the state made a critical mistake – and missed a critical opportunity – by failing to set aside a portion of our state budget as a rainy day fund against future difficulty. Like a homeowner without insurance, we had little to fall back on when hard times hit. That’s why my 2005-2007 budget includes a long-term plan for a rainy day fund that I hope will provide the financial stability that state government needs.

 

This budget also continues a commitment I made when I took office to ensure that government lives within its means. Like the budget I developed two years ago, this budget does not use accounting tricks or borrow from the future to pay for current operating expenses. We will make tough choices today - paying as we go and investing in the future.

These choices can be painful. I know some would seek to avoid them by arguing for a borrowing package to provide more money for our schools and our vulnerable citizens. Although that might make things easier during this budget cycle, it would narrow our choices in the future and would jeopardize our chances of long-term economic and financial stability. It would also be an unwise way to use up the state’s bonding capacity. We have just one option: adjust our budget and map out a spending plan that will allow us to live within our means, while we work to improve our financial situation and invest in our future.

 

As I have said before, I believe that times of great economic difficulty are also times of great opportunity. We must continue to challenge ourselves to stay focused on creating the future we want rather than on the things we cannot do today. This challenge calls for Oregon to put aside issues of partisanship and ownership. It is time for all of us to think and act differently. In the months ahead, I will work with the Legislature and the public to make sure we make the best decisions possible about how to use the dollars citizens pay to their government. It will not be a simple task, but making tomorrow better than today isn’t simple. It means having a shared vision for a prosperous future and the hope that with hard work, perseverance and a good strategy, we will all enjoy that future together.

 

Sincerely

 

 

Theodore R. Kulongoski
Governor