In the past, each agency has submitted its budget request to the Governor and the budget has remained organized by agency throughout the proposal and adoption process. This time, in order to identify the best investments for his 2005-07 recommended budget, the Governor directed state agencies to categorize each program and function according to which Oregon Principle it supports and to provide detail on the outcomes each achieves.

For each program, he asked agencies to identify:

The Governor required this review for each state program regardless of the source of funding. Whether programs are paid for with General Fund, other funds, federal funds or dollars that are legally dedicated to that program, he expects that state government will focus on how to spend every dollar wisely and for the clear benefit of all Oregonians. 

 

His first priority was to ensure that Oregon fulfills all of its obligations under the Oregon Constitution, federal law, or as required by the courts. After including these mandatory programs and services, he invested the remaining dollars in the programs and services that best achieve the Oregon Principles and that provide the most value to support his long-term vision for Oregon.

 

The Governor also committed to making his budget process accessible to the public. In fall 2004, the Governor launched the state’s first interactive budget website to help inform and involve the public.

 

The Governor’s website includes all state agency programs organized by the Oregon Principles so the public has access to the information used to make decisions about the budget. It also includes the Governor’s entire recommended budget, along with tools to help the public understand the budget. The website will be updated with new information and analyses throughout the legislative session and beyond, to serve as an up-to-date, comprehensive resource for the public.

It is important to recognize that there are four different categories of funds that are included in the state’s budget.

 

The General Fund receives the most public attention because it comes almost entirely (90 percent) from income taxes paid by individual Oregonians and Oregon businesses. This is also the most discretionary source of funds for the Governor and Legislature to spend.

 

Lottery Funds comprise another significant source of money in the state budget. About 33 percent of every dollar received from the lottery is dedicated by the Oregon Constitution to parks and natural resources, and the Education Stability Fund. There are also statutory dedications and debt service payments that account for another 29 percent. The remainder has been used primarily to pay for elementary and high schools and economic development efforts. Governor Kulongoski expects the Lottery Commission to take steps to expand current games, including line games, and increase the revenue collected and transferred by the Lottery Commission. His recommended budget uses the undedicated portion of additional proceeds to fund the patrol functions of the Oregon State Police.

 

Other Funds represents the largest single category of revenues received by the state. These moneys are funds that come from specific taxes (e.g. gas tax) or fees (e.g. professional licensing fees). They are legally dedicated either by the state constitution or state statutes to pay for specific state services or programs. Other funds do not include property taxes. In fact, all property taxes remain under the control of local governments and are not part of the state budget picture. However, property taxes are a very important revenue component for programs provided in local communities, including schools.

 

Neither the Governor nor the Legislature can use constitutionally dedicated funds to pay for programs other than those outlined in the Oregon Constitution.

The Governor remains committed to ensuring that every dollar paid by Oregonians is used efficiently. Any savings realized by operating programs more efficiently can be used to lower fees or charges, prevent fee increases, or support additional services to better meet the needs of those paying the fee in the first place.

 

The budget also includes the allocation of Federal Funds. Like other funds, these revenues are also legally dedicated to specific programs and services. Some federal dollars come to the state as a fixed amount for a specific program, but most are matching funds for state expenditures. For example, the federal government matches two dollars for every dollar the state invests in the Oregon Health Plan.

 

If the state removes its General Fund dollars from the Oregon Health Plan, the federal government keeps its matching funds. Those dollars are not dedicated to the State of Oregon; they are available only if the state operates the program, contingent on federal government approval.

 

For more information about the funds that make up the state’s total budget, visit the "Budget FAQ" section of the Governor’s budget website or the Budget and Management Division’s website: www.oregon.gov/das/bam/.