One thing we know about the budget is that it will change. The future always brings surprises, both good and bad. The Governor is confident that the strategies in this budget prepare us to address future challenges and opportunities by creating a framework of investment and raising the level of our vision.

We must be as prepared as possible for what may not go as well as we would like – as well as ready to make the most out of good fortune and positive returns on our investments.

• Initiatives – Voter-passed initiatives that increase or allow an increase in revenues or reduce demand for services from government could result in increased revenue for the state or decreased expenditures.

• Population Growth – An influx in human talent and increase in population due to job and economic growth through strategic investments in the economy can result in increased revenues for the state.

• Health Care Costs – Finding ways to reduce the cost of health care would save money for government as an employer and as a service provider in the health care field.

• Geopolitical – End to the war in Iraq or a decreasing presence could add a greater sense of security and could lead to increased consumer confidence and spending.

• Bond Rating – An improved bond rating results in lower interest costs on government issued debt.

• Economies of Scale – Continuing to find operational efficiencies would result in reduced overhead costs.

• Business Recruitment – Improved recruitment and retention of private businesses in Oregon above what is forecasted would lead to increased revenues.

• Initiatives – Voter-passed initiatives that reduce or restrict revenues or mandate a new or enhanced service from government add more demands to the state’s budget.

• Population Growth – A growth in population could mean an increased demand for government services, especially in mandated areas like PreK-12 education.

• Health care Costs – If inflation on health care continues to increase it will put increasing pressure on the state budget especially given demographic projections indicating a large growth in the 85 and older population.

• Geopolitical – Increased concern and longevity of the war in Iraq could result in further travel disruptions, oil supply issues, and further harm consumer confidence.

• Bond Rating – A downgrade in the state’s bond rating would cost the state money through increased interest rates on government issued debt.

• Stock Market – A sharp and major stock market correction could slow consumer spending and business profits, which could result in less revenue for individual Oregonians and state government.

• Federal Mandates – If the federal government requires additional expenditures from states or lowers matching rates for their contribution to government programs, the cost to Oregon would increase.