General Fund dollars are most frequently discussed for two reasons: most of the money comes from the individual and corporate income tax, and because it is the primary source of funding for education, health and human services, and public safety – all issues very important to Oregon’s citizens and communities. Because our current revenue structure is volatile, it is an important safety-net for the state to establish a stability fund for the critical programs and services funded with these dollars. If we make hard choices today - and if elected leaders and citizens alike draw the line on how much we spend - Oregon has the opportunity to create new stability for the future.

 

The Governor’s recommended budget spends $11.1 billion of the $11.2 billion in General Fund revenues over the next two years based on the most recent economic forecasts. The last $100 million is set aside for emergencies during the interim between legislative sessions. At 1 percent of revenues, this is an insufficient reservation of funds for emergencies or to protect against fewer revenues coming in than projected.

 

However, if we make and stick to the hard choices today and live within the ongoing General Fund revenues that we expect to collect under the current tax structure, we can begin to support a true rainy day fund in 2007-09. By 2009-11, we would not only have a rainy day fund; we could have almost $500 million per biennium available for investment in our future.

If we choose to adopt the practice of many other states - and that Oregon has chosen in the past - and rely on borrowing, putting off payment, or using a windfall for ongoing operations, the difference is astounding. Instead of beginning to amass savings for our future, we will continue to talk about "shortfalls" in 2007-09 and will not be able to begin investing in a rainy day fund until 2011-13 or even 2013-15. We must ask ourselves if one-time money today buys us the Oregon we want tomorrow. The Governor believes the answer is a resounding "no." At best, if Oregon continues down this path, it would be just one more band-aid instead of a real investment plan for our future.