When Is A Budget Cut Not Really A Budget Cut?

From OPB.org, February 13 2009

Like their colleagues across the country, legislators in Oregon are examining every nook and cranny of the current year’s budget. They have to figure out how to fill what could be an $800 million gap in cash.

State Senator Margaret Carter

State Senator Margaret Carter

But some state agencies and social service advocates are warning lawmakers to avoid being pennywise and pound foolish.

Nothing packs a hearing room like possible budget cuts. As lawmakers prepared to get an earful from people worried about rollbacks to state programs, Democratic Senator Margaret Carter assured the audience that nothing was set in stone.

Senator Margaret Carter: “I know that there are those who would think that we’ve already made the decisions, but I want you to know: No, we have not.”

But they will have to make those decisions soon.

Lawmakers have to balance the budget for the fiscal year that ends in June. An $800 million hole effectively translates into a 20 percent over the next four months.

Some of those cuts are easy: delay hiring for a vacant position, or put a freeze on out-of-town travel. But those aren’t the kinds of cuts that brought out a laundry list of lobbyists and activists.

Senator Carter called them up to the witness stand five at a time.

Senator Margaret Carter: “Jim Elvin, Joanne Fuller, David Hidalgo, Chris Bouneff, Krichita White.”

Many of those who testified warned lawmakers that the unkindest cut of all may be the kind which ends up costing more money in the long run.

Here’s an example. One suggestion from the Department of Human Services is a 13 percent reduction to community based mental health treatment.

700 people would be turned out on the street. And Chris Bouneff, the director of the mental health advocacy group NAMI Oregon, told lawmakers the $4.1 million theyd save now would be more than eclipsed by increased costs elsewhere.

Chris Bouneff: “Those 700 people who are out in our community receiving lower cost treatment will end in our prisons. They’ll end up in our jails. They will end up in our emergency rooms. And it’s not a question of if, it’s a question of when. And the answer to that question is soon.”

The argument that making a cut now will cost more later isn’t limited to huge budget items.

Take the case of the Psychiatric Security Review Board. Its job is to decide whether patients can be released from the Oregon State Hospital.

Because it’s so small, the agency only had to come up with $50,000 worth of cuts. Nearly half of that would come from laying off one administrative assistant. But apparently that administrative assistant has some important duties.

Officials claim getting rid of the position would set off a chain of events that would wreak havoc, jeopardize public safety, and end up with the state getting sued.

That’s because the Review Board would be unable to hold enough hearings to meet its obligations under state law.

Bob Joondeph of Disability Rights Oregon says the Review Board is right to sound the alarm.

Bob Joondeph: “They’ve made an assessment that they have a legal obligation, and they’re afraid that if they don’t fulfill their legal obligation that there will be a legal action. And you know, I think that’s a responsible thing to tell the Legislature.”

Another proposed cut doesn’t risk a lawsuit but it could mean liquor sales would drop.

The Oregon Liquor Control Commission says it will have to trim hours at state-contracted liquor stores. That could drive away customers which would hurt the bottom line.

So that brings us back to Senator Margaret Carter, co-chair of the Ways and Means Committee. The Portland Democrat says she knows that in some cases, cutting now would cost more in the long run. But she says the Legislature’s hands are tied.

Margaret Carter: “We have a Constitutional requirement to balance the budget. And so you either have the money in the state or you don’t. And if you don’t, you have to do cuts. And those are the only choices that we have.”

The final choices on where to cut won’t come until later this month. But the work won’t be done then. Lawmakers will have just as many tough choices when they get started on the next two-year budget.