Oregon Gov. Kate Brown said Monday that lawmakers may need to slash $3 billion from the $85.5 billion fiscal 2019-21 state budget due to a drop in revenue associated with the COVID-19 pandemic.
“One of the many challenging results of the COVID-19 pandemic is the dramatic impact on our economy,” Brown said. “With many Oregon businesses restricted or shut down, travel suspended and jobs lost, we expect the revenue that we receive to fund state services will also be significantly reduced.”
She called her request to state agencies to reduce their budgets by 17% “as a planning exercise” to explore all options.
An updated state revenue forecast is expected May 20.
“We haven’t made any final decisions, and the agency plans serve as important information gathering at this point,” Brown said. “We know a potential cut of this magnitude would be extremely drastic.”
She added that state employees are working long hours to keep Oregonians safe, and she realizes that the state’s residents are relying on state services more than ever, and cutting critical state services will be a last resort.
The state may not need to make such drastic cuts if the federal government comes through with the $1 trillion bailout that state and local governments have been pushing the Trump Administration to approve, Brown said. The money would be used to bolster the state’s K-12 system among other items, she said.
Brown said she will continue to work with Oregon's congressional delegation, which is calling for more federal support.
Oregon signed a Western States Pact that includes California, Colorado, Washington and Nevada to consult on re-opening strategies and push for federal aid.
Governors and high-ranking lawmakers from states in the pact sent a joint
"Without federal support, states and cities will be forced to make impossible decisions — like whether to fund critical public healthcare that will help us recover, or prevent layoffs of teachers, police officers, firefighters and other responders," the letter said. "And, without additional assistance, the very programs that will help people get back to work — like job training and help for small business owners — will be forced upon the chopping block."
Though even the $1 trillion being considered will "not replace the decline in revenue that we forecast, it will make a meaningful difference in our ability to make up for COVID-19 revenue losses," according to the letter.
Oregon carries ratings of AA-plus from Fitch Ratings, Aa1 from Moody's Investors Service, and AA-plus from S&P Global Ratings, according to the Oregon State Treasury.
On May 7, Brown announced a phased plan to reduce physical distancing restrictions, saying Oregonians had "successfully flattened the curve of COVID-19 cases" with less than 100 people hospitalized statewide.
As of Tuesday, the state had recorded 3,286 COVID-19 cases and 130 deaths, according to the Oregon Health Authority.
