The Life Cycle of a Budget The Full Cycle of a State of Alaska Operating Budget Request.
BUDGET Full Budget
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LAYING THEFOUNDATION
GOVERNORSBUDGET MESSAGETo the Citizens of Oregon
We have an opportunity this year -- to set Oregon on a course to a bright future.
It wont be easy. I believe the next biennium will be our most difficult, which is why we have toapproach it together and approach it correctly. We are at or near a low-point in state revenues,but we are at or near the highpoint in terms of human need. Balancing the next budget willrequire some very difficult choices. It will require managing to a clear set of priorities and in away that reflects our long-term vision. And it will require leadership with the courage and
discipline to look beyond the next two years to where we want Oregon to be in 2020 and beyond.
This budget marks the first step in shifting state investment from addressing problems after theyhave developed to preventing them in the first place. It funds proven job creation programs toget Oregonians back to work in the short-term and supports early childhood investment as thefoundational element to achieving long-term education and economic objectives for Oregon.
Think of our state government as a house that was built many years ago, and Oregonians as thefamily that has been living in it for generations. Its design may have made sense when it wasbuilt, but the family -- its needs and the way it lives -- are different now. The rooms are thewrong size and there are too many of them. There is no insulation and the windows are drafty, so
it costs more than our family can afford to keep it up. The foundation is cracked and the roofneeds a complete replacement. There comes a point when patching things up just wont workanymore: we need to rebuild a house that is affordable and is built for the way we live.
Early Childhood
If our central challenge is to rebuild the house of Oregon, then successful investment in thedevelopmental needs of children is the foundation on which our house will be built.My budget will ensure our children enter school ready to learn by unifying disparate programs,streamlining administrative costs and measuring outcomes.
Job Creation
This budget continues proven programs and services that are vital to creating, retaining andattracting small and large businesses that provide sustainable, living-wage jobs for Oregonians.It includes additional investment in the Oregon Innovation Council (Oregon InC), an effectivepublic/private partnerships that converts university research into market-ready products and jobs.
Education
This budget establishes a stable funding floor for Oregons K-12 public school system. Itprovides $5.56 billion for the biennium. However, fifty-two percent ($2.9 billion) will be
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distributed during the first school year of the biennium, equivalent to a $5.8 billion budget forschool funding. The effect is to provide an increase in state funding for the 2011-12 school year.Front-loading the funding also provides a year to find cost savings through consolidation andother efficiencies to maintain this level of classroom support during the 2012-13 school year. Inpost-secondary education, this budget focuses on undergraduate education and access.
Health Care
The Oregon Health Plan and long-term care services are profoundly impacted by the loss of one-time funding sources, like federal stimulus revenue. This budget builds a platform to transformour health care delivery system in the second year of the biennium through integration ofservices; incentives for prevention; and community-based management of chronic conditions.
Public Safety
The cost of corrections has grown dramatically over time and now comprises 53 percent ofpublic safety spending. Despite reduced funding levels, this budget funds Measure 73reimbursements to counties, and avoids early release of adult offenders. However, such cost
increases are not sustainable, and I am recommending a comprehensive review of sentencingguidelines for consideration during the 2012 legislative session.
We should not underestimate the magnitude of these challenges; but at the same time, we shouldnever question our ability to successfully meet them. If we do this right and if we do ittogether the 2011-13 biennium can become the floor, the foundation on which we willrebuild Oregon.
Together we can rebuild a state where our children are ready to learn before they get to school;where they have the resources and attention to learn and our teachers have the time and supportto teach; where drop-out rates are steadily falling and graduation rates are steadily rising; whereall Oregon high school graduates are prepared to pursue a post-secondary education withoutremediation; and where 80 percent of them achieve at least two years of post-secondaryeducation or training. We should live in a state that creates family wage jobs and careerpathways that lead to those jobs, and where the average per capita income exceeds the nationalaverage in every region.
In short, we must view the upcoming biennium as the first step toward our vision for the future a more prosperous and sustainable Oregon.
Sincerely,
John A. Kitzhaber, M.D.Governor, State of Oregon
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Table of Contents
GOVERNORS MESSAGE
INTRODUCTION
THE ECONOMIC AND REVENUE ENVIRONMENT .................................................................................................. A-1
2011-13GENERAL FUND/LOTTERY BUDGET (Graphs) ..................................................................................... A-12
2011-13ALL FUNDS BUDGET (Graphs) .............................................................................................................. A-13
STATE OF OREGON ORGANIZATION CHART......................................................................................................A-14
PROGRAM AREA AND AGENCY INFORMATION
EDUCATION..............................................................................................................................................................B-1
Community College and Workforce Development, Department of.................................................................B-6
Early Learning Council ......................................................................................................................................B-9
Education, Department of.................................................................................................................................B-12Student Assistance Commission, Oregon........................................................................................................B-16
Oregon University System...............................................................................................................................B-18
Teacher Standards and Practices Commission................................................................................................B-21
HUMAN SERVICES ...................................................................................................................................................C-1
Blind, Commission for the .................................................................................................................................C-5
Human Services, Department of ........................................................................................................................C-7
Health Authority, Oregon.................................................................................................................................C-12
Long Term Care Ombudsman..........................................................................................................................C-17
Private Health Partnerships, Office of .............................................................................................................C-19Psychiatric Security Review Board..................................................................................................................C-20
PUBLIC SAFETY ...................................................................................................................................................... D-1
Corrections, Department of ............................................................................................................................... D-4
Criminal Justice Commission, Oregon ............................................................................................................. D-8
District Attorneys and Their Deputies ............................................................................................................D-10
Justice, Department of .....................................................................................................................................D-11
Military Department, Oregon..........................................................................................................................D-14
Oregon Youth Authority..................................................................................................................................D-16
Parole and Post-Prison Supervision, State Board of ......................................................................................D-18
Police, Department of State.............................................................................................................................D-19Public Safety Standards and Training, Department of ...................................................................................D-22
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ECONOMIC AND COMMUNITY DEVELOPMENT .....................................................................................................E-1
Business Development Department, Oregon.....................................................................................................E-3
Employment Department....................................................................................................................................E-6
Housing and Community Services Department ................................................................................................E-9
Veterans' Affairs, Department of .....................................................................................................................E-11
NATURAL RESOURCES ............................................................................................................................................F-1
Agriculture, State Department of .......................................................................................................................F-4
Columbia River Gorge Commission..................................................................................................................F-6
Energy, Department of .......................................................................................................................................F-7
Environmental Quality, Department of..............................................................................................................F-9
Fish and Wildlife, Department of.....................................................................................................................F-11
Forestry Department, State...............................................................................................................................F-13
Geology and Mineral Industries, Department of.............................................................................................F-15
Land Conservation and Development, Department of....................................................................................F-17
Land Use Board of Appeals .............................................................................................................................F-19Lands, Department of State..............................................................................................................................F-21
Marine Board....................................................................................................................................................F-23
Parks and Recreation Department....................................................................................................................F-25
Water Resources Department...........................................................................................................................F-27
Watershed Enhancement Board, Oregon.........................................................................................................F-29
TRANSPORTATION .................................................................................................................................................. G-1
Aviation, Oregon Department of....................................................................................................................... G-3
Transportation, Department of .......................................................................................................................... G-5
CONSUMER ANDBUSINESS SERVICES ................................................................................................................... H-1
Accountancy, Oregon Board of......................................................................................................................... H-3
Chiropractic Examiners, Board of..................................................................................................................... H-4
Clinical Social Workers, State Board of ........................................................................................................... H-5
Construction Contractors Board........................................................................................................................ H-7
Consumer and Business Services, Department of ............................................................................................ H-8
Counselors and Therapists, Board of Licensed Professional.........................................................................H-10
Dentistry, Oregon Board of ............................................................................................................................. H-11
Health Licensing Agency, Oregon..................................................................................................................H-12
Health-Related Licensing Boards
Dietitians, Board of Examiners of Licensed..............................................................................................H-14Mortuary and Cemetery Board, Oregon .................................................................................................... H-15
Naturopathic Examiners, Board of............................................................................................................. H-16
Occupational Therapy Licensing Board.................................................................................................... H-17
Radiologic Technology, Board of ..............................................................................................................H-18
Speech-Language Pathology and Audiology, Board of Examiners for ...................................................H-19
Veterinary Medical Examining Board, Oregon State ...............................................................................H-21
Labor and Industries, Bureau of...................................................................................................................... H-22
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CONSUMER ANDBUSINESS SERVICES (cont.)
Medical Board, Oregon...................................................................................................................................H-24
Nursing, Oregon State Board of...................................................................................................................... H-25
Pharmacy, Oregon Board of............................................................................................................................ H-27
Psychologist Examiners, Board of .................................................................................................................. H-28
Public Utility Commission ............................................................................................................................. H-29
Real Estate Agency..........................................................................................................................................H-31
Tax Practitioners, State Board of .................................................................................................................... H-32
ADMINISTRATION .....................................................................................................................................................I-1
Administrative Services, Department of.............................................................................................................I-3
Advocacy Commissions Office, Oregon............................................................................................................ I-6
Employment Relations Board .............................................................................................................................I-7
Government Ethics Commission, Oregon..........................................................................................................I-9
Governor, Office of the......................................................................................................................................I-11
Liquor Control Commission, Oregon...............................................................................................................I-13Public Employees Retirement System..............................................................................................................I-15
Racing Commission, Oregon ............................................................................................................................I-18
Revenue, Department of....................................................................................................................................I-19
Secretary of State...............................................................................................................................................I-21
State Library.......................................................................................................................................................I-23
Treasurer, Office of State ..................................................................................................................................I-24
LEGISLATIVE BRANCH ............................................................................................................................................J-1
Indian Services, Commission on.........................................................................................................................J-2
Legislative Administration Committee...............................................................................................................J-3
Legislative Assembly...........................................................................................................................................J-4
Legislative Counsel Committee ..........................................................................................................................J-5
Legislative Fiscal Officer ....................................................................................................................................J-6
Legislative Revenue Officer................................................................................................................................J-7
JUDICIAL BRANCH.................................................................................................................................................. K-1
Judicial Department, Oregon............................................................................................................................. K-3
Judicial Fitness and Disability, Commission on............................................................................................... K-5
Public Defense Services Commission ..............................................................................................................K-6
MISCELLANEOUS
Emergency Board ...............................................................................................................................................L-1
Tax Expenditure Report .....................................................................................................................................L-2
State and Local Shared Services ........................................................................................................................L-6
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CAPITAL BUDGETING
Capital Construction..........................................................................................................................................M-1
Program Funding Request Summary...........................................................................................................M-2
2011-13 Recommended Projects .................................................................................................................M-3
2013-15 Estimated Requirements ................................................................................................................M-5
2015-17 Estimated Requirements ................................................................................................................M-7
Bonded Indebtedness.........................................................................................................................................M-9
Borrowing Authorizations..........................................................................................................................M-13
Private Activity Bond Volume...................................................................................................................M-15
Table A - Recommended State Bond Issuance Authorization .................................................................M-23
Table B - Long Term Obligations and Authorities ...................................................................................M-24
Table C - General Obligation Debt Summary...........................................................................................M-25
Table D - Summary of General Obligation Debt Service.........................................................................M-26
Table E - Summary of Debt Service Requirements for State Bonded Indebtedness by Fund ................M-27
Table F - Capital Financing Six-Year Forecast Summary........................................................................M-29
APPENDIX
GLOSSARY............................................................................................................................................................... N-1
REVENUE SECTION
Revenue Summary............................................................................................................................................. O-1
General Fund Revenues (Schedule I) ...............................................................................................................O-3
General Fund Summaries .................................................................................................................................. O-4
Lottery Funds..................................................................................................................................................... O-6
Combined General Fund and Lottery Funds Summary ................................................................................O-10
Non-General Fund Summaries........................................................................................................................ O-11Other Funds and Lottery Funds Revenue by Source (Schedule II)............................................................... O-14
Receipts from the Federal Government (Schedule III) .................................................................................O-15
All Funds Summaries ......................................................................................................................................O-20
Summary of Detail Revenues by Program, Agency, Fund (Schedule IV)...............................................O-21
Education Program Area ............................................................................................................................ O-21
Human Resource Program Area ................................................................................................................ O-29
Public Safety Program Area....................................................................................................................... O-36
Economic and Community Development Program Area ......................................................................... O-46
Natural Resources Program Area...............................................................................................................O-52
Transportation Program Area.....................................................................................................................O-70
Consumer and Business Services Program Area ...................................................................................... O-74Administration Program Area.................................................................................................................... O-86
Legislative Branch Program Area.............................................................................................................. O-98
Judicial Branch Program Area .................................................................................................................O-103
Miscellaneous Program Area................................................................................................................... O-105
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EXPENDITURE SECTION
Current Service Level....................................................................................................................................O-107
Schedule of Total Expenditures by Program, Agency, Fund (Schedule V) ................................................O-108
Summary of Expenditures by Category by Fund (Schedule VI) ................................................................. O-124
Number of Full-Time Equivalent Positions (Schedule VII) ........................................................................O-125
Statutory Limits (Narrative) .......................................................................................................................... O-129
INDEX ..................................................................................................................................................................... Q-1
STAFF PAGE
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-1 The Economic and Revenue Environment
ECONOMIC PERFORMANCE AND OUTLOOK
Recent Performance
As of fall 2010, the numberof nonfarm jobs in Oregonwas the same as when the
decade began. Labor
markets in other states havenot fared any better.
Although job growth over
the decade as a whole hasmatched that seen
elsewhere, employment in
Oregon has gone through
relatively large swingssimilar to the states typical
experience during past
business cycles. Large localjob gains during the middle
of the decade were
sandwiched between tworelatively severe downturns
that fully offset them
(see Figure 1).
Figure 1: No Job Gains this Decade
Nonfarm employment
1.55
1.60
1.65
Per capita personal incomegrew at a modest 2.6
percent annual rate between2000 and 2009. Adjusting
for inflation reduces these
income gains by half. The
1930s is the only decadeon record when income
gains were slower
(see Figure 2). Oregonsincome gains of recent
years have lagged behindthose seen in allneighboring states.
The recession that began atthe end of 2007 wasparticularly painful. By
mid-2009, employment in
Oregon had fallen by more
1.70
1.75
2000 2001 2003 2005 2006 2008 2010
1.20%
1.21%
1.22%
1.23%
1.24%
1.25%
1.26%
1.27%
Millions (left axis)
Share of U.S., %
Figure 2: Disappointing Income Growth
Personal income, annualized % change
-2%
0%
2%
4%
6%
8%
10%
12%
1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000-09
Oregon Washington Idaho California Utah United States
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-2 The Economic and Revenue Environment
than 8 percent from its pre-recession peak level. Of all the downturns on record, only the 1980 recession
was harder on the local labor market. At that time, statewide employment fell by nearly 12 percent.
Oregons severe recessionand lackluster recovery
have been characterized by
a credit crunch among
many of its firms togetherwith sharp corrections in
the states largest housing
markets. Residentialconstruction activity and
house price appreciation
have fallen to levels notseen since the timber
industry restructured during
the early 1980s (see Figure3).
Across Oregons industries,local manufacturing firms
have suffered through thelargest net job reductions
over the decade. Sharp
recessionary job lossesexacerbated the long-run
structural decline of
domestic manufacturingoperations, resulting in a
28 percent employment
decline in the industry.Despite these large losses,
Oregons manufacturing
payrolls have performed
better than those elsewhere
in the U.S. Nationwide,manufacturing employment
has fallen by 33 percent thisdecade with old-line textile
and vehicle operations in the Midwest and South being hit harder than Oregons relatively diverse andmodern mix of producers (see Figure 4).
Figure 3: Housing Hits Bottom
0
5
10
15
20
25
30
35
40
45
50
1975 1980 1985 1990 1995 2000 2005 2010
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Housing permits issued, ths ( left axis)
Median sales price (existing homes, y/y % change)
Figure 4: Expanding & Contracting Industries
Employment, percent change Jan 2000 to Oct 2010
-30% -20% -10% 0% 10% 20% 30% 40%
Manufacturing
Construction
Transportation & Utilities
Feder al Government
Re tail Trade
Financial Activities
Wholesale Trade
Prof essional & Business Svcs
Total Nonfarm
Other Services
Local Government
State Government
Leisure & Hosp italityEducation & Health Svcs
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-3 The Economic and Revenue Environment
In addition to manufacturing operations, construction firms have also suffered from extreme job lossesduring the most recent business cycle, which has been characterized by imbalances in residential and
commercial real estate markets. Over the decade as a whole, the number of construction jobs has fallen
by 21 percent statewide. Relative to its 2007 peak level, construction employment has fallen by 37percent.
In general, consumer-oriented service industries and retailers for which demand is tied to populationgrowth have fared the best over the decade. In particular, employment in education and health serviceshas risen by 32 percent. Demand growth in education and health firms can largely be tied to
demographic shifts. The baby-boom population cohort is spending an increasing amount on health
services while their children are now enrolling in colleges and universities en masse.
Although not as successful as health and education firms, most of Oregons consumer service industriesalso added jobs during the decade. Employment among leisure and hospitality firms has risen by 13
percent. Wealth losses, a weaker dollar and the terrorist attacks of 2001 have resulted in a larger shareof entertainment budgets being spent close to home.
Statewide, the unemployment rate more than doubled over two years from a low of 5 percent in May2007 to 11.6 percent in May 2009. The regional pattern of job losses across the state largely matches the
pattern of weakness in housing markets. Labor market conditions deteriorated the most in Central and
Southern Oregon where housing corrections were most severe. In particular, the unemployment rates inDeschutes and Crook counties more than tripled during the downturn (Figure 5). Labor markets have
typically held up better in counties with smaller housing bubbles and those with a large degree of
exposure to agriculture. As such, many of the top performing labor markets are located in EasternOregon. Within the Willamette Valley, Benton and Polk counties saw the smallest increases in
unemployment.
6.3%
MULTNOMAH
MARION
CLATSOP
WASHINGTON
COLUMBIA
DOUGLAS
LANE
LINCOLN
POLK
TILLAMOOK
COOS
DESCHUTES
MALHEURHARNEYLAKEKLAMATHJACKSONJOSEPHINE
CURRY
HOOD
RIVER
BENTONLINN
JEFFERSON
CROOK
WALLOWAUMATILLA
MORROWGILLIAM
WASCO
SHERMAN
WHEELER
GRANT
BAKER
UNION
CLACKAMAS
Below 6% 6 to 7.5% Over 8 %
YAMHILL
6.5 to 8%
Source: Oregon Employment Department
9.0% 8.2%
8.5%
8.0% 9.5%
7.9%
8.6%4.7%6.3%
5.4%
5.7%
7.5%
6.0% 8.6%
5.7%
6.3%
5.2%
5.7%
10.5%
11.8%
16.2%
6.8%
8.4% 8.2% 11.6%
5.2%
7.4%
7.3%
8.3%
6.2%
8.0%
5.3%
7.2%
7.6%
6.5%
OR average=6.6%
Figure 5: Rise in Joblessness Across Regions
Unemployment rate: Percentage point increase trough to peak
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-4 The Economic and Revenue Environment
Outlook
Key Assumptions
Technically, economic recovery began in both Oregon and the U.S. as a whole during the summer of2009. At that time, growth in output and consumption resumed, and mass layoff announcements becamerare. Despite these improvements, the economy is still growing beneath its potential more than one year
into the recovery, with significant job gains yet to materialize.
As is usually the case in the aftermath of financial crises, the current economic recovery is expected tobe a slow one by historical standards. Demand growth among interest rate-sensitive industries such as
housing, vehicles and other durable goods often lead the way during rapid economic recoveries. This
time around, relatively little boost is expected while consumers make long overdue corrections to theirsavings behavior, and the housing sector returns to balance.
Consumers will not lead during the recovery. Instead, exports and business investment will fuel demandgrowth. Among the first industries likely to come back are professional and business services, health
care services, technology manufacturing and retail trade.
The housing sector will remain weak well into the economic expansion, and will do little to fuel growthgoing forward. That said, housing is no longer creating the same headwind as in recent years
Residential permitting and construction activity have likely hit bottom, as has the volume of home sales.However, house prices still have some room to fall. Prices will remain soft until excess inventories of
homes are worked off. Despite a slow pace of homebuilding, inventories remain stubbornly high due
largely to a growing supply of foreclosed, bank-owned, and other distressed property sales.
In addition to housing-related industries, state and local governments will represent a drag on growthgoing forward. It takes several months for changing economic conditions to be fully reflected in
government finances. With tax revenues still depressed, and the aid to states and localities associated
with federal fiscal stimulus programs now being phased out, further contractionary state and localspending and tax policies will be required going forward.
The impact of federal fiscal and monetary policies on the economic outlook is mixed. Federal fiscalpolicies are providing a decreasing amount of support to private sector growth. Federal home buying
incentives and hiring of 2010 Census workers are now a thing of the past, and stimulus spending
associated with the American Recovery and Reinvestment Act will fade over the next few months
While fiscal policy is no longer supporting growth, monetary policy remains very accommodating, withreal interest rates near 0 percent and a second round of quantitative easing underway.
Growth in the global economy and favorable terms of trade will help fuel U.S. exports. Exports to Asiaare of particular importance to Oregons producers. With developing countries in Asia expected to
maintain above-average rates of growth, and the dollar expected to depreciate vis--vis the Chineseyuan, trade will continue to support the recovery going forward.
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-5 The Economic and Revenue Environment
Oregon Outlook
Oregons economic recovery will persist, albeit at a painfully slow rate. Job gains will remain belowtrend through most of 2011. After next year, trend-like job growth on the order of 2 percent per year is
expected throughout the medium term. Under these assumptions, total employment will not return to itspre-recession peak level until late 2014.
In keeping with the outlook for employment, personal income gains will remain below trend for severalmore months. In 2012 and beyond, personal income will grow at annual rates between 4 percent and
6 percent, matching what has been seen during past expansions.
Oregons industrial structure and ties to rapidly growing Asian markets position the state to join in thenationwide economic recovery. The recovery will be led by business investment and export growth
Many of Oregons firms produce investment goods and other business inputs rather than serving
consumer demand. Examples include Oregons technology manufacturers, metal makers and commodity
firms, transportation equipment producers, utilities, and its warehousing and transport firms.
Although Oregons labor market recovery will be a slow one relative to past business cycles, once thestate gets back on its feet, it is expected to grow faster than the national average over the extendedforecast horizon. Oregons primary long-run growth advantage remains its healthy migration trends
Oregon is expected to continue to enjoy above-average population gains, including an ample flow of
skilled labor to supply its growth industries.
Oregon can be expected toattract many migrants fromother states as job
opportunities become moreplentiful. In particular,Oregon has traditionally
netted thousands ofhouseholds from California
whenever the local
unemployment rate is lowerthan Californias, as it is
now. Oregons relatively
affordable housing remains
a draw for migrants. During
the peak of the housingboom, only 22 percent of
houses sold in the Portlandmetropolitan area could be
afforded by a household
earning the median incomelevel. Now, nearly 70 percent of houses sold in the area are affordable for the typical household
(see Figure 6).
20
30
40
50
60
70
80
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
Portland metro area US
Sources: NAHB, OEA
Figure 6: Housing Is Affordable Once
Again
Housing opportunity index: percent of sales affordable bymedian income household
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-6 The Economic and Revenue Environment
Risks
Oregons economic recovery remains fragile, and there is a significant risk that the state will slip backinto recession before job growth becomes self-sustaining. Firms have remained lean following the
return of sales growth. As a result, most have seen strong growth in profits for several months. Despitewidespread profitability, many firms remain unwilling or unable to expand their operations through
investment or hiring. In part, small businesses are having difficulty getting access to credit. Smallbusinesses depend on small regional banks, many of which are still repairing their balance sheets and
therefore remain unwilling to lend.
Oregons ties to foreign markets also put it at risk. In the near term, Oregons relatively small amount ofexposure to Europe provides some degree of protection from the currency risks facing the euro zone.Longer-term, Oregon faces a good deal of risk associated with the overvalued Chinese currency and
future Asian demand conditions. The local impact of the Asian financial crisis during the 1990s
highlights this risk, with Oregon now even more closely tied to Asia than it was at that time.
The performance of the housing sector remains a downside risk to the outlook. Until the wave offoreclosures plays itself out, and housing inventories return to normal, the potential for further wealth
losses exists.
A persistent lack of job opportunities puts Oregons healthy migration trends at risk. In addition to jobs,migrants care about a wide range of factors including the quality of school systems, public safety
operations and the overall cost of living. As such, any tax increases or reductions in public services thatresult from state and local budget problems threaten to deter migrants. Also, a lack of household
mobility due to dysfunctional housing markets further threatens future population gains.
Following the economic recovery, the reemergence of inflation poses a risk to growth. Theunprecedented amount of monetary and fiscal stimulus seen in recent years will generate upwardpressure on prices going forward. If these policies are combined with growth in aggregate demand and
wages, inflation will once again become a significant threat.
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-7 The Economic and Revenue Environment
DEMOGRAPHIC CHANGE
Oregons population reached 3.844 million on July 1, 2010, as estimated by Population Research Centerof Portland State University. This is an increase of nearly 423,000 or 12.4 percent since the 2000
Census. Oregons population growth between 2000 and 2009 was 13th
highest in the nation. Howeverwith the exception of California, Oregons growth rate was still slower than its neighboring states. Over
a long run, Oregon has retained a distinction of major destination for migrants in the United StatesDuring the 2000 to 2009 period, nearly 68 percent of the population growth in Oregon was due to net
in-migration. Oregons population growth changes with its economic and employment outlook
Economic slowdown associated with recent recession has caused slow population growth. Populationgrowth in the near future is expected to continue the path of slow growth in sync with the slow pace of
economic recovery. Its population is expected to reach 4.142 million in 2017 with an annual rate of
growth hovering around 1.1 percent.
Geographic Variations
Figure 7 shows population growth by county between April 1, 2000, and July 1, 2010. Overall stategrowth was 12.4 percent during this period. However, there are large variations by region and county.High growth counties (exceeding 18 percent increase) in order of magnitude were Deschutes, Crook,
Jefferson, and Washington. All three central Oregon counties experienced very rapid population growth
The moderately growing counties (between 10 and 18 percent increase) were Jackson, Morrow,Yamhill, Clackamas, Marion, Columbia, Benton, Polk, Multnomah, and Josephine. The slow growing
counties (between zero and 10 percent increase) were Linn, Lane, Tillamook, Hood River, Clatsop,
Douglas, Klamath, Union, Umatilla, Wheeler, Wasco, Lake, Harney, Malheur, Lincoln, Coos, andCurry. Five counties losing population (negative growth) were Gilliam, Baker, Wallowa, Grant, and
Sherman. Population growth by county reflects the local economic environment. The differential
population growth rates will have real geo-political consequences when 2010 Census results are releasedfor legislative redistricting.
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-8 The Economic and Revenue Environment
Figure 7: County Population Growth, April 1, 2000 July 1, 2010
(Oregon: 12.4 percent)
CLATSOP
WASHINGTON
MULTNOMAH
COLUMBIA
DOUGLAS
LANE
LINCOLN
POLK
YAMHILL
TILLAMOOK
MARION
COOS
DESCHUTES
MALHEURHARNEYLAKEKLAMATHJACKSON
JOSEPHINE
CURRY
HOOD
RIVER
BENTON LINN
JEFFERSON
CROOK
WALLOWAUMATILLA
MORROWGILLIAM
WASCO
SHERMAN
WHEELER
GRANT
BAKER
UNION
Below 0% 10 to 18%0 to 10% Over 18%
Sources: U.S. Bureau of Census 2000, and Population Research Center, Portland State University 2010 (priliminary)
CLACKAMAS
Change in Age Structure
Figure 8 shows that population growth differs by age group with budgetary implications.
Children
Under five years: The size of this age group directly affects demand for childcare, Head Start, andTemporary Assistance for Needy Families (TANF). Between 2011 and 2013 the number of children
under age five will decline by 2.4 percent due to the recent decline in the annual number of births
associated with an increasing tendency towards smaller family-size and slowdown in the net in-migration of children and young adults at the early stage of family formation.
School Age: This age group drives demand for K-12 public school enrollment. Nearly 90 percent offive to 17 year-olds are enrolled in public schools. After growing rapidly during the early 1990s,population growth in this age group has slowed for nearly a decade. After about four years of negative
growth, the growth in the number of school-age children will turn positive starting in 2011. However,
the percentage increase will remain well below the states overall population rate of change. Between2011 and 2013, the number of school-age children is expected to grow by 1.4 percent. During
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-9 The Economic and Revenue Environment
economic hardship the public schools feel added pressure when parents cannot afford private school
expenses.
Figure 8: Population by Age Groups
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
19801982198419861988 19901992199419961998200020022004 200620082010201220142016
Population
Year
Children
Forecast
5-17
0-4
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
19801982198419861988199019921994 1996199820002002200420062008201020122014 2016
Population
Year
Adults and Elderly
Forecast
25-44
45-64
65+
18-24
Adults
Ages 18 to 24: This age group drives demand for post-secondary education and entry-level jobs. Nearlythree-fourths of all undergraduate students in Oregon public universities are 18 to 24 years old
However, college enrollment in Oregon has increased at a much faster rate than the 18-24 age
population due to the lack of competing employment opportunities. Also, males in this age group are the
criminally at risk population with the highest arrest rate of all adults. Consequently, populationincrease in this age group can raise demand for prison and jail beds and probation services. The growth
in this population group, however, has slowed and will continue to taper off to negative territory as the
baby-boom-echo cohort exits this age group. Between 2011 and 2013, this population will remainvirtually unchanged.
Ages 25 to 64: Working-age adults comprise 55 percent of the total population. The nature of this groupis heavily influenced by baby-boomers. The working-age population is the major contributor to thestates tax revenue and puts very little direct pressure on state services. However, younger adults need
entry-level jobs and older adults require continued training in a changing technological environment. All
of them, especially young adults, need affordable housing, childcare, and schools for their young
children. Overall, this population group will grow by 1 percent between 2011 and 2013, with olderworking age adults 45 to 64 remaining unchanged as the early baby-boomers mature out of this age
category.
Elderly
Since 1950, Oregons elderly (ages 65 and over) have more than tripled, while the total population hasnearly doubled. Growth in this group was slow until 2004, largely due to the depression era birth-cohort
reaching retirement age. However, the trend has already started to reverse and will continue its faster pace
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-10 The Economic and Revenue Environment
of growth. Beginning in 2011, this population group will consistently exceed four percent annual growth
rate. Between 2011 and 2013, the number of young elderly (aged 65 to 74) will increase by 15.1 percent as
the early baby boomers enter this age group, far exceeding the state's overall growth rate and at the fastest
pace of all age groups. During the same period, the number of oldest elderly (85 plus) will increase by3.9 percent. The number of persons aged 75-84 has just transitioned from a period of negative growth to
slow but steady growth. The young elderly require relatively little government assistance, while personsaged 85 and over tend to require more public assistance. Many members of the senior population require
health care, pension support, and special housing. They are highly dependent on state long-term care
services. Different age groups of elderly population will manifest the effects of people born during thedepression era and baby-boom period.
Race and Ethnic Composition
Oregon has become more racially and ethnically diverse. A more diverse population entails meeting theneeds of increasing racial and ethnic minorities. Oregon's population is overwhelmingly White. The Census
Bureau estimated 89.8 percent of Oregons population as of the White racial group in 2009. However, only79.6 percent were non-Hispanic White in 2009, down from 83.9 percent in 2000 Census. Each of the otherracial categories accounted for less than four percent of the population. Between April 1, 2000, and July 1,
2009, the Asian population grew by 37.2 percent and the African-American or Black racial group increased
by 34 percent, much faster than 9.9 percent growth of the White population.
The Hispanic or Latino ethnic group, which can be of any race, reached 11.2 percent of Oregons populationin 2009. This ethnic group has been increasing very rapidly. The Hispanic population increased from
112,707 in 1990 to 275,314 in 2000 Census. This ethnic group had grown to 428,469 in 2009. BetweenApril 1, 2000, and July 1, 2009, the Hispanic population increased by 55.6 percent whereas the non-
Hispanic population increased by 8.0 percent.
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The Economic and Revenue Environment
2011-13 Governors Balanced Budget A-11 The Economic and Revenue Environment
Figure 9: Population by Race and Ethnicity, 2009
2.0% 1.6% 2.6% 11.2%
88.8%89.8%
4.0%
White alone African-
American alone
Native Indian
alone
Asian & Pacific
Islander alone
Two or more
races
All non-
Hispanic
All Hispanic
Race Ethnicity
one race
Source: U.S. Bureau of Census.
Figure 10: Oregons Population Growth by Race & Ethnicity, 2000-2009
11.8%
9.9%
34.0%
25.3%
36.8%
29.8%
55.6%
All
White alone
African American alone
Native American alone
Asian & Pacific Islander alone
Two or more races
Hispanic (of any race)
Non-Hispanic
Source: U.S. Bureau of Census.
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2011-13 General Fund/Lottery
2011-13 Governors Balanced Budget A-12 2011-13 General Fund/Lottery
Resources
Total: $14,760 MillionPersonal
Income Tax
$11,995
82%
All Other
$541
4%
Estate Tax
$204
1%Cigarette/
Tobacco
Taxes$126
1%
Corporate
Income Tax
$945
6%Lottery
(including
Beginning
Balance &
Carry Forward)
$949
6%
Expenditures
Total: $14,550 Million
Natural
Resources$316
2% Economic &
Comm. Dev.
$190
1%
Human
Services
$3,795
26%
State School
Funding
$5,557
38%
Higher
Education
$9246%
Public
Safety/Judicial
$2,401
17%
Community
Colleges
$4463%OtherEducation
$513
4%
All Other
$408
3%
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2011-13 All Funds
2011-13 Governors Balanced Budget A-13 All Funds
Resources
Total: $112,668 Million
Federal Funds
$12,555
11%
Other Funds &
Federal Funds
Beginning
Balance
$53,468
48%
Other Funds
$30,936
27%
General Fund$14,760
13%
Lottery (including
Beginning
Balance & CarryForward)
$949
1%
Expenditures
Total: $55,284 Million
Administration
$9,035
16%
All Other
$711
1%
Natural
Resources
$1,759
3%
Economic &
Comm. Dev.
$4,454
8%
State School
Funding
$5,557
10%
Higher Education
$5,387
10%
Human Services
$18,17034%
Public
Safety/Judicial
$3,554
6%
Other Education
$2,665
5% Transportation
$3,992
7%
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State of Oregon Organization Chart
2011-13 Governors Balanced Budget A-14 State of Oregon Organization C
S
TATE
OFOREG
ON
--ORGANIZATION
CHART
ThePeople
ofOregon
JudicialBra
nch
ExecutiveBranch
Legislativ
eBranch
Senate
Houseof
Representatives
Secretary
ofState
Attorney
Gen
eral
Governor
Superintendent
ofPublic
Instruction
Labor
Commissioner
Treasurer
ofState
ChiefJusticeof
Suprem
eCourt
Jud
icial
Department
Treasury
Department
Bureauof
Labor&
Industries
Department
ofEducation
Depa
rtment
ofJustice
Econo
mic&
Comm
unity
Develo
pment
Programs
Education
Programs
Human
Resources
Programs
Natural
Resources
Programs
Public
Safety
Programs
Transportation
Programs
Administration
Programs
Consumer&
Business
Services
Programs
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Education
2011-13 Governor's Balanced Budget B-1 Education
PROGRAM AREA AGENCIES
DEPARTMENT OF COMMUNITY COLLEGES AND WORKFORCE DEVELOPMENT ......................................... B-6EARLY LEARNING COUNCIL..................................................................................................................... B-9DEPARTMENT OF EDUCATION ................................................................................................................ B-12OREGON STUDENT ASSISTANCE COMMISSION ....................................................................................... B-16OREGON UNIVERSITY SYSTEM............................................................................................................... B-18TEACHER STANDARDS AND PRACTICES COMMISSION ............................................................................ B-21
2007-09
Actuals
2009-11
Legislatively Approved
2011-13
Governor's Balanced
General Fund $6,751,674,571 $6,985,122,644 $6,974,389,113
Lottery Funds $1,145,146,747 $590,293,238 $466,031,778
Other Funds $2,384,804,026 $2,514,869,284 $2,328,198,233
Federal Funds $1,053,645,676 $1,463,327,743 $1,071,033,212
Other Funds (Nonlimited) $2,329,391,474 $2,366,021,317 $2,356,976,754
Federal Funds (Nonlimited) $288,535,152 $297,661,250 $412,000,212
Total Funds $13,953,197,646 $14,217,295,476 $13,608,629,302
Positions 18,712 18,756 19,249
Full-time Equivalent 13,196.47 13,394.79 13,604.78
Overview
Agencies and expenditures in this program area operate or support all public educational activities from
pre-kindergarten to post-secondary and life-long learning. Specific agencies are the Department of
Community Colleges and Workforce Development, the Department of Education, the Oregon University
System, the Oregon Student Assistance Commission and the Teacher Standards and Practices Commission.
State support of the Oregon Health Sciences University public corporation is also included in this program
area. The newly created Early Learning Council is included in the Education program area.
The Department of Community Colleges and Workforce Development coordinates the efforts of
17 community colleges statewide and maintains educational opportunities and workforce development
capacity in the state. This agencys budget includes funding to support general community college
operations. The agency administers federal Workforce Investment Act programs, supporting local workforce
investment boards and service providers.
The Department of Education supports pre-kindergarten through 12th grade (Pre-K-12) education. This
agency includes support for school districts in the areas of school improvement, assessment, special
education, professional/technical education, legal requirements, nutrition and transportation. This budget
funds the following programs:
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Education
2011-13 Governor's Balanced Budget B-2 Education
Oregon State School for the Blind and School for the Deaf. Education services at youth corrections facilities and youth detention centers. Special education. Professional/technical education. Child nutrition. Early intervention programs. Educational programs for children of low-income families. State school funding for the states public elementary and secondary school districts and education
service districts.
The Oregon University System is the state agency name for the educational institutions, governing board,
central administration, support services and public services that make up Oregons public university
system. The institutions include the University of Oregon, Oregon State University, Portland State
University, the three regional universities (Eastern, Western and Southern Oregon universities) and theOregon Institute of Technology. Oregon State University also operates the Cascades campus in Bend and
the statewide public service programs, the Agricultural Experiment Station, the Extension Service and the
Forest Research Laboratory.
The Oregon Student Assistance Commission helps Oregon students obtain post-secondary education by
administering, evaluating, coordinating and promoting financial aid programs. The commission administers
over 400 state-funded and privately-funded grant and scholarship programs, including the Oregon
Opportunity Grant.
The Teacher Standards and Practices Commission works to ensure that every student in Oregon receives
instruction from skilled and ethical educators. The agency establishes rules for licensing and issues licensesto educators. The commission must approve college and university teacher education programs.
The state provides Oregon Health and Science University a subsidy to assist with funding a number ofprograms, including the Schools of Medicine, Nursing and Dentistry. State funds also provide support toArea Health Education Centers, the Child Development Research Center and the Allied Health TrainingPrograms. It also supports operation of the Oregon Poison Center.
The newly created Early Learning Councilprovides a single point of accountability for programs relatedto early childhood and school readiness. The programs were previously operated by the Commission onChildren and Families, the Employment Departments Child Care Division, the Department of HumanServices, the Oregon Health Authority, the Department of Education and the Oregon State Library. Theagency serves as a focal point for re-engineering the states early childhood system to focus efforts onthree goals: readiness to learn at kindergarten, readiness to read entering first grade, and reading whenleaving first grade.
Transforming Public Education in Oregon In order to successfully transform Oregons economy, it isnecessary for more Oregonians to attain high levels of education, as envisioned in the Oregon BusinessPlans 40-40-20 goal: that 40 percent of Oregon adults have a four year college degree or higher; 40
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Education
2011-13 Governor's Balanced Budget B-3 Education
percent have an Associates degree, professional certificate or equivalent; and the remaining 20 percenthave at least a high school diploma or equivalent.Achieving this goal will require a more integrated operation of the education enterprise, from earlychildhood to post-secondary education. It will also require a unified, transparent, student-centered budgetframework that improves understanding of existing and planned expenditures, allows more informed
policy and budget choices, and holds institutions accountable for results.
The Governors balanced budget begins the process of transforming the way education is funded in thestate. It consolidates programs from across state government that serves children from the time they areborn to the time they reach kindergarten, to improve coverage and maximize investments in health care,family support, child care, and pre-kindergarten programs. For Oregons public education system itestablishes a stable funding floor with more flexibility for schools to direct money into the classroom. Itredirects the efforts of the Oregon University System to focus on undergraduate education and keyeconomic development programs. It preserves funding for the Oregon Opportunity Grant program tomaintain the states commitment to access to post-secondary education.
In other actions, the Governor will establish the Oregon Education Investment Board to replace thecurrent segmented budget development and governance process with one that recognizes theinterdependent nature of the entire enterprise of education. Legislation will be introduced to move theposition of the State Superintendent of Public Education to an appointed position within the ExecutiveBranch as the states Chief Education Investment Officer. And the state will begin the process of movingto a long-term budget framework to better account for link investments with results.
Balanced Budget
The budget for the Education Program Area is $13.6 billion total funds, a 4.2 percent reduction from the2009-11 Legislatively Approved Budget. General Fund and Lottery Funds total $7.4 billion, a 2.6 percent
decrease from 2009-11 levels. Compared with the 2011-13 Current Service Level, total funds are reducedby 4.0 percent while General Fund and Lottery Funds are reduced by 15.2 percent.
The budget includes $6.848 billion for the Department of Education. This is $441 million General Fundand Lottery Funds less than the current biennium. About half of this reduction is because early childhoodprograms have been moved out of the Department of Education and into the Early Learning Council.
Key elements of the 2011-13 Governors Balanced Budget are:
The Governors Balanced Budget establishes a stable funding floor for Oregons public schoolsystem. It provides $5.56 billion for the biennium. However, 52 percent ($2.9 billion) will be
distributed during the first school year of the biennium, equivalent to a $5.8 billion budget forschool funding. The effect is to provide an increase in state funding for the 2011-12 school year.Front-loading the funding also provides a year to find cost savings through consolidation and otherefficiencies to maintain this level of classroom support during the 2012-13 school year.
The General Fund budget for programs within the Early Learning Council was increased by 3.3percent from the 2009-11 LAB to preserve the programs for early childhood system redesign. Thebudget also includes Lottery Fund bonding authority to invest in a coordinated early care andeducation data system.
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Education
2011-13 Governor's Balanced Budget B-4 Education
The General Fund and Lottery Funds budget for the Oregon University System is reduced by 4.9percent from the 2009-11 LAB. Including federal revenues received under the AmericanRecovery and Reinvestment Act in the 2009-11 LAB, the reduction is 11.9 percent.
With reduced funding, OUS is expected to prioritize undergraduate education and graduateprograms directly related to state workforce goals such as health care engineering, and teachereducation. Research funding in areas related to state economic development goals, is expected tobe maintained.
Reductions in graduate and professional schools, public service programs, and the Oregon StateUniversity statewide public service programs will require redesign and business planning aroundefficiency and effectiveness. Graduate and professional programs will need to be given moreflexibility in raising tuition and seeking grant funds.
A total of $406.9 million is included for 27 OUS Capital Construction projects and reserves at allseven universities. This includes $41.4 million for three deferred maintenance projects; thedepartments deferred maintenance backlog is estimated in excess of $640 million. The budgetalso includes $51.4 million for capital repair, code compliance, and safety projects to keep the$640 million deferred maintenance backlog from growing.
Other higher education Capital Construction projects include construction of a new businesseducation building at Oregon State University and funds to complete the purchase of a building inWilsonville for consolidation of the Oregon Institute of Technologys Portland area programs.The budget also includes a variety of housing, dining, parking, athletics, and student activitiesprojects.
Debt service on General Fund and Lottery Funds backed debt for OUS capital projects increasedby 38.2 percent, to $113.6 million.
Funding for the Community College Support Fund is reduced by nine percent from the 2009-11biennium to $410 million. State support per full-time student is estimated to drop from $1,744 inthe current biennium to $1,559 per full-time student in 2011-13, a 10.6 percent reduction.
The CCWD budget includes investment in the Getting Oregon Back to Work program and inincentives for colleges and universities to improve progression towards, and completion of,certificates and degrees.
No state funds are recommended for community college capital construction projects in 2011-13,due to constrains on debt capacity. Over the past three biennia, the state has authorized $207.3million in general obligation and Lottery-backed bonds for college projects, with each collegebeing authorized for at least two projects. Debt service on these bonds in the 2011-13 biennia is$24 million, a 39.2 percent increase from 2009-11.
Total funding for the Opportunity Grant program is increased from $101.8 million to$115 million. This amount is expected to allow the Student Assistance Commission to make asmany as 17,000 more awards in 2011-13 than in 2009-11.
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Education
2011-13 Governor's Balanced Budget B-5 Education
Funding for the Access to Student Assistance Programs in Reach of Everyone (ASPIRE)Volunteer Advisory Program is shifted primarily to Other Funds. A program coordinator issupported with General Fund for fund raising and program management.
State support for the Oregon Health and Science University is reduced from the 2009-11 bienniumby 20 percent. Within the lower funding level, education and rural health programs are prioritized.The funding directs state resources to education programs, that traditionally operate in a deficitsituation, from hospital operations, which traditionally generate a surplus. Funding to support theOregon Poison Center is reduced slightly from the 2009-11 biennium.
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Education
2011-13 Governor's Balanced Budget B-6 Education
DEPARTMENT OF COMMUNITY COLLEGES AND
WORKFORCE DEVELOPMENT
2007-09
Actuals
2009-11
Legislatively Approved
2011-13
Governor's BalancedGeneral Fund $504,017,927 $464,644,408 $438,058,756
Lottery Funds $0 $8,929,603 $7,469,632
Other Funds $156,201,246 $137,864,296 $6,874,666
Federal Funds $120,549,268 $163,149,805 $116,785,442
Other Funds (Nonlimited) $0 $0 $0
Federal Funds (Nonlimited) $5,106,785 $18,968,832 $18,968,832
Total Funds $785,875,226 $793,556,944 $588,157,328
Positions 57 61 68
Full-time Equivalent 56.06 60.06 67.45
Overview
The Department of Community Colleges and Workforce Development (CCWD) provides leadership,
accountability, and technical assistance to Oregons 17 community colleges and seven local workforce areas.
The agencys goal is to help Oregonians achieve the skills and knowledge needed to combine careers and
lifelong learning.
The department administers the Community College Support Fund, the states contribution to community
college operating costs. Funds are distributed primarily based on the number of full-time equivalent
students at each college. The colleges combine state funding with property tax and tuition revenues to
provide professional and technical education programs; lower division transfer classes equivalent to those
offered in the first two years at a four-year university; training for displaced workers and skill
enhancement for workers who already have jobs; training tailored for particular businesses; and adult
literacy, including General Educational Development (GED) course work. The department also manages
the states participation in community college construction projects.
The agency supports local workforce investment boards and service providers. It administers the Federal
Workforce Investment Act programs. These programs assist youth, adult and dislocated workers byproviding education and workforce development services. The funds are targeted to people who faceserious barriers to employment.
Department programs also include GED tests and program coordination; Adult Basic Education tests; andthe Oregon Youth Conservation Corps.
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Education
Balanced Budget
The Governors Balanced Budget of $588.2 million total funds is a 25.9 percent reduction from the 2009-11 Legislatively Approved Budget (LAB). The total funds reduction is primarily due to the phase-out offederal grants received under the American Recovery and Reinvestment Act and the elimination of Other
Funds for community college capital construction projects. Due to the state revenue shortfall, no newcapital projects are recommended for the 2011-13 biennium.
General Fund and Lottery Funds are reduced by 5.9 percent from the 2009-11 LAB. Debt service onbonds sold to finance community college capital construction projects is increased by 39.2 percent.
The budget includes $410 million for the Community College Support Fund, reduced by nine percentfrom the 2009-11 LAB. Based on the departments enrollment estimate of 263,000 full-time equivalentstudents, General Fund support would decline from $1,744 per student in 2009-11 (after the June andSeptember 2010 allotment cuts) to $1,559 per student in 2011-13, a 10.6 percent reduction.
Community College Support Fundper Student FTE
$2,074
$2,310 $2,330 $2,371$2,189
$1,905
$2,293$2,435
$2,604
$1,882$1,744
$1,559
157,347
169,307
183,894179,285 176,072
239,419 238,527
262,976
191,984196,969196,969196,969
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
1995-97 Actuals1997-99 Actuals1999-01 Actuals 2001-03 Close
of Session
2001-03 Post
Special
Sessions
2001-03 Post
SS w/ Shift *
2003-05 Post
M30
2005-07 LAB 2007-09 LAB 2009-11 LAB 2009-11 LAB
with allotment
reductions
2011-13
Governor's
recommended
-30,000
20,000
70,000
120,000
170,000
220,000
270,000
General Fund per Student FTE Student FTE
* 2001-03 LAB after 5th Special Session w/o $56 million that was shifted to the first quarter of 2003-05
The Governors Balanced Budget includes a $3.4 million investment in the Getting Oregon Back to Workprogram to help recovering Oregon companies resume hiring while helping Oregonians get back to workin sustainable jobs. The investment will allow local Workforce Investment Boards to put 626 Oregoniansback to work in the first year of the biennium. An additional $2 million is invested in incentives forprogression towards, and completion of, degrees and certificates. Funding for healthcare workforceprograms and two skills centers is eliminated.
2011-13 Governor's Balanced Budget B-7 Education
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Education
2011-13 Governor's Balanced Budget B-8 Education
Increases in Other Funds and Federal Funds will allow the department to participate with the Departmentof Education, the Oregon University System, and the Employment Department in development of alongitudinal data system and continue workforce and youth employment programs.
In the 2005-07 biennium, the state resumed issuing bonds to support community college capital
construction projects. This was the first state bond issuance for college projects since the 1979-81biennium. In the past three biennia, $207.3 million in general obligation bonds and Lottery-backed bondshave been authorized to support community college capital construction. Each college has had at leasttwo projects authorized. Debt service in the 2011-13 biennium will be $24 million General Fund andLottery Funds. Due to constraints on the states bonding capacity in the current economic climate, nonew college projects are recommended for the 2011-13 biennium.
Revenue
General Fund resources finance the Community College Support Fund, debt service on Article XI-G
bonds, and a portion of office operations costs. Lottery Funds pay the debt service on Lottery-backed
bonds.
Other Funds revenue sources include fees for the GED and adult education tests; charges to communitycolleges for Adult Basic Education materials and training, funds from the Department of Education forCarl Perkins program support and amusement device taxes for the Oregon Youth Conservation Corpsprogram. The department continues to receive a small amount of timber tax revenue that is transferred to thecolleges as part of the Support Fund.
Federal Funds revenue sources include Workforce Investment Act Title II for Adult Basic Education and
Workforce Investment Act Title IB for job training. The department also receives National Emergency
Grants following economic or other dislocations; these funds are included in the budget as NonlimitedFederal Funds.
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Education
2011-13 Governor's Balanced Budget B-9 Education
EARLY LEARNING COUNCIL
2007-09
Actuals
2009-11
Legislatively Approved
2011-13
Governor's Balanced
General Fund $0 $0 $361,581,626
Lottery Funds $0 $0 $0
Other Funds $0 $0 $34,231,904
Federal Funds $0 $0 $231,294,898
Other Funds (Nonlimited) $0 $0 $40,000,000
Federal Funds (Nonlimited) $0 $0 $102,729,051
Total Funds $0 $0 $769,837,479
Positions 0 0 [185]*
Full-time Equivalent 0.00 0.00 [174.14]**The positions and FTElisted above are not new positions but are existing position transferred in to the Early LearningCouncil from other state agencies. The goal of the Early Learning Council redesign is to streamline services and reduceadministrative overhead.
Overview
If our central challenge is to rebuild the House of Oregon, then successful investment in thedevelopmental needs of children is the foundation on which the house will be built.
The Governor has proposed the creation of a single transparent 0-20 education investment budget theOregon Education Investment Fund which will be administered by a new Oregon Education InvestmentBoard. Under this board will be created a Council of Early Learning which will focus on ensuring thatchildren enter school ready to learn, enter the first grade ready to read, and leave the first grade reading.Research has demonstrated that children who achieve these three goals are more likely to progresssuccessfully through the remaining school years and become productive, employed adults. It is alsoduring the early years that the family and community have a significant impact on childrens ability toachieve these goals. The state can help families who need and want support in addressing the very earlyprecursors to learning which left unattended, later place a much larger burden on the K-12 educationsystem and other social services programs.
Although the state has a range of programs and significant public investment for these children, the goalsand efforts have not been sufficiently unified across agencies, nor have the results of these efforts beenconsistently documented at the child/family level. This budget moves to a model that focuses onoutcomes for children and their families, not resources for programs. Unifying efforts, streamliningadministrative costs, and committing resources to a sustained strategy of early childhood investment, withmeasurable results, will be the foundational element in achieving long term educational and economicobjectives for Oregon. The Council of Early Learning is created in this budget to bring together thoseprograms focused on primary and secondary prevention. The following programs are included:
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Education
2011-13 Governor's Balanced Budget B-10 Education
Early Intervention and Early Childhood Special Education; Headstart and Early Headstart; OregonPre-kindergarten; Even Start; and Special Education for infants with disabilities, and pre-schoolgrants from the Department of Education;
Healthy Start; Relief Nurseries; Community Schools; Children, Youth and Families; Great Start;Family Preservation and Support; and statewide system development and planning from the StateCommission on Children and Families;
The Childcare Division and Childcare Commission from the Employment Department; Ready to Read from the Oregon State Library; Maternal and Child Health Programs; and Women Infants and Children from the Oregon Health
Authority; and
Employment Related Daycare and the Childrens Wrap-around Initiative from the Department ofHuman Services.
In the first year of the biennium, the Governors Early Childhood System Director will oversee a designteam to re-engineer and transform the early childhood system to produce measurable outcomes and cost-benefit analyses on a regional basis through performance-based contracting with local providers. Thedesign team will also recommend a process to transition to the new delivery model in the second year ofthe biennium. Although the budget and positions for the existing programs are moved to the Council ofEarly Learning, the programs themselves will continue to operate in their current form for this first year ofthe biennium. Beginning the second year of the biennium, the programs will operate under the newsystem design with unified efforts and streamlined administrative services.
In addition to the programs directly focused on early learning, the following programs from the StateCommission on Children and Families have been transferred to the Council of Early Learning: CourtAppointed Special Advocates; Youth Investment; the Runaway and Homeless Youth Initiative; andJuvenile Crime Prevention.
Balanced Budget
The Governors Balanced Budget totals $770 million total funds, with $362 million General Fund. Forprograms relating to early childhood, this is a General Fund increase of 7.4 percent from the 2009-11Legislatively Approved Budget. Total fund expenditures remained flat from the 2009-11 LegislativelyApproved Budget.
Investments were made in the early childhood programs to the extent possible to foster system re-engineering and produce the desired outcomes. Funds will be spent at the direction of Governors EarlyChildhood System Director, who will provide the single point of accountability.
The budget also includes Lottery Fund bonding authority to invest in a coordinated early care andeducation data system. This system will be a statewide, child-based data system to track expenditures(including the return on investment) and outcomes. The system should ultimately be integrated across thehealth and education system.
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2011-13 Governor's Balanced Budget B-11 Education
The programs transferred from the State Commission on Children and Families, mentioned earlier, thatare not specifically focused on early childhood issues are funded at the level of the 2009-11 LegislativelyApproved Budget less allotment reductions.
Revenue
Approximately 47 percent of the Department of Early Learning budget is General Fund, 10 percent OtherFunds, and 43 percent Federal Funds. The primary sources of Federal Funds are the Child Care andDevelopment Block Grant, the Maternal and Child Health Grant (Title V) and Women Infants andChildren. Other Funds mostly consist of Federal revenues transferred to the Department from otheragencies. These include Title XX (Social Services Block Grant), Title IV-B(2) (Safe and Stable Families)received from the Department of Human Services and Title XIX Medicaid funds received from theOregon Health Authority.
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2011-13 Governor's Balanced Budget B-12 Education
DEPARTMENT OF EDUCATION
2007-09
Actuals
2009-11
Legislatively Approved
2011-13
Governor's Balanced
General Fund $5,272,290,511 $5,594,170,040 $5,281,669,587
Lottery Funds $1,117,673,277 $549,318,319 $427,416,330
Other Funds $60,883,458 $60,411,670 $47,585,138
Federal Funds $875,676,402 $1,229,435,317 $722,225,628
Other Funds (Nonlimited) $140,351,340 $100,687,342 $84,024,055
Federal Funds (Nonlimited) $283,428,367 $278,692,417 $285,380,254
Total Funds $7,750,303,355 $7,812,715,105 $6,848,300,992
Positions 481 393 385
Full-time Equivalent 443.51 375.22 365.40
Overview
The Oregon Department of Education is the lead agency for Oregons Pre-Kindergarten through grade 12
public education system. Its mission is to improve the achievement of all students. The Superintendent of
Public Instruction is elected to lead the agency. The agency provides support to the State Board of Education
and the Superintendent in carrying out their responsibilities, including:
Adopting rules for general governance of schools and distributing funding for all public schools. Implementing statewide standards for schools. Establishing rules for schools and ensuring that they are followed. Administering Oregons statewide assessment testing system. Acting as a liaison and monitoring implementation of federal programs. Working in partnership with all education stakeholders. This includes local school districts, education
service districts, community colleges, parents, teachers, administrators, businesses and community
members.
The agency also contracts for services for certain education programs such as services to infants and youngchildren with disabilities, preschool programs, compensatory education programs and professional/technicaleducation programs. Through regional programs, the department provides special education services tochildren with disabilities such as autism, hearing impairments and vision impairments.
The agency provides direct educational services at the School for the Deaf. In addition, the departmentcontracts for most educational services at Oregon Youth Authority work-study camps and correctionalfacilities.
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2011-13 Governor's Balanced Budget B-13 Education
Balanced Budget
Investment in education is a top priority in the Governors Balan