Budget Rebalance Plan summary memo

8/3/2019 Budget Rebalance Plan summary memo

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LEGISLATIVE FISCAL OFFICE

900COURT ST.NE,RM.H-178SALEM,OR 97301(503)986-1828

FAX(503)373-7807

JOINT COMMITTEE ON

WAYS AND MEANS

SEN.RICHARDDEVLIN,SENATECO-CHAIRREP.PETER BUCKLEY,HOUSECO-CHAIRREP.DENNISRICHARDSON,HOUSE CO-CHAIR

SEN.BETSY JOHNSON,SENATE VICE-CHAIRREP.BILLGARRARD,HOUSECO-VICE-CHAIRREP.NANCYNATHANSON,HOUSECO-VICE-CHAIR

To: Sen. Peter Courtney, Senate PresidentRep. Bruce Hanna, House Co-SpeakerRep. Arnie Roblan, House Co-Speaker

From: Senator Richard Devlin, Co-ChairRepresentative Peter Buckley, Co-ChairRepresentative Dennis Richardson, Co-Chair

Date: February 23, 2012

Subject: Summary of Co-Chair 2011-13 Budget Rebalance Plan

With the state experiencing an uncertain economic situation, the Co-Chairs of the Joint Committeeon Ways and Means were tasked by the presiding officers with developing a 2011-13 bienniumbudget rebalance plan for action during the 2012 session. Through a combination of proposedactions including selected program and service reductions, the reappropriation of certain accountbalances, accessing additional resources provided to the state through three unanticipated legalsettlements, and engaging the executive branch in a governmental reform action to reduceadministrative middle management positions and effectuate other business operational changes, theCo-Chairs have developed the following budget rebalance plan. Highlights of the plan areidentified below followed by subcommittee program area details. Attached to this memo areadditional materials regarding the elements of the rebalance plan.

Statewide Actions:

Retains a General Fund projected ending balance of approximately $118 million.

By not accessing reserve funds, maintains a projected Rainy Day Fund balance of at least$46 million, with the possible addition of another $10 million through state agency 2009-11 reversions.

Includes an Emergency Fund with about $28 million for general purposes, $60 million for

special purposes including any necessary allotment reduction mitigation, foreclosureissues, and human services actual caseload increases, and $10 million for any necessaryallotment reduction mitigation for select education programs.

Assumes $28 million in budget reductions from an effort to restructure state governmentbusiness operations designed to make permanent changes to the management of agencyprograms and services through the reduction of administrative middle managementpositions and other operational reforms.


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Human Services Subcommittee Program Area:

Department of Human Services

In the Temporary Assistance to Needy Families (TANF) program, basic cash assistancepayment levels and income eligibility criteria are unchanged. Current TANF Parents asScholars clients can complete their education without losing cash assistance. The TANFFamily Support and Connections program is maintained at full funding. Families who meetthe federal 60-month time limit out of state will not be eligible for TANF in Oregon. The

current job quit ineligibility period is extended from 60 to 120 days. Post-TANFpayments to working families are ended May 1, 2012, two months earlier than originallybudgeted.

$9 million in unallocated JOBS funding is maintained for job placement, contracted slotsand client support services such as child care and transportation.

Employment Related Day Care caseloads are funded at an expected 8,500 average cases,with a continued mix of General Fund and federal Child Care and Development Fundmoneys. Client co-payments are increased by 10%, an average of $5 to $10 a month forfamilies receiving subsidies.

Child welfare services are maintained, including funding for SB 964 (2011) community-based, family preservation and reunification programs. However, a new initiative to contract

for domestic violence advocates in program offices is scaled back, and $1 million for newinfrastructure grants to domestic violence shelters is eliminated. Foster care, adoptionsassistance and other provider reimbursement payments are unchanged.

Funding for refugee services is reduced by $450,000 (3.3%) overall.

Vocational Rehabilitation Services are continued without reduction.

No reductions are made in Oregon Project Independence services. Medicaid adult dayservices and home-delivered meals programs are continued.

$40 million General Fund is added to the Medicaid long-term care budget for seniors andpeople with disabilities, reducing the potential 2nd year provider rate reduction from $53.4million to $13.4 million. The Co-Chairs intent is to pursue additional federal Medicaidfunding or other federal revenue to mitigate or eliminate the full 2nd year reduction.

Alternatives to Employment Services, Sheltered Employment, Supported Employment, theFamily Support Program and Family-to-Family network for people with developmentaldisabilities and their families continue without reductions. The plan also avoids furtherreductions to DD providers, and mitigates $6.9 million of reductions previously anticipatedin the legislatively adopted budget.

Oregon Health Authority

Funding for the Oregon Health Plan (OHP) is maintained at current levels. Services aremaintained for dental benefits, mental health benefits, addiction services, and prescriptiondrug benefits. The prioritized list of services is maintained at its current level. Payments forGraduate Medical Education are also maintained. The plan includes an additional $1million General Fund to mitigate the earlier reductions to the reimbursement rates fordurable medical equipment.

A total of $16.8 million of insurers tax revenue will be redirected to help ensure access tohealth care for children. Of this total, $11 million will be used to preserve services forchildren by preventing program reductions in the OHP Plus program. The remainder will beused in the Family Health Insurance Assistance Program (FHIAP) to prevent furtherprogram reductions.


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Four wards in the new Oregon State Hospital will not be opened until the beginning of the2013-15 biennium, resulting in one-time savings of $19.6 million General Fund.

Blue Mountain Recovery Center will remain open.

Alcohol and Drug Treatment programs are continued without reductions.

The budget plan uses $5.7 million Other Funds from the Community Mental Health(Dammasch) Housing Trust Fund to support program services. This amount is equal to one-half of the current principal in the Fund. The Other Funds will be used to continue toprovide community services to children and adults with mental illness. With this funding,

all community mental health services are maintained at current levels.

Education Subcommittee Program Area:

No reduction to the State School Fund from the legislatively adopted budget despite thedecline in Lottery Funds revenues.

Maintaining all 59 Early Head Start slots through the end of the biennium with the additionof $587,015 General Fund.

Total funds support for Oregon Opportunity Grants within the Oregon Student AssistanceCommission is $99.5 million, unchanged from the adopted budget and 4.8% above the2009-11 approved budget. First year expenditures are estimated to be $44.6 million leavingnearly $55 million available for the second year.

Several newly established programs or expenditures totaling $15,755,000 General Fund thatwere not subject to the 3.5% supplemental ending balance reduction were reduced by 3.5%to generate savings of $551,425, by the following individual amounts:

SB 252 District Collaboration (ODE) - $175,000

HB 3362 Career & Technical Education (ODE) - $70,000

SB 254 Accelerated College Credit (ODE) - $8,750

For Inspiration and Recognition of Science and Technology (ODE) - $5,250

HB 2800 Farm-to-School (ODE) - $7,000

SB 480 After School Meal and Snack (ODE) - $6,300

Skill Centers (CCWD) - $19,250

Trucking Consortia (CCWD) - $17,500 High Demand Jobs (CCWD) - $119,000

HB 2397 Health Care Loans (OHSU) - $18,375

Oregon Education Investment Board (Governors Office) - $105,000

Given the conceptual alignment between the Oregon Education Investment Board and thedistrict collaboration efforts outlined in HB 3474 (2011), the $100,000 General Fund seedfunding could be eliminated. The Teachers Standards and Practices Commission has notexpended any of these funds.

Saves almost $900,000 in General Fund debt service payments made by the state on behalfof the Oregon University System.

Reduces Sports Lottery by $232,960 so the funding could instead be used to meet lottery

bonds debt service obligations.

Public Safety Subcommittee Program Area:

No reductions to the basic Community Corrections grants to counties. No counties will beable to opt-out of the program.

No inmates will be released and no sentencing changes occur as a result of budgetreductions.

The Co-Chair budget does not require any prison closures.


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Funding is maintained for alcohol and drug treatment, educational, and cognitive programsin the Department of Corrections.

Restores approximately $6 million to the Oregon State Police (OSP) budget avoiding majorreductions to the Criminal and Patrol Divisions. The Co-Chair plan does reduce funding tothe Criminal Division by $1.8 million General Fund eliminating 12 detective positions. Theagency has the flexibility to terminate these positions from its major programs (e.g., DrugTeams, Major Crimes, or Institutional Investigations) based on minimizing the effect onpublic safety statewide.

Funding for the State Polices sex offender registration program and web site is maintained. Funding for the statewide forensics, State Medical Examiner, and criminal background

programs are maintained.

Funding for the Crime Victims programs in the Department of Justice is maintained.

Funding for OYAs direct county payments for individual services, juvenile crimeprevention, diversion, and gang funding is maintained.

Salary and compensation for the 36 District Attorneys is maintained.

Funding in the Public Defense Services Commissions budget and a $3.5 million specialpurpose appropriation to the Emergency Board should be sufficient for indigent defensebased on current estimates.

Funding and bonding authority is provided to continue the Oregon eCourt program.

A special purpose appropriation to the Emergency Board is established to address futureoperating needs of the courts.

Transportation and Economic Development Subcommittee Program Area:

Fully funds all General Fund and Lottery Funds debt service expenses.

Maintains funding for county economic development programs.

Maintains funding for Senior and Disabled Transportation.

Increases funds to the Government Contract Assistance Program to provide eligibility forFederal matching funds.

Restores funding for the General Fund Food Program.

Provides $5 million in additional Oregon Energy Assistance Payments. Accelerates assistance to homeowners facing foreclosure by providing additional staffing for

the Homeownership Stabilization Initiative.

Supports round three of the Neighborhood Stabilization Initiative.

Allocates $6.2 million in Child Care and Development carry forward funding.

Supports Federal Trade Act and unemployment insurance benefit extensions.

Maintains the Oregon Department of Veterans Affairs Emergency Aid program for veteransin distress.

Natural Resources Subcommittee Program Area:

Restores all General Fund and Lottery Fund debt service

Restores the Department of Forestrys Fire Protection program. Reappropriates $3 million from the Vehicle Inspection Program to the General Fund

Reduces General Fund by $1.3 million as Natural Resource agencies share of the statewideeffort to restructure state government business operations and management of agencyprograms and services.

Uses carry forward Lottery Funds to replace General Fund, vacancy savings, and otheractions to make over $400,000 General Fund available to the statewide rebalance plan.


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General Government Subcommittee Program Area:

Adds $1 million General Fund for the Employment Relations Board to support localgovernment services in the second year of the biennium.

Transfers a total of $10 million in resources from the Risk Management and Tax Amnestyfunds to the General Fund to help support critical services and maintain a prudent endingbalance.

Captures nearly $1 million in General Fund savings due to the states e-government programtransitioning from assessment funding to a self-funded model.

Adds $250,000 in grant fund expenditures to the State Treasurer's budget for the West CoastInfrastructure Exchange.


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Restorations of Previously Identified Cuts

ODE - Early Head Start Funding 0.6

DOC - No Closure of Santiam 1.6

DOC - Cognitive Alcohol and Drug Treatment 1.0

DOC - Unspecified Reduction 5.0

DHS - DD Brokerage Services 0.3

DHS - DD Day Service 1.4

DHS - DD CDDPs 1.3DHS - DD Residential Providers 5.5

OHA - DME 1.0

OHA - Hospital Visits 0.2

OHA - Children's Mental Health Services 2.3

Governor's Office - Restore 3.5% 0.4

DLCD - Rule Making related to Regional Land Use Planning 0.2

HB 4005 - Tax Credit related to wolf predation ($37,500) 0.0

DOJ - Civil Rights 0.2

DOJ - Child Support IT Project 0.3

Emergency Fund - General Purpose 2.9

24.1

Revenue and Resource Solutions to Restorations

E-Fund - General Purpose Reduction for DOC 5.0

DHS - Close 3 additional SOCP homes 0.4

OED - Supplemental Employment Department Admin Fund 9.0

DAS - Risk Management Fund 7.0

DOJ - Consumer Protection and Education Fund 4.0

25.4

Other Decisions as Part of Agreement

Various - Revised Plan requiring $28 million for Administrative Mid-Management Positions and Business Operational Reform

DHS - Long Term Care funded with k-waiver; revenue increase; or federal revenue

DHS - TANF Eligibility after 4 Months (backfilled with Federal TANF Contingency Funds)

OJD - Pass HB 4026 - Court of Appeals judges

ODFW/OSP/DOR - Pass HB 4005 with wolf predation funding of $37,500 of tax credits

DOJ - Mortgage settlement dollars to Emergency Fund; up to $6 million available to DOJ with plan

E-Fund - Philip Morris Settlement all to General Fund; no $8.9 million SPA for Crime Victims

DOJ - Farmers' Settlement all to DOJ Crime Victims Account ($8.9 million)

February 2012 Rebalance Plan - Revisions from Post-March 2012 Forecast Plan


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February 2012 Rebalance Plan - Revisions from Post-March 2012 Forecast Plan

Remaining Resources

General Purpose Emergency Fund 27.2

Original $25 million plus $2.9 million; less $0.7 million

DSL for Portland Harbor special witness fees

Special Purpose Appropriation for Select Issues 60.0

For potential allotment reduction mitigation; foreclos

issues; human services actual caseload increases

General Fund Ending Balance (after March 2012 forecast) 117.8

March 2012 forecast of $140.8 million less $23 million

transfer to General Purpose Emergency Fund

Education Stability Fund (projected balance after dist.) 9.8 March 2012 forecast of balance June 2013

Rainy Day Fund (projected with reversions) 56.0

Actual from March 2012 forecast = $46.1 million; with

anticipated General Fund reversions added as part of

11 ending balance transfer total could be approximat

$56 million (not known until June 2012 forecast)

Emergency Board Education Related SPA (remaining) 10.0

Total Special Purpose Appropriation is now $17.6 mill

$7.6 million used as part of rebalance plan; remaining

million proposed to be restructured for post-February

forecast decline education program mitigation (CCSF,

OHSU, Grant-in-Aid)

Emergency Board Other Remaining SPAs 7.5

Consists of ODF $2.7 million for fire protection (after

$2.1 million of SPA for 2011 fire season costs during 2

session; DOR $2.9 million for Elderly Rental Assistance

and DOJ $2.0 million for TMSA defense and Criminal

Convictions


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General Fund/

Lottery Funds Other Funds

Department of Education $431,521

Community Colleges & Workforce Development $95,768

Oregon Student Assistance Commission $29,294

Department of Human Services $6,078,677

Oregon Health Authority $5,070,089

Department of Corrections $7,886,806

Oregon State Police $2,541,490

Oregon Youth Authority $2,264,957

Business Development Department $441,808

Bureau of Labor and Industries $210,205

Department of Environmental Quality $169,003

Department of Land Conservation & Development $33,801

Department of Agriculture $197,170

Department of Forestry $366,173

Department of Fish and Wildlife $253,504

Water Resources Department $247,871

Secretary of State $305,217

Department of Revenue $1,126,687

Department of Veterans' Affairs $23,120

Military Department $109,081

State Library $19,886Employment Department $97,873 $250,000

Department of Administrative Services $2,000,000

Public Employees Retirement System $750,000

Department of Justice $600,000

Oregon Liquor Control Commission $200,000

Agency Total $28,000,000 $3,800,000

* Reform assumes reduction of mid-management, public affairs, and directly related support staff,

advertising expenditures, personal services contracts, etc.

Target Personal Services Reductions for Administr ative Mid-Management Positions and Business Operational Reform*


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Documents

Budget Rebalance Plan summary memo