Tax reform -- broaden the base, save the "kicker" in a reserve fund. Broaden the economy.Oregon one of 10 states in 'greatest fiscal peril' | Politics & Elections - - Oregonlive.com.
Even though the national economy has begun to rebound, Oregon is likely to have a harder time coming up with enough money to pay for schools and other public services -- or finding enough places it can cut back its spending -- than it did when patching together a balanced budget for 2009-10, said Susan Urahn, managing director of the Pew center.
Her reasoning: Oregon's unemployment will remain high, causing tax revenues to stay low; federal stimulus money to bail out state budgets has largely run out; and voter mandates including long sentences for repeat criminal offenders mean some budget cuts are off limits.
In the long term, states like Oregon would benefit if they diversify their economy, give lawmakers more latitude to make tax and spending changes and reverse voter mandates such as Oregon's unique kicker rebate that prevents the state from building reserves when times are good, Urahn said.
But lawmakers don't have time for a long-term fix when they must balance budgets for 2010-11 and 2011-12 and it's unclear how states including Oregon will keep from going over the cliff, she said. The January vote on whether to keep or reverse $735 million in higher taxes on corporations and high-income individuals will be one key decision point, she said
The nonpartisan Pew Center on the States is funded by the Pew Charitable Trusts and aims to conduct rigorous research on state policies to determine what works and what does not.