Oregon Gov. Ted Kulongoski announced Tuesday that income tax collections and other state revenue are running $560 million below projections and called for schools, universities and all state agencies to plan on cuts of approximately 9 percent in the next 13 months to balance the state's budget.
As a result, Portland State University President Wim Wiewel wrote the following note to PSU faculty, staff and students:
State leaders learned this morning that Oregon's General Fund revenue forecast for 2009-2011 is down by $560 million from the February forecast. As a result, Governor Kulongoski has asked universities, schools and all other state agencies to plan for a reduction in their general fund allocation of approximately 9 percent between now and June 30, 2011. For PSU, the financial impact over that time period will be approximately $5 million.
The Department of Administrative Services (DAS) will issue detailed instructions over the next few days providing more specifics about the reduction plans, which are due back to DAS by June 7.
The Governor has asked that his letter (text below) be shared with all of you. The letter thanks state employees for their hard work and continuing sacrifices. It also states that the Governor intends to continue pay freezes for executive, management and other unrepresented state employees and that he will be asking labor organizations to make similar sacrifices. The letter does not specify how these steps will impact OUS institutions.
I am as distressed as I know all of you are by this unfortunate news. The last two years have been very challenging and it is clear that we are not yet out of the woods. Your resilience and good spirit in these difficult times have been remarkable and make me very proud to be part of this university community. I know we will continue to pull together to meet this newest challenge.
We will keep you posted as we learn further details.
Below is the text of Gov. Kulongoski's letter to state employees:
May 25, 2010
Dear State Employees:
As feared, the effects of the recession are continuing to take a toll on our budget, as today's revenue forecast revealed in unexpectedly harsh terms. The new shortfall of $560 million amounts to nine percent of our general fund budget for the remainder of the biennium.
Meanwhile, more and more Oregonians who are unemployed or barely scraping by are continuing to turn to the state for assistance, which makes it all the more important to do what we can to maintain state services.
I recognize that you and your co-workers have been doing your part. You have shared the sacrifice with pay freezes and unpaid furlough days. Thanks to you, we have been able to sustain many critical services for the citizens of Oregon.
But today's revenue forecast confronts us with a new reality that we cannot ignore. We will have less money to spend to meet the needs of Oregonians. As a result, layoffs and reductions in services in our general fund programs will be unavoidable.
For this reason, I am continuing in effect the freeze on step increases for management, executive service and unrepresented employees. Further, I will ask our labor organizations to follow suit. By so doing, we can help to save jobs and preserve services.
Finally, I will be directing all agencies where layoffs appear likely to explore options, such as additional furlough days or reduced workweeks, to minimize such layoffs and to be prepared to discuss those options with labor organizations for represented employees.
I am not taking these actions lightly, nor am I implying in any way that you and your coworkers are to blame for our circumstances. To the contrary, you have helped us weather a terrible economic storm. We owe you our respect and gratitude.
But, as the effects of the recession continue, we must continue to tighten our belts. I ask for your understanding and cooperation in meeting the challenges ahead of us. And I am confident that the actions we are taking today will put us in a better position when we finally emerge from the dark clouds of this recession.
Theodore R. Kulongoski