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New Analysis Finds Oregon Hit Hard by Cuts in President’s Budget for 2008

News Release
February 21, 2007 Download PDF

Oregon would lose $123 million in federal funding next year for a wide range of public structures, including K-12 education and Head Start, under the President’s budget for 2008 according to a report released today by the Washington, DC-based Center on Budget and Policy Priorities. The funding cuts, scheduled to deepen in future years under the President’s proposal, would force Oregon to either raise taxes to compensate for the lost federal funds, or reduce basic public services. The analysis prompted criticism of the President’s budget by Governor Kulongoski, advocates for Oregon children, and a local research institute.

Janet Bauer, a policy analyst at the Oregon Center for Public Policy who reviewed the analysis, expressed disappointment at the President’s priorities. “This budget says that maintaining critical infrastructure in Oregon such as education, safe drinking water, and public safety is not as important as extending tax breaks, including tax giveaways for millionaires. These priorities would send Oregon and the country in the wrong direction,” she said.

Bauer also noted that the President’s budget worsens the federal deficit by including massive tax cuts along with the program cuts. “The President’s budget would worsen the federal government’s fiscal situation, because the tax cuts would cost much more than the program cuts would save,” she said.

“This budget is a roadmap toward greater inequality in Oregon,” Bauer added. Under the President’s budget, the average millionaire nationally would receive $162,000 in 2012 alone, while funding cuts would harm low- and moderate-income families across the country, including in Oregon. Many low income families could end up losing child care assistance and job training. Pregnant women could lose supplemental nutrition for themselves and their young children. The elderly and individuals with disabilities could lose help with heating their homes.

Some programs that help large numbers of Oregonians would be eliminated entirely. Other programs would be cut deeply over the next five years. The new Center on Budget and Policy Priorities report estimates, for example, that the President’s budget would:

“We simply can’t produce the results everyone wants for our students if the federal government is going to reduce its investment,” said Jonah Edelman of Stand for Children.

“If we want to support working parents and ensure that our kindergarteners are ready to learn, then we need to invest in quality child care and early education. This budget goes in the opposite direction, leaving more children without the child care help they need,” said Cathy Kaufman, of the nonpartisan advocacy group, Children First for Oregon.

Faced with these funding cuts, Oregon’s Head Start programs have several choices. They can serve fewer children; cut back on teachers’ salaries, classroom materials, and the specialized services they provide to children; or they can try to raise money from other sources. The federal funding Oregon would receive in 2008 would serve 1,000 fewer children than we would serve if funding had kept pace with inflation since 2002.

The President’s proposal is inconsistent with the priority outlined by Governor Ted Kulongoski to fully fund Head Start so that all eligible Oregon children can benefit.

“Head Start is critical to ensuring every Oregon child enters kindergarten ready to learn. Now is the time to move forward to make early childhood education available to all eligible kids – not take steps backward with budget cuts and reduced enrollment, which is what the President’s budget would deliver,” said Governor Kulongoski.

In addition to the proposals in the President’s budget, Congress faces other important budget and program decisions important to Oregon. The Food Stamp Program and the State Children’s Health Insurance Program, known by its initials SCHIP, are both up for renewal in 2007.

“Congress must take this opportunity to strengthen these highly successful programs so they can help more of those who need assistance,” said Bauer. “Oregon’s success in reducing its hunger rate has hinged primarily on an expansion of the state’s food stamp program. These gains are now threatened by the proposed cuts,” she added.

The SCHIP program has helped reduce the share of low-income children in Oregon who are uninsured. “Oregon will need additional funds in coming years to reach the goal of insuring all of the state’s children so they get the health care they need,” said Bauer. “Oregonians can’t afford the President’s plan to under-fund SCHIP.”

Bauer concluded with a call to change course. “It’s time now to embark on a new course. By making the right choices, Congress can craft a budget that meets Oregonians’ priorities while pursuing a more fiscally responsible path than the President has proposed.”

The Oregon Center for Public Policy does in-depth research and analysis on budget, tax, and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.