The impact of COVID-19 on the state budget means Governor Brown and state legislators will have to make hard choices. They should choose to prioritize working families and the people hit hardest by the recession.
By Melissa Unger, Executive Director of SEIU 503
State economists released their may revenue forecast on Wednesday, confirming what we already knew: Oregon must take swift action to protect the services our communities need as we recover from COVID-19.
Over the last two months nearly 400,000 Oregonians have filed for unemployment, SNAP claims are up 400% and public health costs are climbing. So many of our friends and family members – particularly low-income families, women, people of color and immigrants – have looked to state services for a lifeline in these difficult times. The worst thing we could do right now is cut off these lifelines.
In their report, the State’s economists predicted a $2.7 billion shortfall in the current budget (2019-2021), which means the State will have to take steps to balance the budget. Howe we do so is a choice. The Oregon I know will rise to the challenge and protect families from catastrophic cuts.
There are three things we can do right away that will help.
- Use every available federal dollar. This week the U.S. Senate is considering the HEROES Act, which would provide additional assistance to state and local governments. This is must-pass legislation. The Governor, state legislators, our congressional delegation, and advocacy groups must do everything in their power to push for its passage. Even without the HEROES Act, Oregon should use federal funds from the CARES Act and the Families First Coronavirus Response Act to protect frontline workers and the services we provide. These funds should be used to support agencies doing COVID-19 response work or to backfill revenue losses when possible.
- Decouple from federal tax cuts. The CARES Act cuts taxes for wealthy individuals and corporations by an estimated $135 billion. Because Oregon’s state taxes are “coupled” to federal taxes, these cuts will have an impact on Oregon’s budget. Giving a tax break to the people who need it least at the expense of public services is not in keeping with Oregon’s values. The Legislature should review the impacts of decoupling our tax code from federal tax law.
- Strategically use Reserve Funds. Oregon entered into this crisis on solid financial footing, with a healthy ending balance ($1.15B) and a healthy reserve fund ($1.5B). So much so that in April, Moody’s Analytics rated Oregon as one of the states best prepared to weather a recession. With an estimated $4 Billion shortfall in the 2021-23 biennium, we need to be thoughtful on using some reserves now and saving them for the future to offset future cuts.
Our public services and long-term care workers are on the frontlines of the fight against COVID-19. Whether we are providing free meals to kids who rely on school lunches, caring for people in nursing homes or in-home care, processing food assistance claims, or helping people file for unemployment benefits, SEIU 503 members are among the heroes of the pandemic.
A recovery that reflects Oregon’s values will protect services as well as the people who provide them. Layoffs and budget cuts in the public sector will send us deeper into a recession, forcing more people onto public assistance while at the same time reducing the ability to provide that assistance.
We must learn from the mistakes we made in 2008, when austerity measures at the state level made the recession worse. A recovery plan that reflects Oregon’s values will support Oregonians by protecting the services they rely on.