Initiative Tracker -- Improve Public Finance and Services

Objective

Revamp Oregon's system of public finance and budgeting to provide stable funding for critical public services and to create strong incentives for economic growth

Initiative Leaders

Malia Wasson, U.S. Bank; Brett Wilcox, Summit Power Alternatives; Northwest Aluminum, Ken Thrasher, Compli

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• Agenda for 2008
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Agenda for 2008

The Oregon Business Plan recommends that the Governor and Legislature:  

• Expand the budget horizon and establish performance expectations.  Absent long-term forecasts of revenues and expenditures, the state’s visionary leaders – from both the public and private sectors – will struggle to implement broad, important policy changes to education and healthcare. The Governor and legislative leaders should develop and require 10-year forecasts of programs and policy initiatives under current law. As they expand the policy horizon, they should set clear performance expectations for each major program in the budget.

• Finish the Reserve Fund work.  Lawmakers and voters should be applauded for the creation of two reserve funds during the past five years. Oregon stands a much better chance of maintaining its core education, healthcare, and public safety services during the next downturn. However, some additional work should be done. The bulk of revenue sitting in the newly created ‘rainy day” fund came from a one-time source, and the adequacy of the fund in future economic cycles hinges on the election of fiscally prudent lawmakers.

• Diligently monitor the condition of the volatile pension system.  Oregon’s comprehensive reform to its pension system was perhaps the most difficult and important public policy change of the last decade. Strong investment returns since 2003 have further strengthened the system’s financial position. However, PERS remains inherently volatile, and business leaders call for routine and robust analyses of the system’s long-term condition.

• Review public employee compensation and ensure that public-sector pay supports the state's strategic goals.  Having overhauled the retirement system, policymakers should now conduct a full review of public sector compensation. The state knows very little about how public compensation stacks up to compensation for similar work in the public sector of other states, the private sector in Oregon, or any other appropriate benchmark. Policymakers should thoroughly inventory compensation packages and then determine where compensation policies support the state’s strategic goals and where they don’t. In some cases compensation may be too high, in some cases too low, and in others, generally appropriate.

• Diversify the state tax base and address the inadequacy of local revenue in timber counties.  Business leaders call for a revenue system that promotes economic vitality and provides stable support for fundamental public services. At the state level, Oregon’s system falls short on both counts. At the local level, uncertainty around long-time federal payments has left critical public services in flux in the 18 O&C counties. Business leaders will participate on, and collaborate with, the Task Force on Comprehensive Revenue Restructuring to design an adequate and stable revenue system.

For a more detailed description of these recommendations, please review the  2008 Oregon Business Plan Policy Playbook and Initiative Guide.

Tell us what you think about our 2008 Public Finance recommendations.  Review public finance accomplishments here.  

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