Budget Highlights 2003-05 Legislatively Adopted Budget LEGISLATIVE FISCAL OFFICE SEPTEMBER 2003 STATE OF OREGON LEGISLATIVE FISCAL OFFICE 900 COURT STREET NE KEN ROCCO STATE CAPITOL, ROOM H-178 LEGISLATIVE FISCAL OFFICER SALEM OR 97301-4048 LARRY NISWENDER PHONE 503-986-1828 FAX 503-373-7807 DEPUTY LEGISLATIVE FISCAL OFFICER September 25, 2003 To the Members of the Seventy-Second Oregon Legislative Assembly: The Legislative Fiscal Office staff has prepared the following Budget Highlights: 2003-05 Legislatively Adopted Budget. In addition to program area summaries, new sections to the document include “Legislative Actions Affecting the 2003-05 Budget” and “Potential 2003-05 Budget Risks and 2005-07 Tentative Budget Issues.” A detailed analysis of the budget by program area and agency will be published later this year. We hope you find this resource useful and invite you to call the Legislative Fiscal Office if you have any questions. Ken Rocco Legislative Fiscal Officer Legislative Fiscal Office 900 Court Street NE State Capitol, Room H-178 Salem OR 97301 Phone: 503-986-1828 FAX: 503-373-7807 Administration Ken Rocco, Legislative Fiscal Officer .........................503-986-1844 Emergency Board Larry Niswender, Deputy Fiscal Officer ...................503-986-1839 Legislative Branch Gina Rumbaugh, Office Manager...............................503-986-1829 Joan Diaz, Administrative Support ........................503-986-1819 Budget Analysts Sheila Baker.....................................................................503-986-1838 Human Services, Children’s Programs Steve Bender....................................................................503-986-1836 Higher Education John Britton .....................................................................503-986-1816 Human Services, Health Plan Susie Jordan.....................................................................503-986-1835 Transportation, Parks and Recreation Robin LaMonte...............................................................503-986-1845 Judicial Branch, Economic Development, Consumer Services Sue MacGlashan.............................................................503-986-1817 K-12 Education, Natural Resources Rick Olsen........................................................................503-986-1840 Housing, Employment, Secretary of State Paul Siebert......................................................................503-986-1843 Natural Resources Dallas Weyand................................................................503-986-1834 Administrative Services, Revenue, PERS Doug Wilson ...................................................................503-986-1837 Public Safety Fiscal Analysts Monica Brown ................................................................503-986-1832 Human Services, Judicial Branch, Transportation Judi James ........................................................................503-986-1842 Natural Resources, Public Safety Adrienne Sexton.............................................................503-986-1841 Education, Administration, Economic Development Table of Contents Summary of 2003-05 Legislatively Adopted Budget.......................................................................1 Summary of Legislative Actions Affecting the 2003-05 Budget ...................................................12 Education Program Area ................................................................................................................19 Human Services Program Area ......................................................................................................25 Public Safety/Judicial Program Area..............................................................................................30 Economic Development and Consumer Services Program Area ...................................................35 Natural Resource Program Area.....................................................................................................37 Transportation Program Area.........................................................................................................39 Administration Program Area ........................................................................................................41 Legislative Branch..........................................................................................................................42 Emergency Fund.............................................................................................................................42 Capital Construction and State Bonding Debt................................................................................44 Potential 2003-05 Budget Risks and 2005-07 Tentative Budget Issues.........................................51 Appendix A: Number of Full-Time Equivalent Positions............................................................A-1 Appendix B: Summary of Expenditures by Program Area and Fund ..........................................B-1 Appendix C: Summary of Expenditures by Program Area, Agency, and Fund...........................C-1 Summary of 2003-05 Legislatively Adopted Budget ____________________________________________________________ Total Budget The total legislatively adopted budget (LAB) for the 2003-05 biennium is $37.081 billion. The adopted budget includes $11.496 billion in combined General Fund and Lottery Funds, $17.532 billion Other Funds, and $8.053 billion Federal Funds. The 2003-05 total budget represents a 7.2% increase over the 2001-03 biennium’s legislatively approved total budget of $34.605 billion. 2003-05 Legislatively Adopted Budget Totals $37.081 Billion 7.2% Increase from 2001-03 Legislatively Approved Federal Funds General Fund $8.053 Billion $10.739 Billion 21.7% 29.0% Lottery Funds $.757 Billion 2.0% Other Funds $17.532 Billion 47.3% In adopting the 2003-05 budget, the Legislature completed the longest session on record, 227 days (20 more than the 1993 session). The 2003 regular session followed five special sessions in 2002 as falling General Fund resources continued to force rebalancing actions by the Legislature. The length of the 2003 regular session was partly due to the need to rebalance the 2001-03 budget once again following the combination of the temporary income tax referral failure (Ballot Measure 28) in February 2003 and a continuing decline in 2001-03 revenues identified in the March 2003 revenue forecast as a result of persistent economic weakness. The Legislature was further challenged in developing a budget for the 2003-05 biennium when the May 2003 revenue forecast again reduced the amount of projected revenue available for the biennial budget period. General Fund and Lottery Expenditures General Fund and Lottery Funds expenditures, which total $11.496 billion for the 2003-05 biennium, represent approximately 30% of the total budget. The total represents an 8.7% increase from the 2001- 03 legislatively approved budget, but a 4% decrease from what the Legislature adopted at the conclusion of the 2001 regular session. The legislatively approved budget for 2001-03 represents the authorized budget following all Emergency Board actions, the five 2002 special sessions, the December 2002 allotment reductions (ratified in SB 859), and legislative actions during the 2003 session to rebalance the budget and adjust limitations, including “Special Session 6” following the defeat of Measure 28 in February 2003 (SB 5548), and the latest Department of Human Services (DHS) rebalance (SB 5549). LFO 2003-05 Budget Highlights 1 2003-05 General Fund & Lottery Funds Total $11.496 Billion 8.7% Increase from 2001-03 Legislatively Approved 4.0% Decrease from 2001-03 Legislatively Adopted Human Services $2.481 Billion Other Ed 21.6% $1.546 Billion 13.5% Total Education Public Safety $6.735 Billion $1.246 Billion 58.6% 10.8% K-12 Education $5.19 Billion 45.1% All Other Programs $1.034 Billion 9.0% Nearly 59% of the state’s General Fund and Lottery expenditures are dedicated to education programs, including $5.2 billion, or 45% of the total, to the K-12 State School Fund budget. More than 90% of the state’s expenditures are found in the three major program areas of Education, Human Services, and Public Safety. The following table compares the 2003-05 LAB General Fund and Lottery expenditures to the 2001-03 adopted and approved budgets by major program area. General Fund & Lottery Funds - 2003-05 Legislatively Adopted Budget - Historical Comparison (Dollars in Millions) 1 2001-03 2003-05 % Change % Change Legislatively 2001-03 2003-05 Legislatively 2003-05 Leg. 2003-05 Leg. Adopted Legislatively Governor's Adopted Adopted from Adopted from 1999-01 Budget Approved Recommended Budget 2001-03 Leg. 2001-03 Leg. Actuals (LAB) Budget 2 Budget (LAB) Adopted Approved Education K - 12 (excl. ODE) 3 $4,568 $5,080 $4,417 $4,978 $5,190 2.2% 17.5% Higher Education 4 872 822 755 882 771 -6.1% 2.2% Community Colleges 5 436 475 382 414 423 -10.8% 10.7% All Other Education 287 372 337 353 351 -5.7% 4.2% Total Education 6,163 6,748 5,891 6,627 6,735 -0.2% 14.3% Human Services 2,287 2,641 2,451 2,299 2,481 -6.1% 1.2% Public Safety 1,189 1,351 1,244 1,406 1,246 -7.8% 0.1% Natural Resources 216 279 265 244 227 -18.8% -14.4% All Other Programs 6 716 955 727 828 807 -15.5% 11.0% Total Expenditures $10,571 $11,974 $10,579 $11,404 $11,496 -4.0% 8.7% 1 Amounts may not add due to rounding. 2 The 2001-03 legislatively approved represents expenditure authorizations through all 2001-03 Emergency Board actions, the