[ODF_Private_Forests] State Forester's Message - State Revenue Forecast

[WEEKS Kevin]

Private Forests News list subscribers:

State Forester Marvin Brown sent this message to ODF staff Thursday afternoon, detailing preliminary ODF responses to the budget reductions implemented following the release of the State Economist’s revenue forecast this week.

Kevin Weeks
Oregon Department of Forestry
(503) 945-7427

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Body:

Message from Marvin and the Executive Team

Hi everyone –

We all got another reminder this week that our economic troubles are far from over, and that tax revenues to state government are inadequate to sustain services at their current levels.

As you’ve probably seen in the news, the latest state revenue forecast, released on Tuesday, showed continued weakness in the economy and unemployment persistently above 10 percent in Oregon, even though the recession is officially over.

A new budget gap. The forecasts have been showing for some time that agencies will need to cut their budgets sharply for the two-year budget period beginning July 1, 2011. But Tuesday’s forecast raised an additional challenge: Revenue for the current biennium is substantially below earlier estimates, and state government needs to reduce General Fund spending by about $577 million to keep the 2009-2011 budget in balance.

That’s about 4.5 percent of the state’s General Fund budget overall, but about 9 percent of the money available to spend during the rest of the biennium. No special session of the Legislature is currently planned to readjust the budget. However, the law does allow the Governor to order across-the-board cuts to balance the budget, and Governor Kulongoski has directed agencies to reduce their remaining 2009-2011 budgets by 9 percent.

Limited discretion. In the other budget reduction processes we’ve dealt with recently, we’ve sketched out scenarios for the Legislature’s consideration, with some leeway to propose where within the agency we would reduce spending. The current process provides much less flexibility. The Governor has authority only to reduce appropriations across agencies by an equal percentage.

For us, this means General Fund reductions of about $226,800 in Private Forests, $1.4 million in Fire Protection, and $158,600 in Agency Administration. The total reductions in Fire will actually be larger, because General Fund losses there trigger additional losses in landowner assessments.

There is no General Fund appropriation in the State Forests Division, which is sustained through timber sale revenue.

Time is short. With just about half of the biennium remaining in which to make the necessary cuts, the Governor has asked agencies to submit their plans by June 8, so they can be implemented July 1.

The Executive Team has started work on these plans. As we’ve done in the past, we’ll strive to provide the best possible services with the resources we have, while minimizing the need to reduce our workforce – our most valuable asset. Here’s where we are in preparing our plans:

Private Forests. It appears we can reach our target by substituting federal funds for General Fund in some stewardship forester positions; reducing spending on services and supplies; and holding some positions vacant, including the Division Chief position, which Jim Paul held before his recent move to the Department of State Lands.

The fund shift in the stewardship forester positions changes those jobs, eliminating Forest Practices administration in favor of the work specified by the federal funding, such as bark beetle treatment.

The plan would also reduce Private Forests funds that are used for projects in the Forest Resources Planning Program.

Fire Protection. Reducing initial attack always raises the possibility that more fires will escape, costing more in the long run. Conditions are very different in our protection districts across the state, and there’s no one-size-fits-all solution.

Each district and Headquarters will be assigned a proportionate share of the overall reduction target, and will work with stakeholders on the best ways to achieve the needed reductions. Instructions are going out to districts today, and plans will be due back in Salem by June 2.

Agency Administration. It appears we can reach our target by eliminating funding for several information technology projects. These include a replacement for the Track-It problem-tracking system, and new tools to improve IT security.

The long-term outlook. As we’ve discussed in earlier messages, it’s time for a fresh approach to funding public forestry services in Oregon – one that eliminates our dependence on an ever-diminishing slice of the state’s General Fund.

It may seem like a tough time to look for new funding sources. But this latest revenue forecast, on top of the substantial reductions we’ve already experienced, only bolsters the case.

We’ll need to think creatively and work with a wide range of stakeholders – with anyone who has an interest in the forests that are so important to Oregon’s identity and wellbeing. We’ve already begun discussions with the Board of Forestry, legislators, and interest groups.

Once again, we thank you for everything you do for Oregonians and their forests, in the face of considerable change, uncertainty and reduced resources. We’ll keep you updated as we face the current budget challenges, and as we search for a better way to support our agency’s important work.

Take care,

Marvin and the Executive Team





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