A sneak peek at Gov. Kitzhaber's 2015-17 budget

Gov. John Kitzhaber plans to reveal a proposal for the 2015-17 budget Monday that he says will expand the social safety net for low-income Oregonians and increase funding for early childhood education.

The money to create and expand government programs isn't coming from a major cut this biennium — in contrast to the $15.9 billion 2013-15 budget where cuts to public pensions and sentencing reform provided additional educational dollars.

This cycle, Kitzhaber's budget relies a projected 12 percent increase to $17.7 billion in the general fund and cost savings from health care reforms like moving Oregon Health Plan participants into Coordinated Care Organizations.

Education

Education is the juggernaut in Oregon's budget. It historically consumes around half the state's funds.

The Oregon Education Investment Board is proposing nearly two dozen new programs that would add $870 million, or 5 percent of the current state budget, to what they received during the last cycle.

Kitzhaber isn't including all of the board's ideas, but he is pushing Rob Saxton's plan to get 95 percent of Oregon students reading well by third grade. That program has an estimated cost of $400 million.

"These investments will dramatically impact third-grade reading outcomes, which we know are predictors of future success in schools," he said.

A 10-year plan

The governor knows some of the spending he's proposing is tough to swallow in the short term.

"We know that for kids who are reading at a third grade level the (return on investment) is six or seven times the investment downstream because they graduate from high school, they get a job (and) they don't end up in the public safety system," Kitzhaber said. "But you can't show that return in two years."

That's why Kitzhaber has been pushing the idea of a 10-year budget plan since the start of his third term.

"If you have a 10-year budget, you can actually show that investments in 2015 will actually reduce costs in 2020," Kitzhaber said. "You have to have a longer term budgeting process, which we are doing."

Health care

Part of that long-term savings comes from changes Oregon made to the how the state runs its Medicaid program, Kitzhaber said.

By utilizing the Coordinated Care Organization model for Medicaid, public employees and potentially teachers during the 2015 session, the governor estimated the state will save close to $4 billion by the 2021-23 biennium. Most public employees have the CCOs as an option for their health care; Kitzhaber wants to expand that option to include teachers.

Subsidized child care

"In the budget, probably the biggest thing we've done is really expand the working families tax credit," Kitzhaber told the Statesman Journal. "One of the biggest things you lose when your income goes up, is you lose your subsidy for employment-related daycare. ... The working family tax credit offsets that reduction."

He also plans to "significantly increase the number of slots" so that some of the 732 Oregon families on the waiting list can enter the program. His office expects to expand the program by $49 million.

Cash assistance

Temporary Assistance to Need Families is a federal block grant that the states combines with some of its own money and disperses to the poorest Oregonians.

Historically, any money left over goes back into the state general fund, but Kitzhaber wants to change that.

"We are taking the savings from TANF, because we've got fewer people in the program, and reinvesting those (dollars) to do a better job of identifying and placing people in jobs and trying to smooth their transition off of TANF," Kitzhaber said.

Other priorities

Two other issues on the top of the governor's list for this session are extending the clean fuels program and expanding background checks for firearms purchases.