Agency General Fund Budget Reduction Plan

As we come together to minimize the negative impacts of the current pandemic on businesses and the economy, state government has funding challenges to contend with as well. Our state economists anticipate a $3 billion revenue shortfall in the upcoming May 20 revenue forecast. In order to prepare for this anticipated loss of General Fund revenue, the Governor has directed an 8.5% General Fund appropriation reduction to each agency's 2019-21 biennial budget. This equates to a 17% reduction when cutting a two-year budget nearly 10 months into the two-year budget cycle.

As the Governor has indicated, she will be working with the Legislature after the May 20 forecast on how to best balance the budget to move forward. Every agency who receives General Fund is required to submit their plan to comply with the 8.5% General Fund appropriation reduction. Business Oregon is funded through multiple funds—the largest being Lottery Funds—but the agency has five General Fund appropriations and has submitted the following plan to comply with the Governor's directive.

  • Oregon Arts Commission ($332,938.20)—The Arts Commission will need to reduce their General Fund (GF) grant program for fiscal year 2021 from $1,006,895 to $673,957. This would affect their grant making for operating support, project grants, and individual artist grants.
  • Solar Incentivization Program ($292,297.83)—If actual disbursements are close to projections for program payments, a reduction of $141,000 on the program disbursements would not require the program to amend current agreements or short future payments. The remaining balance will come from vacancy savings for the position associated with this program. It was vacated May 1, 2020, and will remain vacant to achieve the balance of the reduction.
  • University Innovation Research Fund (UIRF) ($850,000)—This reduces the original $10 million GF appropriation to $9,150,000 for the UIRF. This reduces the availability of resources to the Universities to match federal grants for applied research and development projects that have a connection to economic development.
  • Special Public Works Fund, Pendleton Levee ($153,000)—This reduces the $1.8 million allocation of GF in the March 2020 Emergency Board, for reimbursement of loans made from the Special Public Works Fund to the city of Pendleton for levee repairs. There is currently $1,647,000 available for reimbursement of this project.
  • Strategic Reserve Fund, Eastern Oregon Clean Up ($127,500)—This reduces the $1.5 million allocation of GF in the March 2020 Emergency Board, to the Strategic Reserve Fund for support of business clean-up and restoration expenses necessitated by flooding in Eastern Oregon that are not reimbursed by insurance. Resources now available for this project are $1,372,500.

This amounts to a total reduction to Business Oregon General Fund of ($1,755,736.03).

Posted May 13, 2020