Oregon government stands at the edge of a financial chasm as precarious as any in its 151-year history, hemmed in by the global recession, questionable spending decisions and a budget-draining combo of skyrocketing expenses and sluggish growth.

Consider this sobering fact: State expenses, including payroll, health and retirement benefits, and debt payments, are slated to rise by nearly $4 billion over the next two years -- a 26 percent jump. During the same period, however, revenues to pay those expenses are expected to increase by a little less than $2 billion, or about 14 percent -- and that assumes a return to a robust economy.

Oregon simply can't keep up.

Lacking a substantial tax increase, which appears unlikely, the state won't have the money to offer the same level of services, pay and benefits to the same number of people.

The state has faced tough times before, but this crisis is a game changer, economists and political leaders agree. Past budgetary tricks, such as borrowing or sweeping money from other state funds, won't cut it.

Read it all.

Filed under: * Economics, Politics • Economy • Personal Finance • Pensions • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

1. AnglicanFirst wrote: The voters of Oregon ‘did it to themselves.’ Those voters can ‘fix’ this problem by ‘undoing’ what they ‘did to themselves.’ ‘Pro bono’ consultative advice.  No fee charged. July 27, 9:40 am | [comment link]

2. John Wilkins wrote: welcome to the mean economy. July 27, 3:02 pm | [comment link]

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