Earlier this week, The Associated Press reported for the third time in a month, an analysis of state finances is warning that budget deficits and spending cuts are on the way.
As many as 13 states say they could face shortfalls for the fiscal year that begins July 1 in most states, including large states like California and New York.
Others apparently are not far behind.
It's amazing while nearly half the states in the country will face budget shortfalls next year or the year after, Oregon is projected to collect just enough revenue to stay above water, according to analysts at the Oregon Center for Public Policy.
In recent years, Oregon has earned a dubious reputation for its funding shortfalls.
Oregon escaped mention in the report identifying the 24 states confronting budget problems. Of that group, the 13 mentioned face a combined budget shortfall of at least $23 billion for fiscal year 2009. The report, by the Washington, D.C.,-based Center on Budget and Policy Priorities, is based on a survey of all 50 states and the District of Columbia.
The other two studies heralding the shortfalls came from the National Conference of State Legislatures and the National Governor's Association.
Just last month, Oregon state economists predicted general fund revenue will come in $116 million above the amount anticipated for the 2007-09 budget period. The additional dollars are slight, in the context of the state's $13 billion expected general fund revenue.
"Oregon's tax structure is far from perfect," noted Oregon Center for Public Policy analyst Michael Leachman, "but it's performing better than that of many states. And state economists are doing a good job forecasting our economic performance."
According to the OCPP, the revenue shortfalls plaguing other states stem, in part, from the bursting of the housing bubble, which has dampened revenue from sales taxes on the purchase of furniture, construction supplies and other home-related products.
The slowdown in the national economy apparently is not the sole cause of budgetary woes in other states. In some cases, when times were better, they enacted tax cuts that now are proving unaffordable.
Some of the states that were in better shape than Oregon a few years ago, now are suffering because their state revenues don't grow in tandem with the economy and the cost of providing public services. Oregon's almost complete dependence on the income tax took a heavy toll when personal income was down and unemployment was higher.
Now that personal income has risen, Oregon's revenues have rebounded. Plus, the state took a critical step when it withheld the corporate kicker in order to provide for a potential economic downturn.
In a report released this week, Leachman cites five major flaws he sees with Oregon's tax system: "a reserve fund that is too small to weather a downturn and unable to grow by capturing unanticipated revenues; a weak corporate income tax that allows too many profits to go untaxed; property tax caps that pressure the state budget and restrain local governments; a supermajority requirement that hampers legislative enactment of new revenue measures; and a tax system that exacerbates income inequality."
Oregonians should be pleased the stream of revenue happens to be high enough at the moment to sustain our present system of government, but that also shouldn't deter us from seeking to fix the flaws.
Permanent elimination of the corporate kicker, 86 percent of which goes out of state, would help create the reserve fund and contribute to long-term stability. That's a first step.
The best time to address the other aspects of the taxing system is now, not when we are in the midst of another budget crisis.