There is a real possibility that it will be worse in 10-11 than in 09-10. But since the legislature budgets on a biennium, yes they should count on using the rainy day fund over the next two years. But they're also using some of it THIS year to avoid shaving five days off the school year. That's a laudable goal, but five school days isn't going to look like much compared to the blood bath of service cuts that are still coming.

IMHO, reluctance to spend reserves is a good thing and should be encouraged. It may end up being necessary, of course, but let's prove that first.

I agree that we are right to avoid tapping reserves. A market recovery will happen long before the availability funds for a legislative budget. I have seen no indication of a market recovery and no sensible legislation is even being proposed that would fix the current problems. We are almost certainly in a liquidity trap like the one that that caused the Lost Decade in Japan. After yesterday's concerns about the state economist, we should be playing this on the safe side.

Agreed. What will it take for the Legislature to fund a third leg for the stool by trading a reduced state income tax for a modest sales tax. Relying on property and income taxes virtually ensures a shortfall when the economy tanks. It also unfairly burdens homeowners and the gainfully employed.

Go to hell, JMH. You obviously are not from here. The only way a sales tax is gonna ever fly in Oregon is if property tax is ELIMINATED. Or if income tax is eliminated altogether.

Wake up people - It's not that they don't want to tap this rainy day fund, but rather that the money is simply not there. It only exists on paper. It's long gone. Nothing but a shell game. They just need to fess up. It either got burned up in a bad hedge fund or Teddy let Neil's gang fritter it away.....

Excuse me but the legislature is also busy cooking up billions in higher and new fees and taxes. Of which none will be funding existing shortages.
They are all for new programs.

Think about this for second.

Is this a good time to be starting new ways to spend?

"Go to hell, JMH. You obviously are not from here. The only way a sales tax is gonna ever fly in Oregon is if property tax is ELIMINATED. Or if income tax is eliminated altogether."

In the thread on Wall St. and the archaic media's failure to see the collapse coming, I mentioned the problem that the state has in acting sensibly when the loudest voices in the public (and, thus, in the Lege) are people who have been brought up to expect free lunches served hot daily and to imagine all government as a conspiracy to bilk the good, honest, hardworking plowmen of the soil who are, of course, themselves careful to ensure that they have paid everything that they owe in taxes. Grover Norquist -- Mr. "I want to shrink government enough so I can drown it in a bathtub -- he's not from here either, is he. Pity, he'd fit right in.