How to Find $750 Million in Budget Savings Without Losing a Single Job

Tell your network:

Tell your network:

Like nearly every other state in the nation, Oregon is facing a budget caused by the economic recession.  The potential results have been splashed across newspaper front pages: cuts to schools, massive layoffs of frontline workers, and the loss of basic, critical services that protect the most vulnerable.

But there’s one area of the budget that has received almost no attention: The $7.5 billion the state spends with private, outside contractors on services and supplies, like phone and internet providers, office rent, travel, office supplies, and other items required for day-to-day operations.

An interesting report came across our desks last week. SEIU Local 503 asked state workers—the people who see government business day to day–what they thought about state spending. Those frontline workers had the same recommendation over and over: take a hard look at state money spent on services and supplies through vendor contracts.

No one would suggest that the general category of expenses is unnecessary. But, while education and human services are burdened with taking cuts in order to balance the budget, there has yet to be a proposal on reducing expenses on service and supply contracts. In fact, the budget for services and supplies has expanded since 2007, even while other programs have been cut.

Remember that our schools and human services are facing deep cuts—as much as 40% in some areas. Now check out this chart, which shows what we’d save through cuts to private contractors for state services and supplies, per biennium.

 

General Fund Savings

 Total Funds Savings

5% reduction 

$53,615,184

$373,852,003

10% reduction

$107,230,367

$747,704,006

15% reduction 

$160,845,551

$1,121,556,009

20% reduction

$214,460,734

$1,495,408,012


Keep in mind that the budget deficit for the biennium is $3.5 billion. You can see that just a 5% reduction would save over $373 million – that’s 10% of the total budget deficit!

Now, we’re not talking about $10,000 toilet seats. But we are talking about looking at service providers who win big state contracts. If teachers and home-care workers are being asked to give up big chunks of their pay, shouldn’t we ask Verizon and Georgia-Pacific to make the same sacrifice?

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