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Legislators will consider more cuts

Republicans may seek reductions in PERS and the Oregon Health Plan or try to revive vetoed bonding

With an additional revenue shortfall of up to &

36;300 million looming for the state, Rogue Valley Republican legislators say they may push for cuts in their least favorite programs, starting with the Public Employees Retirement System and the Oregon Health Plan.

When they report next month for an expected fifth special session, they also may revive a vetoed &

36;50 million bonding bill for schools and send it back to the governor.

Legislators say there is little certainty how the latest round of budget balancing will turn out.

But Republicans say they are certain there is no support for sending a tax increase to voters, ... not with Oregon having the highest unemployment in the U.S. and family wage jobs taking the biggest hit in this recession, said Sen. Jason Atkinson, R-Jacksonville.

Gov. John Kitzhaber's aides have said updated revenue projections will be released Thursday, showing an additional revenue shortfall of &

36;200 million to &

36;300 million. That's on top of an &

36;879 million shortfall already addressed by the Legislature.

Oregon's schools on Tuesday were given the promise of &

36;267 million in future school payments when the House overrode a Kitzhaber veto. But the chamber failed to override a veto on another school bill that would have produced a minimum of &

36;50 million and up to &

36;175 million if other revenues continue to decline.

I'm anxious to hear what the governor is going to propose Monday, said Sen. Lenn Hannon, R-Ashland, but right now the only thing we all know for sure is that we've got to start working together and resolve this, not polarize it further.

The present impasse and huge shortfalls mean everything's on the table in the next special session, said Atkinson, who hopes to revive an attempt to balance the budget with no new taxes by cutting major programs, while sparing schools any further pain.

We came within one vote of doing this in the third special session and had a few Democrats on our side, said Atkinson. The votes aren't there in the Senate for any new taxes, so it means going after PERS and OHP, plus many other non-essential government programs. The health plan is the governor's sacred cow, but in this kind of crisis, there are no sacred cows.

Hannon said he didn't know what could be cut out of PERS, after it took a big drop in the stock market over the past year, but the Oregon Health Plan is an option we can look at.

Rep. Rob Patridge, R-Medford, predicted the vetoed bonding measure for state school support would end up back on the governor's desk in the next special session, once it becomes evident there is no possibility of any new revenue-raising measures emerging from the Legislature.

In response to the expected revenue shortfall to be announced next week, minority Democrats are looking at sweeping cuts in the state budget or pushing the income tax bite up from 9 percent to 11 percent for one year for incomes over &

36;65,000, said Rep. Alan Bates, D-Ashland.

Another option, he said, is disconnecting Oregon from the federal tax code ' as most states have done ' to avoid the revenue losses associated with a federal stimulus package. This would net Oregon &

36;150 million to &

36;200 million, he said.

Patridge said the chasm between opposing parties in Salem is widening and predicted it would not heal during the budget process.

The governor is tilting at windmills while our school children are sacrificed, Patridge said. It's wonderful he wants to stand up for his education policy, but he's the one who created this crisis.

Hannon and Democratic Sen. Peter Courtney of Salem, both members of the Senate Budget Committee, hope to close the chasm a bit by presenting a bipartisan response to the governor's proposal, Hannon said.

The governor has to become more engaged and I've felt this for about nine months, said Hannon.

Bates said he plans to lobby fellow Democrat Kitzhaber to open talks with legislative leadership, with an eye to establishing areas of agreement before work commences.

There's a lot of anger and finger-pointing on all sides. Everyone has to calm down, Bates said.

Hannon said much of the impasse grows out of the inexperience of House members, many of them elected when term-limited legislators left.

The key leaders are only in their second and third term and they don't understand the issues. Revenue measures have to start in the House and it's been impossible to get their attention on this issue so far.

John Darling is a free-lance writer living in Ashland. E-mail him at .