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Rainy-day education fund will be sapped

Legislators plan more borrowing and raiding to keep schools running

Legislators are set to drain the school rainy-day fund dry and borrow more tobacco money to prevent additional hits to core government services from an expected &

36;300 million shortfall.

Most of the new shortage in the current budget would be made up by borrowing &

36;150 million on future tobacco revenues and depleting the education rainy-day fund of &

36;125 million.

We'll gut it to finance the rest of this year, said Democratic Rep. Alan Bates of Ashland. Schools shouldn't have any more cuts.

But that leaves &

36;25 million to be cut from somewhere.

Many smaller programs, including the Commission on Black Affairs and the Commission on Hispanic Affairs, are part of a long list that could be placed on the chopping block in an effort to save &

36;13 million.

Some of these programs amount to as little as &

36;400 savings for administrative services related to community development, or as much as &

36;850,000 for youth crime prevention programs.

Other possible cost savings include a &

36;1 million cut in juvenile crime prevention grants and &

36;1.1 million saved by halting a cost-of-living increase for many government workers.

A travel budget for legislative agencies amounting to &

36;400,000 for the remainder of this fiscal year also has been earmarked.

Many of the cuts to these programs could continue into the 2003-05 budget cycle, saving an estimated &

36;40 million.

Bates, who is on the Joint Ways and Means Committee, said borrowing and raiding are some of the few options to bolster the government's sagging budget at this point.

It would be difficult to make the cuts this late in the game because you'd have to close the government down, said Bates.

But legislators say there is little left to borrow and few one-time funding sources to drain for the 2003-05 budget, which could be from &

36;1 billion to &

36;2 billion short.

The Legislature already cut &

36;1.1 billion to balance its 2001-03 budget during five special sessions, forcing school districts like Medford to cut 10 days out of the school year.

Republican Rep. Rob Patridge of Medford said whatever cuts are made to programs before the end of the fiscal year will be painful.

I had the director of the Oregon Women's Commission in here sobbing this morning, he said Monday. That's how I started my day.

The women's commission could see &

36;19,000 in reductions this year and another &

36;160,000 in the next biennium.

Even though legislators can make up much of this year's shortfall through one-time funds, Patridge said it would be more prudent to anticipate a &

36;350 million shortfall that would provide a buffer even if the revenue forecasts aren't as bleak as predicted.

It may end up that we have about &

36;75 million in cuts, he said. We need to make plans for &

36;350 million so we at least have some reserves.

He said the shortfall represents a third of the total &

36;900 million budgeted by the state for its expenses until the end of this fiscal year.

Patridge, who is on the Joint Ways and Means Committee, said other services being considered for cuts include the pre-kindergarten program, which would save &

36;8 million in the current budget and &

36;53 million in the 2003-05 budget.

Republican Sen. Lenn Hannon of Ashland urged caution in dismissing the possibility of more cuts to education and other core services before the end of this fiscal year.

It's a little too presumptive to say it's a done deal and nothing's going to happen, he said.

More gloomy revenue forecasts could scuttle any attempts to balance the shortfall through one-time revenue sources and borrowing alone, he said.

Hannon will await another revenue forecast due this Friday ' which could offer the state good or bad news ' before making a prediction about the depth of potential cuts.

Reach reporter Damian Mann at 776-4476, or e-mail