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State congressmen anticipate $800 million budget shortfall

State leaders are predicting an $800 million shortfall to be announced in the economic forecast due out on Friday, State Rep. Peter Buckley and Sen. Alan Bates, both Democrats from Ashland, told a panel of the city's leaders this morning at the weekly legislative call-in hosted by the Ashland Chamber of Commerce.

The state is in for "a very rough couple of years" with a projected shortfall of up to $5 billion for the next biennium, Buckley told the panel gathered around a conference phone.

Legislators are also concerned numbers for this fiscal year could worsen by May, he said. An economic forecast update released Jan. 16 projected a decrease of up to $600 million, a number that seems to be headed higher on Friday.

Callers, who included Mayor John Stromberg, Southern Oregon University President Mary Cullinan and school board member Keith Massie, listened intently for clues to their future.

Education dominated much of the conversation.

"The huge elephant in the room is the K-12 budget," Buckley said, adding that it makes up more than 40 percent of the current state budget.

Despite a push from school districts to distribute the educational stability fund, legislators are hoping to keep those funds in reserve in anticipation of even worse problems down the road.

Superintendent Juli Di Chiro lobbied in Salem over the weekend with other superintendents to use some of the federal stimulus funds distributed to Oregon on education. The state will receive between $350 and $400 million of the $787 billion package passed on Tuesday, Buckley said.

Di Chiro was traveling to San Francisco today to learn about the impact of those federal funds on local school districts at the National Conference on Education hosted by the American Association of School Administrators, said Massie, who attended in her place.

Massie asked when the school district might know exactly how large the budget cuts for this year will be, and Buckley promised they would know by next Friday, Feb. 27. Di Chiro will likely know earlier because she in close contact with Salem, Buckley said.

"I'd say the worst case scenario is a $100 million cut for K-12," he said. "That still would put Ashland in a difficult position."

Bates said ending school four or five days early this year was not the worst scenario he could imagine.

"I think that's a pretty good deal and I think most people would agree with that," he said.

Mary Cullinan, who also made a trip to Salem on Monday, asked about Senate Bill 442, which proposes a study of making smaller universities such as SOU into branch campuses of larger Oregon universities.

"We want Southern, Eastern and OIT held as harmless as possible," Buckley reassured her and promised follow-up action by the Chancellor's office.

"I hope so," she said.

Callers also discussed health care funding, greenhouse gas emission caps and federal stimulus funds that might be available on the local level. Oregon could compete for grants for alternative energy capital construction and transportation projects, Buckley said. Cities and counties can also apply for grants, he said in response to a question from John Stromberg.

The federal stimulus package will be a lifesaver for Oregon, both Bates and Buckley said.

"If we did not have this federal money — as bluntly as I can say it — it would be a disaster for our state," Buckley said. "We would be closing prisons this spring if we didn't get this money."

The entire conversation will be available on the chamber's Web site, www.ashlandchamber.com, this afternoon. The chamber has hosted the call-ins for 25 years and just began posting recordings of the calls to its Web site this year, said Dana Fortmiller, projects and special events coordinator at the chamber.

"Not everyone can come at 7:30 in the morning, and it's a really good way to enhance the community's involvement in the political process," she said.

Staff writer Julie French can be reached at 482-3456 ext. 227 or jfrench@dailytidings.com.