State session's last chore: Budget repair

SALEM — Majority Democrats laid out plans Thursday to patch the state's budget, the last big chore facing Oregon lawmakers before they can end their February session.

The patching is a result of the state's weak economy and iffy revenue forecasts. It's also a sign that more budget problems could lie ahead.

The plan announced Thursday would guarantee $6 billion in elementary and secondary school aid, the largest single component of state spending.

School money is a bipartisan favorite, as well as a boon to an important Democratic constituency, organized teachers.

The Legislature is scheduled to adjourn next week, and the budget bills will hit the floor after Monday.

Among other elements of the plan:

  • Braking what legislators say is a runaway program of tax subsidies for wind energy.
  • Relying on greater-than-expected revenues from a tax amnesty and tobacco taxes.
  • Trimming requests for extra money for college grants and day care subsidies for low-income workers programs where demand for help has outstripped budget allocations.
  • Making dozens of small cuts — the budgetary equivalent of turning over sofa cushions — and small additions, such as $225,000 to combat an invasion of fruit flies lawmakers have been told are a threat to soft fruits such as berries.
  • Shrinking reserves and emergency funds for what could be a bumpy ride in the remaining 16 months of a two-year budget.

In all, general revenues have come up short more than 2 percent since the Legislature adjourned last year, a time when the state has seen unemployment rise into double digits and stay there.

Five more revenue forecasts are due before the end of the budget period in 2011, providing ample opportunity for further erosion. So, legislators have reason to bite their nails about the budget.

"It's balanced on a thin line," said Rep. Peter Buckley of Ashland, the co-chair of the Ways and Means Committee.

The current budget relies on two new sources of revenue: federal stimulus dollars and higher taxes on the wealthy and businesses.

Oregon voters affirmed the taxes last month. Buckley said that allowed Oregon to avoid the fate of states across the nation that are "slashing services, kicking people off of health care plans and making huge disinvestments in their future."

By contrast, the fate of further federal aid is an open question. The bipartisan worry among lawmakers meeting in Salem is that when the Legislature meets next winter it will have to find a way to make up for nearly $1 billion in one-time stimulus money.

"We're sweating rocks," said Senate President Courtney, the other co-chair of the budget panel.

Republicans in the Legislature, outnumbered 3-2, have little say over the plans so long as the Democrats hang together.

House Republican Leader Bruce Hanna said Thursday he finds it ironic that the plan relies on scooping up "other funds" money that his party has long maintained was available for use instead of raising taxes. He said he's expecting revenue forecasts to weaken, as well.

On the Senate side, Republican Leader Ted Ferrioli said using that money "is the way for Democrats to continue spending beyond their means."

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