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State poised to slice fiscal pie

Whether Oregon has a budget shortfall or just can't meet its recent hike in expenditures all boils down to the same thing -- huge spending cuts.

That was the message delivered on Jan. 16 by Sen. Rick Metsger, D-Welches, who held a town hall meeting in Hood River to gather citizen cures for the state's ailing economy.

"I believe at the end of the day the Legislature is going to be making great cuts," said Metsger, cochair of the Senate Economic and Job Stimulus Committee.

In February Senate and House members will convene in a special session to address a $830 million deficit in the state's 2001-2003 budget. Metsger said Oregon's already troubled economy "dropped off the cliff" following the Sept. 11 terrorist attacks on the East Coast, which made the government unable to meet its $34 billion biennium budget. That budget is about 15 percent higher than the 1999-2000 total of $29.5 billion.

Metsger said the current increase was deemed necessary to fund rising operational and program costs. However, since the anticipated revenue has dropped off dramatically, he said Gov. John Kitzhaber has asked all state agencies to prepare for cuts of up to 10 percent. He said a number of proposed fee increases have also been placed on the table for discussion. These include:

* a 10-cent markup up on cigarettes that is expected to raise an annual $23 million.

* the addition of lottery slot machines that will generate $30 million yearly

* allowing liquor stores to remain open on Sunday and holidays which is expected to add $20 million to state coffers.

Metsger said because of the current "political climate" among Oregon taxpayers, he did not think it likely that a recommendation by some legislators to add a gasoline tax or a two percent surtax on personal and corporate income would be enacted.

He admitted that Oregon was ranked as the eight largest spending state in the nation by the 1999 U.S. Census Bureau. But he said it had also been distinguished by Oregon Tax Research as 46th for fees charged to its citizens. Metsger said state officials were continually seeking ways to streamline operations -- especially now that Oregon holds the top place in the nation for unemployment.

Since early December, Metsger has been meeting with top local and state leaders and business experts to seek out both short-term and long-term solutions to stabilize Oregon's economic base.

However, while these strategies are being worked out, he said the state constitution mandated that the current budget be balanced -- which necessitated cuts to education, human services and public safety programs that make up 90 percent of the existing state budget.

About 25 people attended the Jan. 16 forum in Hood River and the majority, through a hand poll, agreed with Metsger that kindergarten through 12th grade education and elderly care for low-income citizens should be spared from any cuts.

Hood River School Superintendent Jerry Session said 40 teaching or classified positions and some programs could be eliminated if the Legislature follows through on a proposal to cut $2.2 million from the local district over the next biennium.

"These aren't normal times but we don't want to cut programs where it will do severe damage that can't be turned around," said Metsger.

During the Hood River forum, Metsger heard again a "common theme" that has been expressed throughout a recent series of meetings statewide -- streamline regulations to make Oregon more "business friendly." He agreed with an audience suggestion that once the initial budget crisis was dealt with, the Legislature needed to take a hard look at establishing a "rainy day" fund. He said serious consideration also needed to be given toward replacing the current income tax with a sales tax that would tap a huge revenue stream from tourists and Washington "border" residents.

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