Oregon gov says painful spending cuts now inevitable

SALEM, Ore. – Oregon Gov. Ted Kulongoski directed state agencies Wednesday to seek ways to protect vital services after voters rejected an $800 million tax increase, but said painful spending cuts are inevitable.

“There will be loss of essential programs,” including lopping about 50,000 low-income people from the state health plan, he said.

“There will be drastic consequences to some citizens,” the Democrat said.

The proposed tax hike failed 59 percent to 41 percent. Rejection automatically triggers $544 million in spending cuts on May 1.

It was the second time in a little more than a year that voters have turned down a tax hike passed by the Legislature to balance the budget.

The state has been in budget turmoil for more than two years as recession eroded tax revenues. The state already has cut $1 billion in spending, hitting school districts, programs for the needy and law enforcement particularly hard.

The Legislature narrowly passed the latest tax package last August in a bid to balance the state budget without inflicting even more pain on crucial programs.

It is not yet clear exactly what will be cut May 1. State government has some leeway in how the $544 million in cuts can be implemented.

Kulongoski said he wants to protect health care and law enforcement programs in some measure. For example, he said, none of the cuts will cause serious felons to be released.

“I will not let hardened criminals out of the pentitentary before their time” has been served, he said.

The governor said he has ordered agencies to “absorb the cuts to the greatest extent possible without affecting programs.”

He repeated that he’s “not inclined” to call lawmakers into special session to reshape the budget, and legislative leaders say they’re inclined to let Kulongoski handle the problem.

Kulongoski said he will ask the Legislative Emergency Board, which handles budget matters between legislative sessions, to dip into its nearly $40 million in emergency funds to protect some programs, including the state police crime labs that process evidence for all police agencies in the state.

Officials say the automatic cuts in that program would force layoffs of 60 of the labs’ 107 employees.

Kulongoski said his other priorities include preserving health care coverage for children, pregnant women and seniors, continuing gambling addiction treatment and keeping regional detention centers for juveniles open.

The governor said he wasn’t startled by the voters’ decision.

“Given the state of the economy, the fact that the majority decided not to take on more tax burden isn’t surprising,” Kulongoski said.

Oregonians have been historically opposed to tax increases. That tradition, plus an economy still struggling to shake off the effects of recession, seems to have doomed the proposed tax hike.

Political analyst Jim Moore said the vote showed that Oregonians weren’t swayed by warnings that schools and other services would suffer big cuts without the tax increase.

“People are suspicious of government, and they simply weren’t buying the doom and gloom thing,” Moore said.

On the Net:

Citizens for a Sound Economy: http://www.cse.org/oregon/index.php

Measure supporters: http://www.ouroregoncoalition.org/