Tax foe claims governor finds big budget savings

The leading opponent of the income tax increase on Tuesday’s ballot claims Gov. Ted Kulongoski has found $500 million in the current budget to save state programs if the tax measure fails.

Russ Walker, Oregon director of Citizens for a Sound Economy, said he doesn’t have hard evidence to prove the money exists, but he told KXL, a Portland radio station, that a source in the Legislature gave him the information. He did not name the source.

Kulongoski spokeswoman Mary Ellen Glynn said there’s no such extra money in the budget.

“We don’t have a secret slush fund of $500 million. There aren’t pots of cash sitting around,” she said.

“We are doing what we can to defuse some of these cuts if we can,” Glynn said. “There might be some administrative actions we can take to switch some money around.”

But she said finding $500 million “is pie in the sky.”

The tax measure, mostly income tax boosts, would raise $800 million to balance the $11.7 billion two-year state budget. Defeat of the measure would automatically trigger $544 million in budget cuts.

Walker’s group led the effort to send to the voters the tax measure passed by the Legislature last summer.

“We want to make it clear to voters that there are going to be some budget cuts if Measure 30 fails,” Glynn said.

Kulongoski is considering administrative steps to reduce the impact of cuts on people, she said, but not calling lawmakers into special session to revise the budget.

“If there is anything the governor can do about it, he will do so,” Glynn said.

Options might include a reshuffle of the Human Services Department budget to ease health plan cuts, she said.

Failure of the tax measure would trigger an automatic $182 million reduction in the plan that provides coverage for low-income people.

Human Services Director Jean Thorne has proposed that about $28 million in savings in separate programs for the elderly and disabled be shifted to avert the “most severe reductions” in health plan services.

The recommendation was in a Jan. 9 letter to state budget officials outlining the agency’s plans for dealing with spending reductions if the tax increase fails.

“We are going over and over the budgets and looking at everything to make sure that the governor has done everything in his power to help some of the people who are served by the Oregon Health Plan,” Glynn said.

“You can’t get around the fact that when you cut this much from the budget, you are going to cause real pain to people,” she said.

Because caseloads for social services can be hard to predict, the budget for the department regularly is readjusted by the Legislative Emergency Board by transferring funds among programs.

The board handles budget matters between legislative sessions.

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