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49 °F Forecast | Road Cams Saturday, October 9, 2004 Today's News | Classifieds | Autos | Homes | Jobs | Tempo | Health | Community | Home Delivery SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics Tempo AP News Weather Classified Archives Site Map SPECIAL SECTIONS Since We Asked Outdoor Journal Menu Guide How To Guide Wellness Connection Readers' Choice Real Estate Showcase Joy Magazine Homelife Magazine Wedding Guide Rogue Valley's Finest EXTRA Newspaper in Education Personals Movie Times TV Times E The People MARKETPLACE Find a Car Find a Home Find a Job Classifieds Place an ad eSouthernOregon Automotive Communities Entertainment Publications Recreation Calendar CUSTOMER SERVICE Frequent Questions Advertising Information Home Delivery Employment Contact Us Media Kit Network Affiliate Oregon Road Conditions & Cams Email Story to a Friend September 23, 2004 Tough session looms for legislators Projected shortfall, other problems mean Oregon lawmakers will have their work cut out for them By DAMIAN MANN Mail Tribune Legislators expect an uphill battle over next year’s budget, bracing for a shortfall of up to $600 million, a corporate "kicker" tax refund and an audit that could take to task the state Department of Human Services. "The Oregon Legislature is going to face a tough session," said Rep. Alan Bates, D-Ashland, who’s running for a Senate seat in November. The state anticipates sending corporations a $68 million refund because they paid more in taxes than the state projected for the current biennial budget. "Corporations get the money back, but individuals won’t get it," said Bates. But if the state loses a pending appeals court ruling, individuals could receive $113 million based on a claim that the state miscalculated its kicker refund in the 1999-2001 budget. Advertisement If the kicker money is returned, it will exacerbate the coming shortfall. Added to these problems, Bates said some preliminary findings from a state Department of Human Services audit reveal it could be top heavy with administrators. "That would mean the money’s not going down to the level where we need it," said Bates. The audit, being conducted by members of the business community, should be completed by the time the Legislature convenes in January. Rep. Dennis Richardson, R-Central Point, said there are also court cases pending over legislative reforms of the Public Employees Retirement System, which, if overturned, could add to the state’s money woes. "There are so many land mines that face us as we go toward a new session," said Richardson, who’s running for re-election. Although Richardson has expressed concern about the human services budget in the past, he doesn’t think the audit would fuel a reaction among conservative legislators to gut that agency. "It would be a shame if a slash-and-burn approach was taken to any aspect of the budget," he said. But he does think legislators need to strive harder to make the workings of government more transparent and less subject to criticism. The independent audit of human services is, he hopes, the beginning of many outside audits of agencies and departments that will eventually lead to a more streamlined state government. "North Dakota did that with their ODOT (Oregon Department of Transportation) and saved 20 percent of their budget," he said. "And they didn’t lay anybody off." Richardson said the Legislature also has to place caps on spending to limit the growth of government. Sen. Sal Esquivel, R-Medford, said he doesn’t think there will be a conservative reaction that would drastically cut government services if the audit reveals a top-heavy human services department. "I don’t think people would be that knee-jerk," said Esquivel, who is running for the District 5 House seat. "We don’t want to throw the baby out with the bath water." The revenue office estimates a shortfall of $400 million to $600 million based primarily on the use of one-time money to help balance the current biennial budget. The shortfall is also based on the assumption that government services would be maintained at current levels. As examples of one-time money sources, Paul Warner, state legislative revenue officer, cited $215 million in federal recession relief and $130 million taken from an education rainy day fund. That corporations may have overpaid in taxes shows a rebound in the economy, but Warner said state analysts are worried the resurgence might be short-lived. They do expect the revenue stream to return to normal by 2007, however. In general, the state’s economy is showing signs of recovery, said Warner. "The recession is over," he said. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2004 Mail Tribune. All rights reserved. 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