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Revenue projection will reduce budget By Dani Dodge Thursday�s bleak economic forecast is forcing state legislators to consider further cuts to the state�s already bloodied budget. But leading lawmakers are trying to take it on the chin. "It�s not anything to despair over," said Sen. Lenn Hannon, "but it�s certainly nothing to celebrate about. "At this point, it�s important to keep your powder dry." Budget forecasters on Thursday reduced their state revenue projections by $106 million for the two-year budget period that begins July 1. Tom Potiowsky, chief state economist, said the chances of a recession "are very close to 50-50." Hannon said he and the other co-chair of the Senate Ways and Means Committee will meet with Gov. John Kitzhaber early next week to discuss what cuts might be needed to balance the 2001-03 $12 billion general fund budget. "It certainly means a reconfiguration of budget priorities," said Hannon, R-Ashland. "The public can�t help but feel the pain of it � that�s the net of reducing any budget." Lawmakers will get one more forecast in mid-May before final budget decisions have to be made, noted Rep. Rob Patridge, R-Medford. Still, Patridge said this may spell out doom for the governor�s $32 million program to screen newborns for physical or social risks. The Governor had cut some programs for seniors and teens to fund the newborn program. "You can�t just shift everything to early childhood and throw everything else out," Patridge said. "It doesn�t work like that. We will continue to look at senior programs and try to fill them." Rep. Alan Bates, a Democrat from Eagle Point, said budget forecasts are highlighting the state�s need to broaden its tax base. The current state tax base relies heavily on income tax and lottery funds, he noted. Since the passage of Measure 5 limited property taxes, the state has gone from 25th in the nation for per capita taxes to 44th or 45th. "If we broadened the tax base, we wouldn�t be subject to ups and downs, and every time the economy hiccups we�re down again," he said. Bates said a sales tax is unlikely. "Looking at a sales tax is liking touching the third rail: you are fried immediately," he said. But Bates did say lawmakers may look at ways to change the structure of corporate taxes to stabilize the state�s funding picture. Despite the disheartening outlook, the forecast also calls for Oregonians to get $336 million in automatic tax refunds this fall under the state�s so-called kicker law. Under the forecast, refunds would average $137 for people with a yearly income between $30,000 and $40,000, and $209 for incomes between $40,000 and $60,000. The law allows the Legislature to suspend the refunds by a two-thirds vote, but there�s little support for that, lawmakers say. Hannon said although many legislators were "whining �The sky is falling, the sky is falling� " at the Capitol on Thursday, the state will survive this latest blip. Unlike Hannon, most of the legislators at the Capitol haven�t had to deal with a previous economic downturn. And this one isn�t anything like the recession in the early 1980s. "In the 1980s we cut through the skin of the budget, we cut through to the muscle, and got down into the bone. We stopped short of getting to the marrow," Hannon said. "This time we might scratch the skin, but I think a Band-Aid is certainly going to be able to stop the bleeding." Reach reporter Dani Dodge at 776-4471, or e-mail [email protected] . AP contributed to this story. Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.