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Governor to outline his plans for state.

Byline: David Steves The Register-Guard

CORRECTION(Ran Mar. 22, 2008): A story on Page A1 Friday about Gov. Ted Kulongoski's State of the State address did not accurately describe his proposed Oregon GI Bill. The proposal would cover at least $500 a month for full-time students and $250 a month for part-time students.

SALEM - Gov. Ted Kulongoski will outline proposals to raise the cigarette and corporate income taxes today in a state of the state speech that highlights what his aides are billing as a "swinging for the fences" agenda for the final three years of his governorship.

With presidential contender Barack Obama's three-city tour through Oregon today likely to eclipse media coverage of what is traditionally the governor's most significant speech of the year, Kulongoski's chief of staff, Chip Terhune sat down Thursday to describe the highlights of Kulongoski's state of the state address.

Kulongoski is spending much of 2008 preparing for what will be his final regular legislative session, in 2009, before term limits require him to step down.

Terhune said the governor is working months ahead of then to lay the groundwork for action on issues he considers most critical.

"He's going to be swinging for the fences," Terhune said. "He's really determined to go out fighting for what he thinks is right."

That would include taking care of National Guardsmen returning from Iraq and Afghanistan, continuing to improve education from pre-kindergarten through university levels - both with academic, tuition and building needs - developing a transportation system that can bear the needs of the next 30 years, working to limit the effects of climate change and deal with its impact on Oregon's water supply, and putting more money aside for a rainy day.

Terhune said the governor is not going against the grain by proposing a "fairly comprehensive agenda" when the country is entering a recession and many state governments are in retreat - cutting social services, safety and education programs or looking to tax increases to make up for plunging revenues.

The governor has undertaken administrative steps - such as ordering state agencies to recommend possible reductions in case state government's income-tax revenue continues to drop.

But the nature of the nation's economic downturn is not wreaking havoc with Oregon's employment numbers or state revenue as it has in other states, Terhune said. So rather than retreat, Kulongoski will make the case today that "we have to be bold."

Among the boldest proposals in Kulongoski's speech is one that would revive his "Healthy Kids Plan," including a cigarette tax to pay for uninsured children's medical coverage.

Last year, his plan, including an 84.5 cents-per-pack tax increase, was put on the ballot by the Legislature as a constitutional amendment. The tobacco industry pumped a record-smashing $12 million into its successful effort to defeat the tax.

This time, Terhune said, Kulongoski will propose that about half the state's 116,000 uninsured children receive coverage through the state general fund, and the rest be covered through the tobacco tax - which would be at some as-yet-unspecified amount that would be lower than the amount voters rejected last November when they defeated Measure 50.

Kulongoski's other tax proposal also would revive an idea he pushed unsuccessfully in 2007 as a way to pump more money into Oregon's rainy-day fund for government programs: It would raise the minimum income tax imposed on corporations.

That tax has stood at $10 a year since 1931.

Kulongoski wants the new minimum tax to vary based on a company's size and sales in Oregon. The proposal hasn't been fully fleshed out, but the 2007 version, which failed to win sufficient support in the Legislature, would be a starting point.

That version would have imposed new taxes of at least $25 and up to $5,000, depending on the company's size and in-state sales.

Terhune said such a move, which would generate an additional $42 million a year, "is absolutely essential for Oregon's fiscal health."

Other proposals expected to surface in the governor's state of the state speech include:

Oregon G.I. Bill: Provide a stipend to returning Oregon National Guard soldiers from service in Iraq or Afghanistan now attending college. On top of other tuition coverage for such students, the stipend would cover up to $500 a month in expenses such as books, room and board.

College Aid: Add state money to the "Shared Responsibility" program so that all eligible students can get state "opportunity grants" to attend a public college or university.

Climate Change: Take steps such as tax incentives to encourage the purchase of low-emission vehicles such as those running on electricity.

Kulongoski also wants to pursue a "cap and trade" program to reduce industrial carbon emissions that contribute to global warming.

The governor also wants to revive the auto emission standards previously adopted by the state but struck down by the Bush administration.

And given the prospects for reduced spring runoff because of a warming planet, Kulongoski wants to expand water-storage capacity for irrigation and public drinking water.
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Title Annotation:Government; Proposals for Kulongoski's final three years in office will come in the speech
Publication:The Register-Guard (Eugene, OR)
Date:Mar 21, 2008
Words:833
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