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Salem budget talks inch ahead.

Byline: DAVID STEVES The Register-Guard

SALEM - State lawmakers spent their first day in a budget-balancing special session Wednesday trying to get out of the starting blocks.

By early evening, a Senate committee had taken action on a single component of a package meant to close an $880 million budget shortfall. It approved a bill that would save money in the current two-year budget cycle by delaying a $200 million state payment to schools until after the next cycle begins.

Meanwhile, a House panel held hearings but didn't vote on proposals to raise $109 million through a 75 cents-per-pack increase in the cigarette tax and creating a rainy-day fund for education that would put $150 million in school budgets next year. Both House measures would appear on a September ballot for statewide approval.

Despite these tentative steps, legislative leaders conceded that they still hadn't secured the necessary votes in the Republican-controlled House and Senate to pass a package of program cuts, one-time money from different funds and a pair of tax increases.

"There are several tough votes," House Speaker Mark Simmons, R-Elgin, acknowledged. Those are on the cigarette tax increase and a bill that would erase a $124 million tax break for businesses by preventing them from accelerating deductions they receive for depreciation of property and equipment.

Legislative Republicans successfully resisted tax increases in the two earlier special sessions in February and March when the state faced an $845 million budget gap. This time, Republicans are divided on the tax issue, with Simmons and some GOP members advocating the tax increases and others clinging to their no-new-taxes pledge.

The assembly's minority Democrats have expressed willingness to provide votes to pass the two tax bills - but not for program cuts.

Republican leaders have called for budget cuts totaling $91 million, but haven't settled on a list of program reductions.

Senate Democratic Leader Kate Brown of Portland and other Democrats said they weren't inclined to help Republicans pass reductions, which would come on top of about $450 million in cuts that passed earlier this year with bipartisan support in the Senate.

Citing campaign pledges by Republican candidates to hold the line against taxes and to go after wasteful government spending, Brown said she wondered how they would deal with the current shortfall.

"Now they've got an opportunity to take a $90 million cut in the size of government," she said. "I'd like to see them put their money where their mouths are."

Brown's House counterpart, Democratic Leader Deborah Kafoury of Portland, said she, too, was waiting to see if majority Republicans were capable of uniting around a plan of their own to close the gap.

"If they have the votes to pass their plan in their caucus, then there's not a lot we can do," she said.

Although Republicans hold 32 of the House's 60 seats, they may be unable to pass bills along party lines - even if they agree on things. One member, Rep. Cheryl Walker, R-Murphy, is vacationing in Europe, a second, Rep. Greg Smith, R-Heppner, was absent because of prior commitments in his district, and a third, Rep. Bill Garrard, R-Klamath Falls, was in Las Vegas after undergoing surgery.

That left House Republicans with only 29 members at the Capitol. Walker is expected to be gone for an extended period, but Smith is expected back today. It's unclear if Garrard can return to Salem, Simmons said.

Meanwhile, Gov. John Kitzhaber, who publicly sparred with Republicans in the two previous special sessions, is keeping a low profile this time. He has called for a solution that includes a three-year boost in income taxes, but stayed out of the fray during the special session's first day.

Asked about the session's limited progress so far, Kitzhaber said he's told legislators he's unwilling to go along with "securitizing" Oregon's future shares of a national tobacco settlement by selling them up front to investors for 60 cents on the dollar.

"Outside of that, I'm very open and have drawn actually no lines in the sand," he said. "I just want the Legislature to reach a consensus and deliver the bills to my desk."

The special session got under way at 9 a.m. as two busloads of students, educators and parents from a pair of schools in the Polk County town of Rickreall spent their last day of the school year rallying on the Capitol steps.

Students chanted "save our schools" and waved handmade placards during the rally.

Peggy Holstedt, a district administrator and part-time principal at Rickreall Elementary, said she could attest personally that budget cuts were real and that her district's ability to educate children would be badly compromised if lawmakers force it to absorb more reductions.

"To be honest, my job was the first to be cut because it's important to save teachers' jobs and keep classrooms," she said.



The House meets at 11 a.m.

The Senate meets at 1 p.m.



Associated Press Sisters McKenzie and Brylie Dalke (from left) and Katy Hilker protest cuts in the state's education budget in Salem on Wednesday.
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Title Annotation:Senate panel passes bill to delay money to schools, but not much else gets done.; Legislature
Publication:The Register-Guard (Eugene, OR)
Date:Jun 13, 2002
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