Special session has lawmakers scrambling to find $715 million

SALEM Ñ The Oregon Legislature convenes in special session today with little consensus on how to plug an estimated $715 million hole in the state's 2001-2003 spending plan.

In an election year clouded by the uncertain impact of redistricting on re-election hopes, lawmakers are tied in knots over how to balance the $12.3 billion budget with a minimum of political fallout.

Many threatening clouds loom over the uncertain special session. Lawmakers don't know how long they'll be in Salem, how many issues they'll address and how much acrimony and angst will be needed for them to do what the law requires them to do: Balance the budget.

Call it the fear factor.

The Republican majority is adamant in its opposition to any new taxes, insisting the budget can be balanced with cuts and diverting other revenues to shore up the general fund.

A frustrated Gov. John Kitzhaber wants lawmakers to increase cigarette and beer and wine taxes and auto registration fees while delaying implementation of a higher federal deduction on state income taxes.

'The Republicans are locking up,' observed Rep. Carl Wilson, R-Grants Pass, co-chairman of the Joint Economic Stimulus and Public Policy Committee. He said the GOP majority may pass its budget balancing plan, send it to the governor, go home and see what happens.

The Republican proposal includes raiding the Common School Fund Ñ a trust account that distributes money generated by timber sales through the counties for schools Ñ and delaying some or all of the May quarterly payment to schools until the next biennium.

Kitzhaber says he will veto any plan adopting either approach.

A bipartisan plan crafted late last month by five influential legislators, a so-called 'Gang of Five,' also appears to have fallen apart. The gang includes the co-chairmen of the Ways and Means Committee, Sen. Lenn Hannon, R-Ashland, and Rep. Ben Westlund, R-Bend; Sen. Peter Courtney, D-Salem; Rep. Susan Morgan, R-Myrtle Creek; and Rep. Kurt Schrader, D-Canby.

Senate Minority Leader Kate Brown, D-Portland, and Rep. Deborah Kafoury, D-Portland, newly elected House minority leader, said there were not enough votes in either caucus for the Gang of Five plan.

The Democratic leadership then presented its own proposal, including support for a 50-cents-a-pack increase in cigarette taxes.

Senate President Gene Derfler, R-Salem, said: 'They've blown up the whole session.'

The Gang of Five planned to meet up until the start of the session in an effort to find common ground between the governor and legislative factions. It hopes to broker a plan that will satisfy all sides.

Although massive roadblocks remain, anything can happen once the 60 House members and 30 state senators convene in the Capitol, where compromise is more likely to occur, particularly if the session drags on without resolution.

Several bills have been prepared that don't relate to the deficit. They include issuing lottery bonds despite litigation challenging the lottery; a $600 million bonding program for road and bridge projects, despite Kitzhaber's threat of a veto unless the Legislature increases auto registration fees to cover debt service; and referral of a term limits measure to voters to thwart an expected initiative.

The Oregon Supreme Court recently overturned the term limits law passed by voters in 1992 because it involved more than one subject.

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