No matter what, state faces cash crunch

Measure 28 was meant to cover budget shortfall, which keeps growing

Even if Measure 28 passes, it won't be be enough to stanch the state's red ink.

True, passage of Measure 28 Ñ and recent polls show that could happen Ñ would mean smaller cuts than if it fails. But passage still wouldn't accomplish the very thing for which the measure was designed: balancing Oregon's 2001-03 budget.

Why? Because the state revenue forecast has fallen even further since September, when lawmakers put Measure 28 on the ballot. Back then, the measure provided enough money to make up the shortfall. Not anymore.

If you're confused about Measure 28 Ñ about where the cuts are coming from, when they would happen and why one program was cut while another was not Ñ join the club. In the last few months, local governments have been hit from several directions by a series of budget reductions, and officials have been befuddled in planning for the future.

Complicating the picture is the reality that the measure plays only a modest role in the state's revenue picture. It's a temporary fix, said Portland Mayor Vera Katz. If passed, it wouldn't repair all of Oregon's budget problems, lessening but not eliminating the need for more cuts.

'It's not a cure-all,' Katz said. 'It provides a safety net.'

The measure, a temporary boost in personal and corporate income taxes, would bring the state $313 million in the remaining five months of this biennium, restoring some of the cuts made in recent months because of dropping state revenue. It also provides $412 million for the 2003-05 budget.

When placed on the ballot in September, lawmakers saw that $313 million as a safe number that, if voters said yes, finally would bring fiscal balance to the 2001-03 budget. They met in a record five special sessions last year and turned the job of balancing the budget over to voters by placing Measure 28 on Tuesday's ballot.

But then came the December revenue forecast and more reductions. And now, even if it passes, the state still must cut another $112 million to balance the 2001-03 budget. That's on top of the reductions that will take place Feb. 1 if Measure 28 fails.

'I think people understand that Measure 28 is not a long-term solution but an important first step,' said Patty Wentz, spokeswoman for the Yes on 28 Committee.

Opponents, however, say that even if Measure 28 fails, the 2001-03 state budget still will be 5 percent higher than the 1999-01 budget. Government, said Jason Williams, lobbyist for the Taxpayers Association of Oregon, must live within its means. He said lawmakers have ignored savings that can be made in the Public Employee Retirement Fund, children's programs and state employment.

'It can be done without the horror stories,' Williams said. 'They're not doing any trimming from the increase they began with.'

Oregon schools, which get 70 percent of their money from the state, have been reducing budgets. School support dropped $375 million through the cuts imposed during the five special sessions in 2002. The December forecast means the schools are expecting a drop of another $46 million.

But some governments have found it hard to pin down exactly what will get cut and why, said Mike Schrunk, the Multnomah County district attorney.

'Everyone's confused,' he said. 'It's like peeling an onion. You have to keep asking, 'Whose money are we talking about?' '

House passes a hit list

Governments have seen revenue shrinking from several sources, including state forecasts, local government revenue, the state Emergency Board and the state Legislature, which has offered changing signals.

And right in the front seat of this fiscal roller coaster are public officials trying to figure out what's available to do their jobs.

Consider how Multnomah County has tried to keep up with the changes.

First, said Gina Mattioda, director of the county's public affairs office, each of the five special sessions meant reductions to the county budget.

Next came November cuts to the state Department of Human Services budget from the Emergency Board, which makes budget decisions when the Legislature isn't in session. The county has seen a larger drop in revenue than cities because counties administer numerous state programs for the mentally ill, the disabled and the elderly.

Then came the December forecast bearing the new $112 million shortfall.

'Each cut had an impact on everything, some more than others,' Mattioda said.

There's more uncertainty in the wind.

In September, when they put Measure 28 on the ballot, lawmakers passed with much difficulty House Bill 5100 Ñ the list of reductions that will take place Feb. 1 if Measure 28 fails. This week, however, a group of state lawmakers said it wants to reopen the HB 5100 cuts, hoping to use money earmarked for health and human service programs to shore up schools and law enforcement.

'It's a moving target,' Mattioda said. 'It's hard to qualify what the ramifications are. The list and the numbers continue to change.'

Cuts call for creativity

The judicial system has not been spared the swath of HB 5100. Chief Justice Wallace P. Carson Jr. impaneled a committee to study how to reduce court budgets and ordered all court operations in the state to shut down on Fridays if Measure 28 fails.

For Multnomah County, it would mean the loss of 55 courthouse jobs and a 10 percent pay cut and a four-day, 36-hour workweek for everyone else.

Schrunk has been through a similar process.

The district attorney's office lost four full-time positions, or about $366,000, in Multnomah County's 2002-03 budget, which began last July 1. The cuts weren't so bad, he said, because he had time to make adjustments. But a few months later, county revenue dropped, and he had to find another $1 million in savings. In all, he lost 13 attorneys and two on the support staff.

Jim Redden contributed to this story.