July 26, 2005

Oregon lawmakers agree on $12.4 bln, 2-yr budget

By Teresa Carson

PORTLAND, Ore. (Reuters) - Oregon state legislators
hammered out a tentative $12.4 billion, two-year budget
agreement on Tuesday after weeks of negotiations, but a $100
million transportation package pushed by the governor did not
make it into the spending plan.

"This agreement will bring the session to a successful
conclusion," Oregon Senate President Peter Courtney, a
Democrat, said in a statement.

Legislative committees began taking up the state's 24
agency budgets on Tuesday and the full legislature could vote
on the budget as early as next week, officials said.

The major sticking point in budget negotiations had been
how much to allocate for primary and secondary public schools,
which account for nearly half the state's spending.

The Democratic-controlled Senate wanted more money for
schools than the Republican-dominated House of Representatives.

The two chambers finally settled on $5.24 billion for the
fiscal 2006-07 biennium. Coalition for Schools, a statewide
school funding advocacy group, called the number "bad news,"
despite the fact that it was touted as an 8 percent increase
for schools.

Portland Public Schools, the state's largest district with
about 47,000 students, has already begun eliminating the
equivalent of 325 of its 3,352 teaching positions over the next
two years because of rising salary and benefit costs for
teachers and increasing expenses such as insurance and fuel.

Meanwhile, a transportation package pushed by Democratic
Gov. Ted Kulongoski dubbed "ConnectOregon" did not get included
in the budget agreement.

But Oregon state Sen. Kurt Schrader, chairman of the Senate
Ways and Means Committee, said there was still a good chance
lawmakers may approve the plan.

ConnectOregon was to have funded air, rail, port and mass
transit projects with $100 million in lottery-backed bonds.
Kulongoski spokeswoman Holly Armstrong said the governor was
"still hopeful that something will happen."

The budget agreement also pushes back the opening of a $191
million, 2,104 bed prison in Madras, Oregon, for nine months
until September 2007.

The prison is being funded by certificates of
participation, some of which have already been issued. The next
certificates are scheduled to be offered in October, said Greg
Jeffrey, finance manager for the state's administrative
services department.

Oregon's fiscal biennium began July 1 and the legislature
had to pass two monthly emergency spending plans to keep the
government running while they dickered over the budget.