Oregon Public Broadcasting

Call it a small victory.  The latest Oregon revenue forecast, released Friday morning, shows the state’s budget hole won’t be as large as lawmakers had feared.

But the gap is still much wider than it was just a few months ago.  That means lawmakers need to plug a $4.2 billion hole before they adjourn.  

State economist Tom Potiowsky says that while the economy has stopped its dramatic freefall, the state might not begin to recover until next year:

Potiowsky: "Once you’re on the bottom, even though you’re starting to come off the bottom, it’s still not a pleasant place to be. And there’s still this pain and sorrow, in essence, until you start to get into 2010."

Lawmakers plan to shore up the budget with federal stimulus money and by tapping into the state’s reserves.

Majority Democrats also say they’ll increase taxes on corporations and the wealthy.