Oregon Public Broadcasting

State agencies in Oregon have two weeks...two weeks to come up with a plan to slice nine percent from their budgets.

Democratic Governor Ted Kulongoski ordered the action Tuesday in response to a new economic forecast. It shows a dramatic and unexpected plunge in the state's revenues. Salem Correspondent Chris Lehman reports.

It's generally not a good sign when the presentation on the budget starts off this way:

Josh Harwood: "We're going to rip the band-aid off fast here."

State economist Josh Harwood then unveiled a series of numbers that Senate Revenue Committee Chair Ginny Burdick called "sobering."

In short, weaker-than-expected income tax collections have ripped a half-billion dollar hole in the current spending plan.

With just over a year left in the budget cycle, it means state government has to shift down a gear. Governor Ted Kulongoski isn't wasting time.

Ted Kulongoski: "This decline is significant."

The Democrat is calling for across-the-board cuts to offset the shortfall. The governor can't make targeted cuts. Only the legislature has that power.

Ted Kulongoski: "I could call the legislature into special session to rebalance the budget but that is an uncertain process with no guarantee of success and the unfortunate potential for partisan gridlock in an election year."

Lawmaker reaction to the governor's move was mixed.

Senate Republican Leader Ted Ferrioli called the governor's actions heavy-handed. He thinks lawmakers should have the final say in budget cuts.

Democratic House Speaker Dave Hunt said he's open to a special session but not right away.

Senate President, Democrat Peter Courtney says he thinks the governor made the right move.

Peter Courtney: "There's nothing more difficult than the hell of a budget special session."

Still, Courtney's worried what across-the-board cuts mean for state agencies that he says have little wiggle-room in their budget as it is.

The Department of Corrections, for instance, told lawmakers last year that even a five percent cut to its budget would mean closing some state prisons. Courtney says that's no solution.

Peter Courtney: "I feel that I am being totally tortured to death right now, trying to figure that monster out, because you cannot release dangerous people to the streets. One of the core functions of government is public safety. You cannot do that."

A spokeswoman for the Department of Corrections says specific cuts in response to the governor's directive are still being determined.

Courtney's comments reflected a shocked mood in the capitol. Lawmakers thought they had the budget under control after voters approved a pair of tax increases in January.