Oregon Public Broadcasting

Oregon lawmakers got more bad budget news Thursday. State economists told them revenues are expected to fall another $377 million. But majority Democrats say they have a plan to offset much of that drop-off.

The newest shortfall means that state revenues have dropped more than $1.2 billion dollars. That's since lawmakers crafted their two-year budget more than a year ago.

Earlier this summer Democratic Governor Ted Kulongoski brought the budget back into balance with across-the-board cuts. Now, legislative leaders say they'll work with the governor to reduce the impact of the latest drop in revenue.

Here's House Speaker Dave Hunt:

Dave Hunt: "You will see a definitive commitment that prisoners are not going to be released from Oregon prisons, as well as, there are not going to be additional school cuts to this biennium, beyond what school districts have already budgeted to based on the May revenue forecast."

Many school districts had to cut programs and shorten the school year following that revenue shortfall.

Democrats say they'll fill part of the new budget hole with federal money and by tapping the state's reserve funds.

Even so, agencies are preparing for another round of across-the-board cuts.