Oregon Public Broadcasting

A bleak new report about Oregon's budget future is already shaping the debate between the two major candidates for governor.

Both John Kitzhaber and Chris Dudley say the current governor's effort to press the reset button on state government will play a significant role in their campaigns.

A blue ribbon panel appointed by Democratic Governor Ted Kulongoski reports that Oregon will be unable to continue providing services at current levels without major changes to state government.

The report predicts chronic deficits over the next decade even if the economy improves rapidly. After it was released, Republican gubernatorial nominee Chris Dudley told a GOP gathering that the dire predictions validate the concerns he's been raising on the campaign trail.

Chris Dudley: "The experience of the past 20 plus years of governors have left our economy weaker and our state's fiscal situation in an unsustainable mess. It is imperative that we go in a new direction."

Democratic nominee John Kitzhaber says the report outlines the daunting challenges the next governor will face. He says it underscores the need for policies he's recommending such as a more robust rainy day fund.