August is here and the 2003 Oregon Legislature remains in session. Already, the 2003 legislative session is the third longest in Oregon’s history and looking to become the longest.

Most committees were closed weeks ago, as legislators sought to focus exclusively on balancing the state budget. However, lawmakers have yet to reach consensus on how to fund K-12 education and other governmental programs.
With no new revenue, lawmakers expect to have $10.4 billion to spend, about the same as four years ago. The latest Republican proposal calls for total spending of $11.2 billion for 2003-2005, including $5.05 for K-12 schools. To reach that level of spending, Speaker of the House Karen Minnis proposes raising $1.16 billion in new revenue, including $460 million in tax increases.

Last week, Rep. Deborah Kafoury of Portland, the House Democratic leader, said her caucus was willing to work within the “parameters” of all the Republican budgets, except K-12 and Human Services. Democrats want to spend $250 million more than Republicans do on K-12 education and $50 million more on human services.

The $300 million difference between Republican and Democrat spending proposals has proven to be extremely divisive. The $300 million Democrats are seeking for education and human services would almost certainly come from tax increases beyond the $460 million in tax increases that Republicans have proposed.

The political climate in Salem has led legislators to consider a number of revenue generating proposals that would impact neighborhood storeowners. Unable to reach consensus on broad-based tax proposals that would generate revenue by taxing all Oregonians, lawmakers are looking to piece together a budget by eliminating tax breaks, raiding funds, and increasing taxes on beer, wine, and cigarettes.