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Oregon Facing ‘Drastic’ Cuts, Governor Warns

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From Associated Press

Gov. Ted Kulongoski said Wednesday that 50,000 poor people would be dropped from the state’s health plan and that other “drastic consequences” lay ahead after voters rejected a tax increase.

The proposed $800-million tax increase was voted down Tuesday, 59% to 41%, automatically triggering $544 million in spending cuts.

“There will be loss of essential programs,” Kulongoski said. “There will be drastic consequences to some citizens.”

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The Democrat said he would ask a legislative panel to tap an emergency fund of about $40 million to protect police crime labs and some other services. Other priorities include preserving health coverage for children, pregnant women and seniors, and continued funding of detention centers for juveniles, he said.

However, the Oregon Health Plan, which extends health insurance to poor people and once was used as an example for the nation, will lose $182 million, meaning about 50,000 of the working poor will lose their coverage.

The state budget has been in turmoil for more than two years because of a downturn in high technology and manufacturing that has given Oregon one of the highest unemployment rates in the nation. Schools, programs for the poor and law enforcement have been hit by spending cuts of $1 billion.

In January 2003, Oregon voters rejected a $310-million income tax increase.

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