Hard-hit Oregon, Washington draw in state purse strings

Legislators in the states of Oregon and Washington are busy over the holidays preparing for January sessions expected to be fiscally painful. Because of an economic pinch inflicted by the Pacific Northwest sag in timber and lumber sales - a direct result of the depressed home construction market -- the two states are suffering critical budget problems.

Oregon is the harder hit of the two states because it is the larger producer of lumber and does not have such giant industrial complexes as Washington's Boeing Company in Seattle.

The Washington Legislature concluded a 24-day emergency special session on Dec. 2 after trimming the state budget by about $300 million and approving an increase from 4.5 to 5.5 percent in the state sales tax. The tax boost is expected to raise an additional $530 million in the current (1981-83) biennial budget.

The legislators are planning to return to Olympia in January to finish the job of balancing a projected million-dollar budget defict by more trimming of expenditures and perhaps voting additional taxes. In Oregon, Gov. Victor Atiyeh has called a special session of the Legislature to convene in Salem Jan. 11 for the purpose of erasing a $250 million deficit projected for the state's 1981-83 biennial budget.

Governor Atiyeh has asked all state agencies to furnish him information on the possible impact of a 20 percent reduction in expenditures. Meanwhile, there is talk of a sales tax in Oregon, despite the record of decisive public rejection of such proposals in the past. There is also the possibility of a temporary (one year) increase in the state income tax.

While Washington has historically relied on a sales tax as its principal means for support of state services, Oregon has depended on the income tax.

In both states there are well-founded apprehensions that failure to approve additional revenue measures in January will result in serious cutbacks of state programs.

In Oregon, Chancellor Roy Lieuallen of the State System of Higher Education has warned state officials that the threatened 20 percent reduction in appropriations to the system could mean loss of all accomplishments in Oregon higher education over the past five years. There also are serious concerns about the future of Oregon property tax relief, environmental programs, and state support for public primary and secondary schools.

cl11 In Washington, Gov. John Spellman was by no means satisfied with the results of a recent special session of the Legislature. At one point he threatened to keep the lawmakers in session until they balanced the budget. But he finally decided to accept the immediate sales tax hike, which he considered essential to the public education system, and let the weary legislators come back in January for another try.

The sales tax hike got an unsurprisingly hostile reception among consumers. Many Washington consumers, particularly in the Vancouver area across the Columbia River from Portland and in eastern Washington, made plans to do their Christmas shopping in sales tax-free Oregon.