Oregon officials face a daunting challenges as they prepare for negotiations over the 1993-95 budget, which begins next July 1. Lying ahead in the next budget cycle is a shortfall estimated ad $1 billion or more, a gap that stems from Measure 5 and its requirement that the state pay the public school system for funds lost as a result of the 1990 ballot initiative's reduction of property tax revenues.

Late last month, Gov. Barbara Roberts called for a special session of the Legislative Assembly to consider her proposals for restructuring taxes. The plan included property tax relief and the state's first-ever sales tax. But lawmakers, in a brief session the first week of July, declined to refer the tax plan to voters for a September election. Legislators are not united on potential solutions, but they are considering ideas such as a temporary tax surcharge, combined with cuts, to pare the shortfall.

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