Kitzhaber counters legislative budget proposal

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PORTLAND, Ore. (AP) -- Gov. John Kitzhaber is pushing back against a legislative budget proposal that would close a prison and lay off hundreds of middle managers in state government.

Kitzhaber's office is asking the Legislature to consider other options, including cuts to school and university funding, spending down reserves or tapping the state's share of a $30 million settlement with mortgage lenders. Officials say he'd prefer spending reserves over cutting school funding.

Lawmakers are trying to rebalance the two-year state budget after a $340 million drop in anticipated tax revenue. As part of the solution, the chief legislative budget writers asked Kitzhaber's administration to come up with $25 million of savings from layoffs, primarily of middle managers. But the governor's office says cuts at that level would harm services.