Ryan Kost, Associated Press Writer

SALEM - Oregon House leaders expect they'll have to cut at least $1.5 billion from the state's budget to help close a gaping $4 billion deficit.

At that level, all areas of the public sector would be affected, but it would "not devastate vital services," said Rep. Peter Buckley, an Ashland Democrat who is one of two chief budget writers. "At that level our state could stay intact."

Lawmakers have said for months they'd use a combination of new taxes, cuts and stimulus funds to make up for a steep loss in tax revenue. However, said House Speaker Dave Hunt, "there are going to be far more cuts than there will be new" taxes.

At a press conference Thursday, Democrats gave a preview of their budget package, which they'll release in its entirety early next week.

They're waiting first to hear precisely how much money the state will have to work with over the next two years. In March, the state economist predicted Oregon would bring in just more than $14 billion. He'll present newer numbers today, but Democrats have already planned with the expectation that revenues will be down another billion.

With that budget hole, and a strong Democratic majority in both the House and Senate, increased taxes are inevitable.

At the press conference, Hunt and Majority Leader Mary Nolan stressed that those taxes would target big business and families that make more than $250,000.

"It's unfair and irresponsible to ask people who have already been hit hard in this economy to sacrifice more," Nolan said. "We're going to ask big corporations and those making over $250,000 to help out."

A prime target is the corporate minimum tax which was set at $10 in 1931 and hasn't changed. Nolan said they'd also cut some corporate tax credits, though she couldn't name any in particular.

Beyond that, Nolan and Hunt wouldn't mention any other specific tax plans, though the Legislature has been discussing a variety of them, including increases on beer and cigarette taxes.

How much they need to raise is still unclear.

If Democrats are right and the deficit hits $4 billion, they'll still have to make up $2.5 billion even after cuts. They have about $900 million in federal stimulus money to put toward the cause and a similar amount in state reserves, some of which they want to leave untouched.

With those extra dollars, they still have roughly a $1 billion gap. Not all of that would be filled with new revenue, they said.

Still, Nolan seemed secure in her belief that Oregonians would support a balanced budget that included some new taxes.

"We've been listening to the voters," she said. "We will not let the folks who want to game the system for their personal gain" run the show.

Voters could have the last word if anti-tax activists end up referring any increases to the ballot as they have in years past. Nolan called a referral a "waste of time," but Wayne Brady, a lobbyist for the Taxpayer Association of Oregon, thinks people won't be so quick to send more cash to the government.

"All the people of Oregon are ending up with less money," Brady said, "and the government wants more."