SALEM - Gov. Ted Kulongoski's veto threat failed to stop the Legislature's budget committee from advancing a $5.8 billion plan to fund Oregon schools Thursday.

Legislators and the governor's staff have been at an impasse over how much money the state ought to allocate to the K-12 budget. Earlier in the week, the governor threatened to veto the budget after he learned legislators wanted to shrink the state's reserves to give more cash to schools.

On Thursday, the situation seemed more relaxed but just as unresolved. The governor continued to push for a revision even as legislators, confident they could override a veto if needed, readied the package for a vote in the Senate Friday.

"I think we all understand where the other is coming from," said Anna Richter Taylor, a Kulongoski spokeswoman. "It's a bit of an agree-to-disagree."

Democratic leaders and the governor had planned to provide $5.6 billion to K-12 with a promise of an additional $400 million if economic conditions improved by next year. That would have left the state with about $700 million in reserves.

With the uncertainty of those additional dollars, school districts around the state are budgeting to $5.6 billion, cutting more teachers and school days than may be necessary.

In order to reverse that trend, legislative Democrats decided to increase the K-12 budget to $5.8 billion, with just $200 million contingent on the economy. "In their mind, there was a great deal more certainty" in that plan, said Geoff Sugerman, a spokesman for House Speaker Dave Hunt.

The extra money, of course, jibes with the wishes of school advocates.

"I think the additional commitment that the money will be there for K-12 ... is very reassuring," said Otto Schell of the Oregon Parent-Teachers Association. "I don't think that what is being proposed is reckless."

But the governor does.

Kulongoski worries the economy could continue its downward spiral and the state's deficit could grow. He's also concerned that recently approved tax increases on corporations and the wealthy might not materialize. Fiscal conservatives have threatened to collect enough signatures to put the tax plan before voters, and Oregonians are rarely keen on new taxes.

"The governor has a responsibility to look long-term," Richter Taylor said. "To some degree, some of this is out of our hands."

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