SALEM — Oregon’s economic slowdown will not force any immediate cuts to schools or other public programs — and it won’t even force lawmakers to dip into the state’s newly created rainy day fund.

However, that could change if tax receipts drop further than economists project in the state’s September Revenue Forecast.

Lawmakers got a dose of sobering budget news last week from state fiscal analysts, who said a weakening economy would translate into less taxes to finance public programs.

The estimated reduction: about $119 million.

The news brought hand-wringing, and a suggestion from Senate Minority Leader Ted Ferrioli, R-John Day, to reverse raises given to public workers.

“When the dust settles on out-of-control spending, a billion-dollar deficit is not out of the question for 2009,” said Ferrioli, whose district includes Jefferson County and Black Butte Ranch.

“It is time to freeze spending, roll back excessive pay raises, and put a moratorium on new programs so that we can enact tax relief that creates local jobs and gives working-class families what they need to pay the bills and plan for the future.”

Yet unlike in recent years, when tax declines brought lawmakers back to Salem to slash programs, no public programs are in immediate jeopardy.

The reason: Lawmakers did not spend all the money that was anticipated to be available in the 2007-09 budget cycle, leaving a buffer of about 1 percent in the general fund in addition to the rainy day fund.

“We save more money than anyone in the history of Oregon has saved, and one of the benefits of conservative budgeting is that you don’t have to make cuts,” said House Majority Leader Dave Hunt, D-Gladstone.

“Under the old system, any time there was even a modest drop, there would be either strategic or across-the-board cuts,” Hunt said.

Lawmakers have taken one step to soften the impact of the downturn: In June, the Emergency Board reduced by $25 million — or 20 percent — money that was set aside for public employee raises.

The unallocated budget amount in the general fund — known as the “ending fund balance” — was initially projected to be roughly $139 million. Now, with the slowdown, that balance is expected to shrink to about $24 million.

Still, even if the economy sours further — and tax collections don’t reach the newly revised projection in the September revenue forecast — schools, universities and other programs will be insulated somewhat by a new rainy day fund that was established by the 2007 Legislature.

That fund has a balance of roughly $340 million, and could be tapped by the 2009 assembly.

The money came via a one-time suspension of corporate tax rebates that were due under Oregon’s unique kicker law, which sends refunds if actual tax collections exceed projections.

The state also has a companion, lottery-fed school stability fund, with a balance of almost $400 million, said state Rep. Phil Barnhart, D-Eugene, the chairman of the House Revenue Committee.

The rainy day fund also is due to receive any money that’s left in the “ending fund balance” once the biennium ends in June 2009.

Oregon’s state budget is largely reliant on income taxes, and any unexpected change in economic conditions — up or down — can lead to large surpluses or deficits.

Chuck Sheketoff, the director of the liberal-leaning Oregon Center for Public Policy, based in Silverton, said the shrinking budget buffer should encourage lawmakers to increase the state reserves even further.

“The need for the 2009 legislative assembly to enact a more significant revenue source for the rainy day fund is more evident than ever before,” he said. “It would be fiscally irresponsible to do nothing about this.”

Still, the economic slowdown — the state economist characterized it as a “shallow” recession — offered ample fodder for political sniping, which should come as little surprise with the fall campaign season is lurching into gear.

“Unfortunately, the rainy day fund adopted last session seems to be full of holes, and this budget cycle’s contribution has dwindled to a paltry $23.8 million,” said state Sen. Bruce Starr, R-Aloha. “Oregonians deserve a stronger safety net.”

In reaction to Republican criticism, Barnhart said the state will need to be prudent in the next budget cycle, which begins in July 2009.

“Just like every Oregon family has to tighten and adjust as economic fortunes change, we’re going to have to be smart and targeted in our investments as we continue to move forward with a new and revitalized economy for Oregon,” he said.