November 15, 2001 11:00 pm

By Ray Linker

Observer Staff Writer

PENDLETON Its the economy! Or, more specifically, the recession Oregon finds itself in now.

That was the main message six candidates for governor in next Mays primary election brought home during a two-hour panel presentation Thursday before the annual meeting here of the Association of Oregon Counties.

It was the first time all six candidates, three Democrats and three Republicans, had appeared together before an audience.

After the session, several commissioners and judges from various counties said it was one of the strongest fields for governor they had ever seen and that any of the six could fill the position admirably.

Were facing the serious issue of the faltering economy, said former legislator and two-term state treasurer Jim Hill, the first person to declare himself a candidate for the race.

The economy underlies everything. We need a lot of things, but the question is, how do we pay for them? I think I am the candidate who can make recession as painless as possible.

Hill, who holds a degree in economics from Michigan State University, lamented the fact that Oregon had not established a rainy day fund in recent years when the state economy was good.

Republican candidate Jack Roberts, in answer to a question about the state facing a $250 million deficit, said, Its about management. We can do a better job of managing state government. Roberts, who heads the states Bureau of Labor and Industries and holds a masters of law in taxation from New York University, said the state should not raise taxes to cover any deficit that might occur.

Democrat Ted Kulongoski, who resigned from the state Supreme Court in June to seek the governorship, said, We will have to make tough choices. He said the state needed partnerships with counties to help provide services for the counties, such as mental health services.

The next governor should be able to stand up and say that our government is efficient and using taxpayer dollars wisely, he said.

Kulongoski, who served in both houses of the Legislature, as attorney general and as state insurance commissioner, said, To bring Oregon together, we need to build strong rural economies. The natural resource economy is our anchor tenant in our communities. We have to build a sustainable economy from our natural resources.

Tough-on-crime Republican candidate Kevin Mannix, a Salem lawyer who was in the Legislature for 11 years, said he wanted to see the counties get as much money as possible to help provide services to citizens.

One way would be to remove felons from county jails while continuing to send money to the counties. He added that public health was a top priority with him and that I want public health money to go to counties. The state should also fund the positions of assistant district attorneys in the counties, he said.

Democrat Beverly Stein, former Multnomah County commissioner, said, We need to make sure the economy is strong throughout the state. We need to look at how we can add value to products.

Republican Ron Saxton, former chairman of the Portland School Board and an attorney who said he specializes in complex business transactions, said, We need to make a higher priority of how we want to spend money. People have to be convinced the states money is being well spent. The state has not been making the hard decisions it should have been.