SALEM — Moments after taking office, Gov. John Kitzhaber made clear that his first task will be balancing a state budget bleeding money. Legislative leaders agreed. On Tuesday, they'll dive into the daunting task as lawmakers begin the 2011 legislative session.

SALEM — Moments after taking office, Gov. John Kitzhaber made clear that his first task will be balancing a state budget bleeding money. Legislative leaders agreed. On Tuesday, they'll dive into the daunting task as lawmakers begin the 2011 legislative session.

When they're done, Oregonians will be left with less generous state services — perhaps reduced benefits on the Oregon Health Plan, possibly larger classes in public schools and maybe fewer convicts behind bars.

Slicing spending and government programs will dominate lawmakers' attention. But they'll also examine issues such as banning plastic grocery bags, drawing new legislative districts and overhauling the higher education system. Of course, anything with a price tag will be a tough sell. "Anyone who thinks they can get something through this session that costs a lot of money is not thinking correctly," said John Isaacs, executive director of the Oregon League of Conservation Voters.

Budget analysts estimate the general and lottery funds will come in $3.5 billion short of continuing current services for two more years. Those are the funds over which lawmakers have the most control.

To close the budget gap will take political courage: It is almost certain to include painful cuts to education, social services and public safety — core programs that also are top priorities for voters.

With a projected cost of $18.1 billion to keep services at their current levels, lawmakers will have to cut nearly one of every five budget dollars. Costs are expected to grow by 25 percent over current levels, in part due to the end of federal stimulus funds, more Oregonians needing state services and required payments to the Public Employee Retirement System.

Kitzhaber is expected to release his budget recommendations Tuesday. This past week he said he will suggest deep cuts to education and health care to make up for the end of federal stimulus funds that supported those programs over the last two years.

He's proposed a cut in benefits for patients on the Oregon Health Plan and a reduction in payments to doctors who treat them. The Legislative Fiscal Office projects that, without changes in the law, caseload growth will cost an additional $466 billion over the next two years.

Lawmakers also likely will look at slicing pay, benefits and retirement money for government workers. Pension payments for state workers, teachers and other public employees will cost an additional $374 million due to the decreased value of investments in the state pension fund.

They're also likely to explore changes to Measure 11, which imposes mandatory minimum sentences for many crimes and is blamed for growth in the cost of prisons. Kitzhaber has said repeatedly since his election in November that prisons are a cost that could be lessened with better schools and support programs for children.

But scaling back prison spending could be a tough sell just months after voters approved a new ballot measure imposing mandatory minimum sentences on more crimes, including repeat offenses for driving under the influence of intoxicants.

"We think that the real serious concern here is the budget crisis. That looms over everything," said Tim Nashif, director of the social conservative Oregon Family Council.

Nashif said social issues will be a smaller focus for his group this session as he promotes legislation for growth in jobs that keep families on solid financial ground.

Beyond the budget, lawmakers will consider hundreds of bills covering dozens of issues.

They'll also wrestle with the contentious task of drawing new maps for legislative and congressional districts following the release of 2010 Census data. The result has enormous poltical consequences. If lawmakers can't reach agreement, the once-per-decade process falls to others — Secretary of State Kate Brown for legislative districts, and federal judges for congressional districts.

Lawmakers will probably take up environmental issues that languished in their 2009 and 2010 meetings, including a ban on the use of bisphenol A, or BPA, in food and beverage containers and a ban on single-use plastic bags at grocery stores.

The state universities have asked for more autonomy, and lawmakers will weigh the request as they also look at cutting state funding for higher education.

Rep. Kim Tatcher, R-Keizer, said she'll push a number of measures loosening gun laws. One would prohibit the release of a list of Oregonians who have permits to carry concealed weapons, ending a legal dispute over whether the list is a public record.

Another would make Oregon the fourth state to allow almost all adults to carry concealed weapons without getting a permit.

Thatcher struggled to get much traction with her gun proposals when Democrats had a firm grasp on the House and Senate. But growth in the number of Republicans, including a tie between the parties in the House, could ease the path.

Lawmakers convened on Jan. 10 and met for three days of organizational tasks before heading home with plans to return Feb. 1 to begin official deliberations. For the first time, lawmakers depart Salem knowing that they'll be back a year later. A ballot measure approved in November requires lawmakers to meet every year instead of only odd-numbered years.

AP-WF-01-29-11 1732GMT