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Environmental groups met with Gov. Tina Kotek's office, urging state action on long-delayed repairs at Winchester Dam in Douglas County as legal battles drag on.
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Kotek told reporters that suspending $1 billion of the expected tax refund could be crucial to pay wildfire costs.
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The bill would exempt from state income taxes any money received as a result of a wildfire-related lawsuit.
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Officials in Southern Oregon are trying to get more state funding to combat the explosion of illegal marijuana cultivation over the past year.