PORTLAND — The three Democratic candidates for governor held a more muted and tentative debate Monday than their rowdy first encounter last week, but still differed over immigration, the war in Iraq and the state’s tax structure.

The debate came just hours after candidates were required to file campaign finance updates with the Secretary of State’s office, revealing that incumbent Gov. Ted Kulongoski has a sizable fundraising lead over his challengers, former State Treasurer Jim Hill and Lane County Commissioner Pete Sorenson.

Kulongoski has a money advantage even though several public employee unions, traditionally among the biggest spenders in Democratic races, have pointedly decided to sit out the primary to express their anger with the governor over cuts to their retirement benefits.

At Monday’s debate, Kulongoski defended his support for those reforms, and was the only participant to call for a sales tax, an idea that’s been repeatedly rejected by Oregonians at the polls.

The governor said pairing a “consumption tax’’ with a substantial reduction in the personal income tax would bring stability to state-funded education, health care and public safety services.

“We have a boom and bust type of system,’’ Kulongoski said.

In response, Hill said the state would be better served by a “rainy day fund,’’ fed when tax revenues are up. Sorenson, meanwhile, stressed his often-repeated call to raise the taxes paid by the state’s largest corporations.

The challengers also jumped on the governor for his support of an off-reservation casino in Cascade Locks that the Warm Springs tribe wants to build. Both said they would have chosen the alternative, had they been in the governor’s shoes, and allowed the proposed casino to be built on tribally owned land in scenic Hood River.

Environmentalists and Hood River residents alike had blasted that scenario, while residents of Cascade Locks have generally embraced the proposed casino.

And on a day when thousands of immigrants and their supporters demonstrated in Salem, Hood River and Portland, the three candidates showed subtle differences in their proposals for how the state should cope with the estimated 11,000 illegal immigrants in Oregon. Hill said immigrants should learn to speak English, while Kulongoski called for tighter controls on the border between the U.S. and Mexico.

On Iraq, the governor couldn’t resist a slight jab at Sorenson, who said that as governor, he would petition President Bush to remove the Oregon National Guard from the war in Iraq.

“First of all, there are currently no Oregon National Guard troops in Iraq,’’ Kulongoski said, although the state’s national guardsmen are stationed in Kuwait, and a delegation is headed to Afghanistan.