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Legislative Crescendo in May
February 02, 2007
Author: CFM Staff
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Democratic legislative leaders want to adjourn the 2007 session by the end of June, but the real climax of the session could occur in May when voters may decide up to five major policy decisions referred to them by lawmakers.
Those issues could include repeal of the corporate income tax kicker, creation of a state reserve fund, approval of a tobacco tax to fund health insurance for low-income Oregon children, modifications to Measure 37 and elimination of the double majority requirement in May and November elections.
Three of the five possible referrals address the legacy of earlier voter-approved initiatives, including two that wedged the corporate kicker and a double majority voting requirement for property tax increases into the Oregon Constitution.
The Healthy Kids Plan is a major priority for Governor Kulongoski, but faces the prospect of foundering in the legislature because of a lack of votes in the Oregon House to pass an 85-cent per pack tobacco tax increase.
Creation of a state reserve is intended to demonstrate stronger fiscal management in Oregon and earn the state a return to a higher bond rating and lower interest rates.
The five proposals are at various stages of development in the legislative process, but it would be fair to say all of them have a long ways to go to reach the ballot. And there isn't a lot of time to qualify measures for a May election date.
The legislature could avoid a corporate kicker referral if it could round up 40 votes in the House and 20 in the Senate to approve a one-time suspension of corporate kicker tax refunds, projected to total $275 million. Most political observers think it is improbable to attract the 40 House votes.
That leaves legislative leaders the option of referring a measure to voters. For all the trouble, lawmakers most likely would seek voter approval to divert current and all future corporate kicker refunds into a state reserve fund. Two business groups - the Oregon Business Association and the Software Association of Oregon - testified this week in support of a permanent diversion of corporate kicker refunds into a rainy day fund to avoid sharp cuts in essential state spending during economic downturns.
Other business groups may take a more reserved posture, expressing willingness for a one-time diversion of the corporate kicker, but not a permanent diversion. House Republicans might be willing to deal to produce the necessary 40 floor votes for a one-time kicker suspension in return for Democratic support for a capital gains tax rate reduction.
The joint House-Senate committee working on Measure 37 legislation began public hearings this week, which reflected the deep divisions in the state on land-use. A number of witnesses relayed personal examples of how land-use regulations adversely affected them, while others said Measure 37 threatens to undermine state protections for farm and forest lands.
Leaders of the joint committee seem to be working on a 2-step process, with step one involving some kind of extension for state and local governmental agencies to process Measure 37 claims. Working out the details of an extension - how long will it be for; what would happen if a claimant died during the extension - won't be easy. That, in turn, could delay the even harder task of finding some consensus on how to deal with fundamental problems in the landowner rights initiative approved two years ago, but now bogged down in more than 170 lawsuits and appeals.
Arguably, the Healthy Kids Plan, which passed out of the House Health Care Committee late last week on a 5-4 party-line vote, is the furthest along in the legislative process. However, sources close to the legislation say the bill needs work to ensure its provisions, including health insurance coverage for all low-income Oregon children, is sustainable.
And, of course, there is the problem of too few votes for the tobacco tax increase. There is a chance Democratic leaders could negotiate with House Republicans to secure enough votes for the tobacco tax, but no one is quite sure what might be demanded or offered for those votes. It also is possible the tobacco tax could emerge as an early-session positioning vote, with Democrats getting Republicans on record as opposed to a popular health care program.
Creating a state reserve fund may have the easiest path to success. The idea enjoys solid bipartisan support in the legislature and has received unanimous media endorsement. It doesn't hurt that the reserve fund will help secure a higher bond rating for the state.
Tinkering with Measure 5, the property tax limitation initiative voters approved in 1990, could be viewed as politically risky, but a lot of voters didn't realize that measure quietly imposed a double-majority voting requirement on all elections except the November general election in even-numbered years. The result has been a significant number of local bond measures and serial levies that have failed because less than half of the registered voters in a jurisdiction voted, even though those who did vote approved the spending request.
House Majority Leader Dave Hunt, D-Gladstone, would like to drop the double-majority requirement from all May and November elections. Senator Richard Devlin, D-Tualatin, has proposed eliminating the double-majority requirement entirely.
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