A Look at the Relatively Quiet Oregon Gubernatorial Race

 Oregon’s 2018 gubernatorial election has been relatively quiet so far, with Governor Kate Brown biding her time until the fall general election and front-running GOP challenger Knute Buehler trying to find a way to win the primary without getting beaten up on the campaign trail.

Oregon’s 2018 gubernatorial election has been relatively quiet so far, with Governor Kate Brown biding her time until the fall general election and front-running GOP challenger Knute Buehler trying to find a way to win the primary without getting beaten up on the campaign trail.

Oregon’s gubernatorial race continues to be a low-key affair with the election now just six weeks away and ballots due to arrive in mailboxes before then.

Democratic Governor Kate Brown doesn’t face any credible primary opposition and seems to be waiting to see who Oregon Republicans will choose to face her in the fall general election.

Rep. Knute Buehler from Bend has raised the most money among GOP candidates and struck a moderate political posture on abortion and guns, making him potentially a strong candidate to woo independent and alienated Democratic voters in November. However, Buehler, an orthopedic surgeon, has to win the May 15 primary against more right-leaning opponents, including former Blue Angels Commander Greg Wooldridge, who has been endorsed by Oregon Right to Life, and Bend businessman Sam Carpenter, who is an unapologetic supporter of President Trump.

The annual Republican Dorchester Conference straw ballot early in March favored Wooldridge over Buehler. Buehler downplayed the result, saying he had little time to mix and mingle with Dorchester conferees because he was in Salem for the short Oregon legislative session that adjourned just when the conference was beginning. Others viewed Buehler’s loss as his weakness with what have come to be called Trump voters.

Since then, Oregon Public Broadcasting reports Buehler has skipped several candidate forums attended by his GOP gubernatorial rivals, which has raised questions. “People are asking why. You know, it’s peculiar,” Baker County GOP Chairwoman Suzan Ellis Jones told OPB. Wooldridge’s campaign team has been blunter. “What is he hiding from. If he’s not willing to meet people face-to-face, I’m not sure he’s really ready to represent the people of Oregon,” said Russ Walker, a Woolridge campaign strategist.

There are 10 Republicans vying to take on Brown. Buehler has reported a campaign war chest of more than $3 million, while Wooldridge and Carpenter are the only other two hopefuls who have raised more than $100,000. Nobody’s campaign has taken to the airwaves so far.

Buehler is betting his experience serving two terms in the Oregon legislature, fundraising connections and moderate policy positions on reproductive rights and gun control will convince Republicans that he is the only GOP candidate with a chance to defeat Brown and become the first Republican since Vic Atiyeh to sit in the governor’s chair. Most of Buehler’s statements have come in the form of criticizing Brown.

Buehler reportedly bypassed challenging Brown in 2016, when she ran to fill the remaining two years of former Governor John Kitzhaber’s fourth term, because Democratic turnout was expected to be high in a presidential election year. However, 2018 may not be all that different as Democrats have energized their political base in response to actions by Trump, such as undermining Obamacare, challenging legalization of marijuana and dismantling environmental regulations. The Trump tax plan that will limit federal tax deductions for state and local taxes and Trump’s tariffs on trade with China have irritated upper-income Oregonians and alarmed farmers. Trump’s overall favorability rating in Oregon hovers below 40 percent.

Voters along the I-5 corridor from Eugene to Portland are reliably Democratic, but there will likely be more Democratic electoral efforts in rural Oregon aimed at Greg Walden, Oregon’s lone GOP congressman. The Republican gubernatorial nominee, whoever it is, may be forced to spend time and resources to defend the Red State part of Oregon.

In the general election, Brown will be attacked as a weak leader who has presided over state agency foul-ups and resulted in a fairly high turnover rate of agency leaders. Brown will cite her leadership in a major transportation funding measure, a hike in the state minimum wage and create of a state-sponsored retirement savings plan.

Buehler probably will need to dig into his campaign fund to raise his visibility before the primary, while Brown probably will hold off any major media outreach until the general election campaign is underway. She has the luxury of using the next few months to bolster her $3.2 million campaign bank account.

That means for now, Oregonians can enjoy the relative quietude of the gubernatorial race. It promises to get a lot noisier and nastier.

 

Oregon Not Exempt from National Opioid Epidemic and Its Painful Price

 The opioid crisis is not some distant national epidemic. It affects Oregon communities and families every day. Addressing the opioid crisis will require more than bumper sticker policies, especially for the people hooked on painkillers because of excruciating chronic pain.

The opioid crisis is not some distant national epidemic. It affects Oregon communities and families every day. Addressing the opioid crisis will require more than bumper sticker policies, especially for the people hooked on painkillers because of excruciating chronic pain.

Opioid addiction is a national epidemic, but its toll is actually exacted at the local and family level. Just ask Oregonians who live in a state ranked with the sixth worst drug problem in the nation.

If you want to see the opioid epidemic up close, you don’t have to book a flight to Appalachia. Oregon ranks fourth for teenage drug abusers. And, Oregon ranks first, according to federal data, for older adults hospitalized for opioid-related issues.

"We have a massive problem," Mark Kruger, a 23-year veteran who is now a captain with the Portland Police Bureau’s drugs and vice division, told KATU-TV. "We're seizing larger quantities of methamphetamine and heroin and cocaine in Portland than we have historically ever seized."

Now there is a new threat from street fentanyl, which is an opiate on steroids, available online and often a one-way ticket to the morgue. "Children now can buy fentanyl on the dark web using bitcoins for currency and they can overdose in their own bedrooms on a substance that no one really knew about a couple of years ago," Kruger said.

This is shocking news for many Oregonians who imagine they live far from the madding crowd. Like many other American communities, we live in ground zero of a drug epidemic.

That reality is painful for Oregonians who were blazing a trail through a pair of ballot measures in the 1990s that weighed “death with dignity” measures with the shortcomings of pain management. Medical practitioners admitted they were negligent in recognizing the pain endured by terminally ill patients. Doctors kept their word and found ways to curb pain, not just for the terminally ill, but also for those suffering from numbing chronic pain.

 "Painkiller misuse in Oregon is higher than the national average, especially in the 18 to 25 age group, as an average of three Oregonians die every week from prescription opioid overdoses.”     https://www.linkedin.com/pulse/heroin-pain-reliever-misuse-prevalence-estimates-vs-apgar-cissp/?trackingId=qd4s4%2F4T3QpBJPvIJ2xioQ%3D%3D

"Painkiller misuse in Oregon is higher than the national average, especially in the 18 to 25 age group, as an average of three Oregonians die every week from prescription opioid overdoses.”  

https://www.linkedin.com/pulse/heroin-pain-reliever-misuse-prevalence-estimates-vs-apgar-cissp/?trackingId=qd4s4%2F4T3QpBJPvIJ2xioQ%3D%3D

But it wasn’t enough. In 1998, Oregonians voted to allow the use of doctor-recommended medical marijuana, ostensibly for pain related to cancer treatment, but often for men and women suffering from work-related back pain. Twenty years later, Oregonians are still auditioning painkillers, from heroin to a synthetic version of anesthesia.

A common temptation is to hang the drug dealer from the highest tree. However, that overlooks the demand side of the equation. Many people hooked on opioids and other painkillers aren’t looking for a thrill; they are trying to find a way to get through the day without debilitating pain.

Like a lot of complex problems without simple solutions, drug addiction has many contributors. There are the thrill-seekers. There are people who think life is better when they are high. But there are a whole lot of people who just want to get through an afternoon without excruciating pain.

Prescription drugs are in the cross-hairs of lots of politicians because of high prices and increasing levels of addiction. The coziness between doctors and drug companies has come under scrutiny. So has over-prescribing of painkillers and flimsy rationale for medical marijuana cards. Recreational use of drugs has blurred with medical use. The financial opportunities for legal and illegal distribution of drugs makes the mix even more lethal.

The proximity of the opioid problem to Oregon communities should provoke empathy and kindle an instinct for nuanced responses. People who get hooked on drugs for fun is one problem. People who get hooked on drugs to dull pain is another. Both require human responses, not criminal indictments. A nuanced response may require people to accept approaches and practices they otherwise would reject out of hand.

Hopefully as a civilization we have advanced beyond dealing with contagion by burning the bodies. The men, women and children afflicted by drug addiction deserve something better. They deserve policies that strike at the root of addiction, not the symptoms.

Statistics can be barren and devoid of sympathy. But statistics also arouse human instincts that people are in pain. We need to find a way to ease that pain without addiction. It is an assignment Oregonians have debated for decades, and now it’s time to do the homework and hand in a winning essay.

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Dale Penn II is a partner and leader of the CFM’s state affairs team. He has been deeply involved in government relations and regulatory affairs in Oregon for more than 12 years and was active on behalf of a range of clients in the 2018 Oregon legislative session.

 

Lawmakers Still Puzzling over Purpose of Short Session

 The 2018 Oregon legislative short session is over, but lawmakers are still trying to figure out how to use the even-year session fruitfully amid its unavoidable frenetic pace

The 2018 Oregon legislative short session is over, but lawmakers are still trying to figure out how to use the even-year session fruitfully amid its unavoidable frenetic pace

Oregon lawmakers continue to struggle to find the right mix for the short, even-year legislative session. They adjourned last Saturday after leaving a much-ballyhooed cap-and-invest bill sitting in committee along with a constitutional amendment to treat health care as a right.

Yet, lawmakers did notch notable accomplishments by tightening gun restrictions on domestic abusers, updating the state’s advance directives statute, requiring more transparency on drug pricing and changing the governance structure of Salem-Keizer Transit in return for future access to a local payroll tax.

And lawmakers didn’t totally avoid controversy. With largely Democratic votes, the legislature approved a bill that disconnected from the recently adopted federal tax cut to prevent Oregon small businesses from taking advantage of a previous Oregon tax concession and a new lower 20 percent federal tax rate. There were rumblings Governor Kate Brown might veto the state tax measure, which drew strong opposition from business groups.

The short session also served as a shadow boxing venue for Brown, who is seeking re-election this fall, and her most prominent GOP challenger, Rep. Knute Buehler of Bend. During the session, Buehler laid out his planks of his campaign platform, such as additional investments in child welfare and taking stronger measures to curb the opioid epidemic in Oregon. Brown responded by asking for $14.5 million more for child welfare case workers and pushing her own priority opioid measure.

The shadow boxing hasn’t stopped with legislative adjournment. Buehler called on Brown to veto the Democratic tax bill scrapping a small business tax break. If Brown vetoes the legislation, Buehler will claim credit. If she doesn’t veto the bill, he will condemn her for denying a tax break to small businesses.

The short session was shorter than the 35 days constitutionally allowed. Republicans wanted to head to the beach for the annual Dorchester Conference. Others sped north on the freeway to attend a retirement roast for veteran homebuilder lobbyist and stand-up comic Jon Chandler. Still others braced for filing deadline Tuesday.

As predicted after Senate Democrats hoisted the white flag on cap-and-invest legislation before the short session started, there wasn’t a lot of drama in the Capitol hallways. There was a lot of pressure, however. Short sessions resemble the flurry typical in the last month of a regular legislative session. One lawmaker observed, “In a regular session, there are deadlines followed by time to get work done. In the short session, there are just deadlines.”

Perhaps notwithstanding Brown’s potential veto of tax legislation, GOP Senator Brian Boquist is entertaining a legal challenge clarifying what legislation is truly a “revenue raiser” and on whether a measure to disconnect from the federal tax code that generates new revenue can be approved without a three-fifths majority vote.

In all likelihood, the dawning of primary election season will overshadow what did or didn’t happen in the short session. The primary will be held May 15, which is less than 10 weeks from now – plenty of time for campaign coffees, lawn signs and mailers.

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Dale Penn II is a partner and leader of the CFM’s state affairs team. He has been deeply involved in government relations and regulatory affairs in Oregon for more than 12 years and was active on behalf of a range of clients in the 2018 Oregon legislative session.

 

Short 2018 Session May Have Less Drama

 No single issue is likely to dominate the Oregon 2018 legislative session that begins Monday, but lawmakers will still be busy with issues ranging from reconnecting to the federal tax code to gun restrictions. And there will be some political jockeying in advance of the Oregon primary in May and general election this fall.

No single issue is likely to dominate the Oregon 2018 legislative session that begins Monday, but lawmakers will still be busy with issues ranging from reconnecting to the federal tax code to gun restrictions. And there will be some political jockeying in advance of the Oregon primary in May and general election this fall.

Voter approval of Measure 101 and Senate Democratic cold water on cap-and-invest legislation may remove much of the anticipated drama at the 2018 Oregon legislative session, which convenes Monday. Of course, any legislative session during an election year can have outsized political tensions.

Without a focus on patching a big budget hole or trying to thread the needle for a compromise on cap-and-invest provisions, there isn’t an apparent single issue that will dominate the session with an adjournment deadline of March 11.

One of the sleeper bills likely to draw attention is legislation to connect Oregon’s personal and corporate income tax system with federal tax changes enacted by Congress late last year. Oregon lawmakers have tended to favor connecting Oregon’s tax provisions with their federal counterparts for the ease of taxpayer filing. But there may be other considerations this time around, including how the new federal limitation on state and local tax deductions will affect Oregon taxpayers.

The Oregon business community wants to see substantial progress on reducing the unfunded liability of the Public Employees Retirement System, but that appears unlikely in the short 2018 session and during an election year. Governor Brown will ask lawmakers to create an Employer Incentive Fund to provide matching money for public employers that accelerate their contributions to PERS. The pressure to act also was relieved by the Oregon State Treasury’s announcement that the PERS fund posted a 15.3 percent gain in 2017, which is good news, but not enough to stem rising costs.

Other priorities for Brown in the short session include a measure to encourage construction industry startups in rural areas that can access low-rate loans from Business Oregon to build affordable housing. Licensing requirements also would be relaxed and grants would be available to defray the costs of apprentices.

Brown wants all licensed opioid prescribers in Oregon to register with a Prescription Drug Monitoring Program to generate information about opioid use and identify illegal prescribers. Her proposal also would provide for mentors in emergency departments to counsel people who have overdosed.

Another Brown priority is to create a reverse auction for state procurement as a way to squeeze more value and less cost for state expenditures. Her concept is to generate more competition among state vendors who benefit from the $8 billion Brown says state agencies spend every biennium. 

The governor is seeking a bill to prohibit people convicted of domestic violence or stalking from purchasing firearms. Oregon lawmakers approved legislation last year to empower courts to order the confiscation of guns owned by people deemed at risk of suicide or hurting others.

Passage of Measure 101, which secures funding for Oregon’s Medicaid program through this biennium, prompted Rep. Mitch Greenlick, D-Portland, to propose a constitutional amendment that declares health care is a right of every Oregonian. He has attracted 40 cosponsors for his referral that would appear on November 2018 general election ballot.

Likely GOP gubernatorial frontrunner Knute Buehler, R-Bend, is pushing legislation to force coordinated care organizations to repay up to $74 million in Medicaid overpayments and address transparency and management issues by the Oregon Health Authority. Buehler has called for bipartisan action, but his measure will invariably have a vapor trail of politics following it.

Some familiar legislative faces will be missing. Long-time Senate Minority Leader Ted Ferrioli and Senator Richard Devlin, the Democrat’s budget guru, have moved on to appointed posts on the Northwest Power Council. Cliff Bentz, who has served in the Oregon House since the 2009 session, assumed Ferrioli’s seat and Senator Jackie Winters was chosen to succeed Ferrioli as minority leader. Rob Wagner, a Lake Oswego School Board member, was appointed to fill Devlin’s seat.

Oregon Voters Give Overwhelming Support for Measure 101

 Governor Kate Brown told Measure 101 supporters at Tuesday night’s victory party that voter approval of the Medicaid funding plan shows Oregonians support a GSD (Get Stuff Done) agenda.

Governor Kate Brown told Measure 101 supporters at Tuesday night’s victory party that voter approval of the Medicaid funding plan shows Oregonians support a GSD (Get Stuff Done) agenda.

Voters in yesterday’s special election overwhelmingly approved of Measure 101, which leaves in place the Medicaid funding plan approved by the 2017 Oregon legislature. It also lifts a huge fiscal burden off the shoulders of lawmakers in the short 2018 session that begins February 5.

The die was cast when, early in the evening, results indicated nearly 80 percent of Multnomah County voters approved Measure 101. Even though half of Oregon’s 36 counties, many of them rural, voted against Measure 101, they were heavily outvoted with strong support among higher population centers across the state.

In a low-turnout election, the side that wins is usually the side that can motivate voters to cast ballots. The pro-Measure 101 campaign had the broad coalition support, cash to advertise and the foot-power to get out the vote. Measure 101 opponents had none of those things. More than 180 organizations, both large and small, came together in dozens of advocacy events to show support in protecting healthcare coverage funding approved during the 2017 legislative session.

Referenda usually start as political quarrels in legislative sessions, which was the case for Measure 101. Whereas in recent sessions, funding mechanisms paying for Oregon’s Medicaid program had enjoyed bipartisan support, the enhanced tax proposal in 2017 met with partisan objections from some Republican lawmakers.

Led by Rep. Julie Parrish (R-West Linn/Tualatin) and Rep. Cedric Hayden (R-Roseburg), opponents called it unfair and declared it a “sales tax on health care.” Similar messaging was used successfully during last year’s M97 debate and opponents were trying to drum up support from Oregon voters who reacted to that rhetoric.

Supporters of the admittedly complicated Medicaid funding mechanism fought back, saying it was the best bipartisan plan to raise the money necessary to attract federal Medicaid matching dollars. They said opponents raised objections, but offered no politically viable alternative funding plan.

In the end, the $3.6 million campaign drowned out the opposition campaign, which reportedly spent less than $150,000 (a significant chunk of that raised in personal loans from Rep. Hayden). While TV ads provided air cover, the real difference was in the get-out-the-vote drive, aided by union and hospital supporters of Measure 101.

A key takeaway from this election may be the impact on future efforts by minority legislators or interests who seek to alter agreements they oppose. With M101 receiving more than a 6o percent majority, those parties may think twice before attempting similar fights on other legislative packages. Oregon’s referendum process is there for a reason, but legislators already have a mechanism for debating the validity and appropriateness of these type of budget and policy issues. Through the election process, voters can hold their elected leaders accountable for their work.

More than 1 million Oregonians are covered by Medicaid, which represented a fertile target audience to turn out to vote. In a relatively low-turnout election, a motivated group of voters can make the difference.

This was an election decided by urban Oregon voters. Majorities in big counties for Measure 101 ranged from 79 percent in Multnomah County to more than 65 percent in Benton and Lane counties. Jackson County in Southern Oregon went 58 percent for Measure 101. Suburban Washington County favored Measure 101 by more than 60 percent and Clackamas County, which Parrish represents, gave the measure a 58 percent plurality. Marion County went for Measure 101 by a 55 to 45 percent margin.

Oregon’s last special election was in 2010 when the state debated M66/67, which raised personal income tax revenue on the state’s highest-earning individuals and corporations. In that election, 1.28 million Oregonians cast ballots, representing 62.7 percent of eligible voters. Final numbers for M101 are yet to be released, but estimates are significantly lower.

The victory for Measure 101 was declared at 8 pm when the first batch of ballot totals were released.

Worker Shortage Looms as Economic Growth Barrier

 Oregon state economists say worker shortages, especially in skilled trades, have bedeviled the state’s economy for some time, but that shortage may become more serious and long-term as retirements outstrip new job market entrants and immigration is curtailed.

Oregon state economists say worker shortages, especially in skilled trades, have bedeviled the state’s economy for some time, but that shortage may become more serious and long-term as retirements outstrip new job market entrants and immigration is curtailed.

When you think of impediments to economic growth, you don’t typically think of worker shortages. But Oregon state economists say that is becoming one of the most pressing problems job-creators here face.

“The labor market is tight,” says Josh Lehner with the Oregon Office of Economic Analysis. “The difficulty finding and retaining workers is the biggest challenge many businesses face today.”

After nine consecutive years of US economic expansion, a tight labor market isn’t a huge surprise. But the availability of labor is being impacted by non-economic factors such as demographics. Baby Boomers are retiring and immigration is being restricted.

“Yes, the working-age population in Oregon is continuing to increase,” Lehner writes in his blog. “There are more warm bodies available to work, or potentially available to work, however that increase is smaller today due to the uptick in retirements.”

Nearly 80 percent of the prime-age working adults (ages 25-54) in Oregon have a job, which is the same level as pre-recession employment levels. Lehner says there is still a little more leeway. The average employment level for this age group between 1993 and 2001 was 82 percent. But it may not be enough to offset the sheer number of retirements.

Employers have faced skilled worker shortages for some time and retirements could aggravate that shortage even more. Automation in manufacturing and service sectors may relieve some pressure, but at the same time may increase the demand for workers who know how to operate and maintain robotic systems.

In-migration and immigration could help. Oregon has benefitted from an influx of younger people working or seeking work in creative fields, but not so much in skilled trades. Some Oregon employers are redoubling efforts to create opportunities for under-represented populations in manufacturing and other business sectors, but that could take years to realize and still not meet demand.

The cost of housing is another factor influencing worker availability. Portland is a hot housing market, which has driven up rents and home values. Some potential workers, especially at entry professional levels, may seek elsewhere with lower costs of living.

Of course, a recession could impact the labor market by shrinking the number of jobs. Lehner says Oregon has reached a tipping point where even an economic downturn may not reverse a tight labor market.

“The cyclical issues will come and go,” he says. “However, the demographic crunch is finally upon us and here to stay for the foreseeable future.”

Carbon Emission Bill on Center Stage in February Session

 Oregon lawmakers will debate a cap-and-invest program at the short legislative session beginning in February that could generate as much as $700 million in new annual revenue to invest in projects statewide to reduce carbon emissions, but opponents warn also could drive up fuel prices, hurt family farmers and disproportionately harm rural residents.

Oregon lawmakers will debate a cap-and-invest program at the short legislative session beginning in February that could generate as much as $700 million in new annual revenue to invest in projects statewide to reduce carbon emissions, but opponents warn also could drive up fuel prices, hurt family farmers and disproportionately harm rural residents.

As Oregonians ponder how to vote on Measure 101 by January 23, Oregon lawmakers are sharpening their arguments for and against legislation in the 2018 session to cap industrial carbon emissions.

Defeat of Measure 101, which contains $320 million in fees on hospitals and health insurers to sustain Oregon’s Medicaid program, could throw a wrench into the short, six-week legislative session that starts in February. However, regardless of the Measure 101 vote, what supporters call the Clean Energy Jobs Act is likely to be a center-stage issue.

The Oregon proposal, developed through a work group and championed by Senator Michael Dembrow of Portland and Ken Helm of Beaverton, both Democrats, is modeled after an existing cap-and-invest program in California.

If enacted into law here, Oregon businesses would be given a limit for their carbon emissions. The estimated 100 Oregon businesses that are likely to exceed the proposed limit would be required to buy market-priced allowances. The allowances would be sold at a North American auction and the revenue generated would be invested in Oregon projects intended to slow climate change.

Backers of the idea say it could generate as much as $700 million annually, providing funding for electric vehicles, residential solar panels, improved bike lanes and utility bill assistance for low-income and elderly Oregonians.

Leading Oregon business and farm groups aren’t so enthusiastic. They warn cap-and-invest will result in higher energy bills, discourage business growth in Oregon, hurt family farm owners and disproportionately harm rural residents. Mark Johnson, a former GOP legislator who now heads Oregon Business & Industry, worries there isn’t enough time in a short session to negotiate an acceptable compromise on such a complex issue.

Similar legislation has been debated in Oregon in previous sessions. This time there seems to be stronger, more unified political support, including from Governor Brown, that might push it through in the 2018 short session in which Democrats control both the House and Senate.

The final version of the legislation is still in flux and isn’t scheduled for public release until next week. Dembrow and Helm are working on ways to mitigate concerns, such as earmarking 20 percent of cap-and-invest proceeds for projects in rural Oregon.

There are strong coalitions working both for and against the proposed legislation. Renew Oregon touts the legislation’s ability to drive clean energy job growth in Oregon. The legislation is also supported by the Oregon Business Alliance for Climate. The campaign against the legislation is organized under the banner of Oregonians for Balanced Climate Policy, which has been around since at least the 2009 session opposing what was then called the Green Jobs Act.

Few Seem Neutral on Polarized Net Neutrality Repeal

 The nerdy issue of net neutrality has stirred up a national hornet’s nest as the Federal Communications Commission repeals an Obama-era rule that critics say guaranteed a free and open internet, but supporters claim would hold back internet innovation with government regulation. The issue has turned into yet another partisan fistfight.

The nerdy issue of net neutrality has stirred up a national hornet’s nest as the Federal Communications Commission repeals an Obama-era rule that critics say guaranteed a free and open internet, but supporters claim would hold back internet innovation with government regulation. The issue has turned into yet another partisan fistfight.

Mere minutes after the Federal Communications Commission on a split 3-2 vote ended net neutrality last week, Washington state’s attorney general filed suit to neutralize the FCC’s action on procedural grounds. Washington Governor Jay Inslee has an even more ambitious plan.

Inslee has come up with five options to force internet service providers in Washington to live up to net neutrality standards. Perhaps the most aggressive option is to empower Washington public utility districts to offer internet service and compete with big-league telecommunications companies.

Washington lawmakers – from both political parties – aren’t far behind. Bills have been introduced for the 2018 session that would forbid internet providers from throttling speeds or charging to prioritize traffic – two of the main concerns expressed by net neutrality supporters.

The FCC anticipated state-level resistance and added a preemption clause. That will be challenged, too. The main legal challenge will center on the FCC’s process, which included a public record featuring as many as 2 million bot-driven comments.

  David Olson , who until 2012 oversaw cable and broadband development in Portland, played a notable role in what emerged as the concept of net neutrality.

David Olson, who until 2012 oversaw cable and broadband development in Portland, played a notable role in what emerged as the concept of net neutrality.

Oregon has joined with a number of other states in the legal challenge to FCC’s action and, given the state’s history on internet openness, may look at legislative options in 2018, too.

A sign of our digital times, the FCC’s repeal of net neutrality has stirred up greater national angst than the GOP-backed $1.5 trillion tax legislation or the investigations into Russian meddling in the 2016 election. However, net neutrality is no less politically polarizing. The FCC hearing room was cleared before the vote because of unruly protests.

Democratic opponents say repeal of net neutrality will signal the “end of the internet as we know it.” Republican supporters say the internet grew without a net neutrality rule, which was only adopted in 2015, and will continue to flourish after the rule is overturned. FCC Chairman Ajit Pat issued a video where he appears to mock critics. Comcast, one of the expected beneficiaries of net neutrality repeal, went to Twitter to say it wouldn’t violate net neutrality principles.

One of the leading defenders of net neutrality is Oregon Democratic Senator Ron Wyden. One of the best expositors of net neutrality repeal is Oregon GOP Congressman Greg Walden. Wyden says repeal is the equivalent of “trickle-down telecommunications.” Walden predicts innovation will continue to propel the internet and ensure competition.

 Critics predict repeal of net neutrality will lead to paid prioritization of the internet and the resulting creation of a slow lane for those unwilling or unable to pay the freight for the fast lane. One critic has offered suggestions for how to measure potential speed throttling and access restrictions –  https://imgur.com/gallery/zfxwB

Critics predict repeal of net neutrality will lead to paid prioritization of the internet and the resulting creation of a slow lane for those unwilling or unable to pay the freight for the fast lane. One critic has offered suggestions for how to measure potential speed throttling and access restrictions – https://imgur.com/gallery/zfxwB

Democrats warn small businesses, educators, telemedicine and rural communities may find themselves on internet “slow lanes.” FCC Commissioner Mike O’Reilly, a Republican, says fears expressed by critics are “guilt by imagination.” 

All this for a nerdy issue that a few years ago nobody ever had heard about, but which underscores how important the internet has become to virtually every aspect of business, education, medicine, research, communications and social interaction.

We certainly haven’t heard the last of net neutrality. Court challenges, a push to reverse the policy in Congress, state legislative action and debate on the political trail in the 2018 elections all loom.

 

Oil Train Rule Rollback May Spark Legislative Response

 The Trump administration decision to roll back an Obama-era rule requiring electronically controlled pneumatic brakes on oil trains is likely to revive legislative attention in Oregon to require railroads to carry “worst-case” insurance and create spill-prevention plans in light of the 2016 derailment in Mosier.

The Trump administration decision to roll back an Obama-era rule requiring electronically controlled pneumatic brakes on oil trains is likely to revive legislative attention in Oregon to require railroads to carry “worst-case” insurance and create spill-prevention plans in light of the 2016 derailment in Mosier.

When they reconvene next February, Oregon lawmakers may revisit legislation to require railroads to carry “worst-case” insurance following a Trump administration decision to roll back a decision to require electronically controlled pneumatic (ECP) brakes on oil trains.

Railroads opposed the rule issued by the Obama administration in 2015 in response to explosive oil train derailments, claiming the cost of ECP brakes exceeds their safety benefits. The Trump administration cited a National Academy of Sciences study that backed up railroad industry claims.

The decision sparked an angry response from Northwest officials, environmental organizations and Columbia River Gorge residents in light of the June 2016 derailment of an oil train in Mosier that spilled 42,000 gallons of crude oil and igniting a fire. Union Pacific blamed the derailment on a faulty rail fastener, not the train’s braking system. Environmental activists insist ECP brakes would help because they control all train car brakes simultaneously.

Brown Oil Train Rule Reaction[1].jpg

The rule rollback is the kind of flash-point issue that can explode into legislative action, possibly in both Oregon and Washington. Governor Brown and Governor Jay Inslee issued a joint statement calling the rollback “reckless and dangerous.” Friends of the Columbia River Gorge said the Trump administration decision points to the need for “strong legislation” requiring railroads to carry worst-case insurance and create spill prevention and crisis response plans. Similar legislation was proposed in the 2017 Oregon legislative session, but failed to pass.

States have very limited jurisdiction to regulate railroads. For example, states lack the ability to ban oil trains. Brown did sign a bill in 2015 that requires railroads to notify states of oil train movements.

Majority Democrats who control the Oregon House and Senate already have a major environmental issue on their plate in the short 2018 session – a cap-and-invest proposal designed to ratchet down industrial greenhouse gas emissions while generating $1.4 billion in new revenue. California already has an emissions credit system in place, which presumably Oregon would join. Business interests are opposing the legislation.

The main event for the 2018 Oregon legislative session will be responding to a potential voter rejection of a pair of hospital and health insurance assessments to sustain the Oregon Health Plan. Defeat of Referendum 101 could blow a big hole in the state’s budget.

By February, Oregon lawmakers should know the fate of GOP-backed tax-cut legislation, including a provision to eliminate state income taxes as a deduction on federal tax returns that would disproportionately harm states such as Oregon that rely heavily on income tax revenues.

The Age of Automation Is at Hand, Literally

 This chart prepared by ECONorthwest shows every corner of Oregon is at risk of job losses resulting from the advance of automation. The spread of robotic applications is advancing faster than educators, workers and policymakers may think, which should prompt serious debate about policies to take advantage of new innovative opportunities and cope with workers and communities left behind

This chart prepared by ECONorthwest shows every corner of Oregon is at risk of job losses resulting from the advance of automation. The spread of robotic applications is advancing faster than educators, workers and policymakers may think, which should prompt serious debate about policies to take advantage of new innovative opportunities and cope with workers and communities left behind

Robots could replace half of Oregon’s workforce by as early as 2030. We could be surrounded by robotic skin much sooner than that.

Automation has represented a job threat for eons, but the fear was largely the stuff of science fiction and obscure graduate student theses. No more. ECONorthwest has produced a study showing jobs in Oregon ranging from flipping burgers to analyzing X-Rays are at risk of automation.

To cope, we may find consolation in draping ourselves with robotic skin developed at Oregon State University that can stretch after we consume a huge Thanksgiving dinner, adjust to fluctuating temperatures and administer our medications. We may be out of work, but we barely have to get out of bed.

The ECONorthwest report was fuel for conversation at the Oregon Business Summit, where the prospect of 50 percent of Oregon workers being displaced deserved to be a topic worthy of serious debate.

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Few jobs are immune from automation, the report concludes. Manufacturing, retail and food services are the sectors most ripe for a robotic takeover. Males in their prime working years will be hardest hit. No one can be smug as robots will crowd their way into the arts, warehousing, education and management.

Not surprisingly, lower-wage jobs in the food service industry were identified as the most vulnerable to automation. More than 90 percent of the 144,200 jobs in this sector as of 2016 may morph into robots. Your fast food may never be touched by human hands until you eat it.

The real message of the ECONorthwest report:

  • Automation is not fake news;
  • Automation is advancing much faster than we realize; and
  • Policymakers are asleep at the switch.
  • Adjustments are needed in educational training and expectations, innovative companies that still need humans should be nurtured and the social safety net should be strengthened for people washed out of the workplace.
  • Concepts such as universal basic income and health insurance coverage need to move from the political fringes to serious policy consideration.
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Meanwhile, back in the research lab, researchers are developing “soft robot bodies.” mLabRobotics at Oregon State University is designing “soft-bodied robots with pre-programmed shapes to enable snake-like location and gentle manipulation.” These are robots that can go where their metal cousins can’t.

Researchers think the same techniques can be applied to robotic apparel, giving our skin its own skin. If we no longer elbow-by-joint with metal robots, we will be joined at the hip wearing them.

Fretting over robotics is a lost cause. Robotics are hurdling forward, promising seismic shifts in how and where we work, how medical diagnoses and procedures take place and how we individually adjust to a bulging belly or a winter chill. 

Robots belong in the conversation about making America great again. Attempts to revive the US coal industry tell the story. To the extent more coal is mined, the digging and driving will be largely done by robots, not coal miners. Looking backward is not a viable option.

(For further thoughts on automation, read http://www.cfm-online.com/marketing-pr-blog/2014/7/14/unique-offerings-with-clear-value.html?rq=Automation)

Process Starts to Weigh Tolling Portland Highways

 A bi-state committee assigned to look at congestion pricing to ease congestion on major Portland highways may find it tough-sledding to convince regional commuters of its value before submitting recommendations this summer.

A bi-state committee assigned to look at congestion pricing to ease congestion on major Portland highways may find it tough-sledding to convince regional commuters of its value before submitting recommendations this summer.

The process has begun to examine the use of tolling as a strategy to ease congestion on I-5 and I-205 in the Portland metropolitan area. It has five more meetings scheduled before a June deadline to produce recommendations to the Oregon Transportation Commission.

At its first meeting last week, the 25-member regional tolling policy committee wasn’t considering old-school toll booths where motorists toss in coins or use credit cards. The panel’s focus instead is on “value pricing,” which is a polite way of saying rationing available roadway space for those willing or no other choice but to pay a toll.

Tollways in Oregon are ancient history. There were tolls on Barlow Road from 1864 to 1919 and Santiam Wagon Road from 1861 to 1915. Since then, nada.

Tolls have been used to pay for the Astoria-Megler Bridge, Hood River Bridge and Bridge of the Gods. Tolling was considered, but not pursued as a funding option in the debate that dead-ended over the Columbia River Crossing. The prospect of tolls on a new I-5 Columbia River Bridge and the existing I-205 Glenn L. Jackson Bridge prompted Washington Congresswoman Jaime Herrera Beutler to try to block the idea in federal legislation. There are Washington representatives on the committee.

A new bridge to remove the bottleneck on I-5 at the Columbia River isn’t on Oregon’s transportation agenda at this point, so the tolling discussion has more to do with stretching the capacity of existing Interstate highways in Portland.

The review of tolling comes as grumbling grows for the increased traffic and lengthening gridlock on Portland’s major highways. The 2017 Oregon legislature approved a major transportation funding measure aimed at dealing with congestion in Portland and bolstering public transportation. Few think the improvements paid for by the funding measure will derail traffic delays in Portland, thus the review of tolling options.

Congestion-based tolls exist in Washington, Texas and Maryland, according to the consultant advising the committee. The idea is to give motorists a financial reason to change when they commute to work or whether they commute as often or at all. Of course, tolling some roads, but not others can incentivize finding a new route to work or drive on side roads. Workers who commute longer distances and have fixed work schedules may bear more than their share of the cost. And the money generated by tolls may not go to pay for any roadway expansion.

There is no guarantee the committee will determine that congestion-priced tolling is a viable strategy for the Portland metropolitan area – or could gain a federal waiver that would be required.

However, Oregon transportation officials and some policymakers see congestion pricing as a way to thread the needle in a state that concentrates development within an urban growth boundary and is reluctant to add lane miles to its roadway system.

Testimony will be taken at upcoming committee meetings, and much of it can be expected to be hostile to tolling. Some of the reader comments posted in the Portland Tribune after its story about the first committee meeting are a foreshadowing. “This is a money grab.” “Toll policy moves more drivers to side streets. Incredibly stupid.” “How about equity.” “Sure, I can just go to work late and leave early to avoid the highest congestion pricing. Then I’ll get fired.”

The next meeting is scheduled for December 7.

 

Oregonians May Get Another Turn at Term Limits

 Oregon experimented with legislative term limits more than two decades ago and the outcomes weren’t what was promised. Once lawmakers were elected, they immediately started angling for their next job, often overlooking serious policy choices staring them in the face.

Oregon experimented with legislative term limits more than two decades ago and the outcomes weren’t what was promised. Once lawmakers were elected, they immediately started angling for their next job, often overlooking serious policy choices staring them in the face.

Oregonians may get another chance to vote for legislative term limits. It would be a good opportunity to buy the idea once and for all.

Unsuccessful GOP gubernatorial candidate Bud Pierce is sponsoring an initiative to re-impose legislative term limits and apply them retroactively to sitting lawmakers. His measure, if it makes it to the 2018 general election ballot and is approved by voters, would disqualify Senate President Peter Courtney and House Speaker Tina Kotek, even though both will be running for re-election on the same ballot.

Term limits are not theoretical in Oregon. Voters approved them overwhelmingly for state and federal lawmakers in 1992. Ballot Measure 3 was partially voided in 1995 by the Oregon Supreme Court to exclude congressional representatives. The entire measure was tossed out in 2002, but not before the fruits of term limits could be assessed. To say the least, the fruit was over-ripe.

Instead of the intended new blood in the legislature, several former lawmakers decided to return to office. That was the good news compared to what happened to the newcomers. They hadn’t settled into their Capitol offices before beginning to plot their next electoral opportunity.

With just three terms in the Oregon House, lawmakers had to make their mark quickly and aim at their next political dart board. A body once distinguished by bipartisan collaboration switched almost overnight to caucus politics by both parties and a political merry-go-round by individual lawmakers of office-shopping.

Perhaps ironically, caucus leaders assumed greater power and imposed stricter party fealty. The concept of new blood morphed into political bloodletting, political opportunism and kicking the can down the road. Why make tough decisions when you would be gone in three or fewer sessions?

Oregon survived the experiment with term limits, but arguably didn’t benefit from it. Now it may have a chance to restore the concept.

For the moment, Attorney General Ellen Rosenblum must rewrite the measure’s ballot title – the most-read part of any ballot measure – to refer to its retroactive provisions. Then Pierce and his allies must collect 88,184 valid Oregon voter signatures by next July to place the measure on the November 2018 general election ballot. Because the idea of “throw out everybody” has a certain visceral appeal, chances are good the measure will make it to the ballot.

Previous Oregon term limits were voided largely on procedural grounds. It is still an open question whether term limits are constitutionally valid. Oregonians – and Americans – have accepted the two-term limit for governors and presidents.

Whether constitutional or not, the question Oregon voters should ask is whether term limits actually do what they promise to do. Empirical evidence in Oregon suggests they didn’t. They had the inimical impact of creating a shifting cast of political characters who began running for a new office moments after being elected to a legislative seat.

The concept of new blood ignores the demonstrable benefits of legislative continuity, not to mention legislative experience. It would be hard for anyone but cynics to deny the enduring contributions of long-serving lawmakers such as Senator Peter Courtney, a Democrat, and Rep. Eldon Johnson, a Republican, to mention only a few. Senate GOP Leader Ted Ferrioli has served for five terms and newly elected Senate GOP leader Jackie Winters has served in the Oregon legislature since 1998. 

Ironically, most lawmakers serve for less than 10 years and move on with their lives. Insiders know it takes at least two to three terms in the legislature to learn the ropes, let alone influence policy.

Hailing term limits is a lot like shopping for a brain surgeon who just graduated from med school. They may be cheaper and less experienced, but they aren’t who you want cutting into your skull to dig out brain tumors.

There will be a lot of heavy breathing if the term limit measure reaches the ballot. Voters would be well advised to seek out the voices of people who lived daily with term limits and can tell you how they worked out in real life.

 

 

It’s Taxing Time in Oregon

 As Congress works on a federal tax cut measure that could significantly impact Oregon income taxpayers, Oregon voters face a decision in January on how to pay for the state’s Medicaid program. And along the way, Oregonians owe their property taxes, too.

As Congress works on a federal tax cut measure that could significantly impact Oregon income taxpayers, Oregon voters face a decision in January on how to pay for the state’s Medicaid program. And along the way, Oregonians owe their property taxes, too.

It’s official. Oregonians will vote in a special election January 23 to ratify or reject tax proposals approved by the 2017 Oregon legislature to sustain the state’s basic and expanded Medicaid program. From all early appearances, this will be a bare-knuckles fight.

Major parties have already lined up for and against Referendum 101. Health care providers, doctors, organized labor, minority groups and social equity organizations are urging a “yes” vote. Taxpayer groups, the Oregon Family Council, small business representatives and the Oregon Firearms Association oppose the taxes.

The stakes are high. As reported by the Portland Business Journal, if the taxes are rejected by voters, the State of Oregon stands to lose between $840 million and $1.3 billion in state and federal funds, depending how courts interpret the wording of the referendum. That would plunge Oregon lawmakers back into a deep budget hole with few escape ladders in the short 2018 legislative session that begins in February.

Defenders of the taxes on health insurance and hospitals say that is the only viable economic way to maintain Medicaid spending levels and avoid forcing more people out of coverage and into emergency rooms for care. Supporters of the referendum say there are other ways to maintain Medicaid without resorting to what Rep. Julie Parrish, R-West Linn, calls a “sales tax on health care.”

The challenge of voting on tax measures is that subtleties are usually lost in the shuffle. Calling anything in Oregon a “sales tax” is usually a kiss of death. [The City of Ontario, perched on Oregon’s far eastern border, enacted a 1 percent sales tax, which is also being referred to voters next May.] Trying to explain the exigencies of a pair of taxes to attract federal matching funds is a hard message to squeeze onto a bumpersticker.

The decision by legislative Democrats to force a special election in January before the short legislative session has created its own political reverberations. Referendum backers have called it a rigged political scheme. Democrats counter that it makes sense to know the outcome before the February session so lawmakers can pursue other options. That argument could come back to haunt Democrats who privately say they really aren’t any viable options to sustain Medicaid at its current spending levels.

Little wonder Senator Richard Devlin, co-chair of the Joint Ways and Means Committee, accepted a paying job as a gubernatorial appointee to the Northwest Power Council. Senate Republican Leader Ted Ferrioli is probably glad he is the other appointee and can skip the 2018 legislative session. Senate President Peter Courtney may appoint himself to replace Devlin, at least temporarily, in the 2018 session – and any special sessions that are needed to deal with the financial shortfall if the health care taxes are rejected.

The aftermath of Referendum 101 may be the headliner issue in the 2018 session, but the issue sucking all the oxygen out the room remains how to strike a grand bargain that involves spending restraint and additional state general fund tax revenue. Political leaders have by and large punted this bigger-scale issue until the 2019 legislative session, after the 2018 elections. Governor Brown is seeking re-election to a full four-year term and legislative Democrats want to cement super-majorities in both the House and Senate so they can pass tax measures with or without GOP votes.

This stalemate is a political hangover from the 2016 election when pro-business interests overwhelmed union-backed forces and defeated an initiative to raise corporate taxes. While the opportunity seemed to exist to bring the parties to a table to start negotiating some kind of compromise, the opportunity was never seized. Brown shied away from any discussion of cuts to the Public Employees Retirement System, which gave little incentive to business groups to sit down to discuss raising their taxes.

The upshot is that Oregonians can expect to hear a lot about taxes between now and Christmas. The GOP-led federal tax cut appears on a path to be considered by then, at the behest of Trump who refers to the tax cuts as a Christmas present to Americans. The uncertainty of whether the tax cuts will be real and durable for middle-class taxpayers could overlap into their voting views on Referendum 101. Confusion and taxes is never a good mixture.

And for good measure, Oregon property owners must pony up their 2017 property taxes next week and make end-of-year decisions that can impact their state and federal income taxes.

Trump's Stormtrooper Tactics

 Frustrated by the failure of Congress to repeal and replace Obamacare, President Trump has started his own executive war against the health care plan named after his predecessor, which threatens the stability of US health insurance markets.

Frustrated by the failure of Congress to repeal and replace Obamacare, President Trump has started his own executive war against the health care plan named after his predecessor, which threatens the stability of US health insurance markets.

There's a funny myth in movie fan culture: Stormtroopers are poor shots. Despite plenty of easy opportunities to hit Luke Skywalker and his allies, the embarrassingly incompetent Empire troops consistently miss. Instead, they spray the target hoping one of their many shots finds an enemy. Once in a while, a shot finds its mark.

I was thinking of this comparison as I watched President Trump try, and fail, on multiple accounts to erode the foundation of the Affordable Care Act. Despite months of work and two very visible failures in Congress. What Trump hasn't achieved through legislation, he is now trying to do by executive orders. Here, unfortunately for backers of the ACA, is where we see the Stormtrooper hitting his mark. 

Over the past three weeks, Trump has used his executive authority to end critical payments to insurers that allow low-income and vulnerable Americans to afford health care coverage. Trump has cut 90 percent of the advertising and education budget in advance of the November 1 open enrollment period – the time of year when people sign up for health care benefits on the open marketplace created by the ACA. By also shrinking the enrollment period, Trump hopes fewer will sign up, reaffirming his narrative that Obamacare is failing across the nation.

Thankfully in Oregon, the leadership at the Department of Consumer & Business Services anticipated this move and took immediate action to supplement public awareness with $1.8 million in ad buys around the state.  However, it's only a matter of time before Trump pursues yet another shot at derailing the ACA, and we cannot expect state and health care leaders to bail out Oregon every time he strikes.

Trump has many additional tools at his disposal that should frighten Oregonians who value our 95 percent coverage rate and who appreciate the importance of improving access to vulnerable populations – those more likely to forego primary care and end up in the emergency room, costing the state and Oregonians more in the long term.  

Trump could continue to erode enrollment assistance programs and funding across the country, putting barriers between individuals and their health care. The federal Department of Health and Human Services could give states the ability to limit enrollment – including who is covered in a state's ACA expansion – by requiring proof of employment or increasing cost-sharing requirements. Finally, he could put all of his effort behind urging Congress to remove the individual mandate, effectively gutting a key component of the ACA that is providing some semblance of stability for insurers to remain in marketplaces across the country.  

I wish Trump was as poor of a shot as an Imperial Stormtrooper, but recently he's been finding his target way too often. Where's Luke Skywalker and Princess Leia when we need them most?

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Dale Penn II, senior public affairs associate, has been deeply involved in government relations and regulatory affairs in Oregon for 10 years. During his work for the 2005 Senate Judiciary Committee, Dale began developing close relationships with key legislators and agency staff across party lines and issue fields.

PERS Task Force Ideas Fall Short of Brown’s Goal

 The task force appointed by Governor Brown will submit its suggestions soon to shrink the Oregon PERS unfunded liability, but during the time the task force met the liability hole grew bigger.  Photo Credit: The Oregonian

The task force appointed by Governor Brown will submit its suggestions soon to shrink the Oregon PERS unfunded liability, but during the time the task force met the liability hole grew bigger.

Photo Credit: The Oregonian

The task force named last May by Governor Brown to identify ways to slice the unfunded liability of PERS will soon submit its ideas, but don’t expect them to be easy to implement or add up to the $5 billion goal Brown set.

One of the most promising concepts floated by the task force emerged at its last meeting and doesn’t have anything to do with selling surplus state property or imposing fees here and there. That idea involves an incentive structure to the 900 or so PERS employers to increase their contributions to pay down the unfunded liability.

None of the ideas coming from the task force could be described as a slam dunk.

  • Imposing an additional tax on PERS retirees receiving more than $60,000 annually in benefits (likely to face an uphill court battle);
  • Increasing permit and fee prices (likely politically feasible, but the amount of money it raises would be minimal); and
  • Transferring some of the $1.6 billion surplus in the State Accident Insurance Fund (a possibility, but it is unclear how much of the surplus could be transferred without adversely affecting SAIF).

Complicating the exercise, the PERS board in July lowered the assumed rate of return on investments, which had the effect of increasing the unfunded liability by another $2.4 billion to almost $25 billion. Business interests pushing for PERS reforms said the investment rate change “unmasked the severity of the problem.” PERS employers, which include school districts, will be expected to pay an additional $900 million over the next two years.

As reported by The Oregonian’s Ted Sickinger, Brown’s 7-member task force, which has met four times, looked under state seat cushions for spare change to shrink the PERS unfunded liability without directly addressing PERS benefits. The search included selling surplus properties, privatizing state agencies and putting a surcharge on liquor sales. None of those ideas gained much traction in task force deliberations.

In the absence of a silver bullet idea, task force members privately said the sum total of their ideas might only reach around $1 billion, far short of Brown’s goal. Even $1 billion may be difficult to achieve since the task force is submitting suggestions, not recommendations by its November 1 deadline. The suggested incentive to PERS employers to increase contributions to qualify for some sort of state matching funds may wind up attracting the most interest, though it would require lawmakers to scratch together the state revenue to provide matching funds.

There is little doubt the PERS unfunded liability will be a major issue in the 2018 gubernatorial election. GOP frontrunner Knute Buehler regularly criticizes Brown for her failure to offer ideas on how to address the PERS liability and put state budgeting on a sustainable basis.

Majority legislative Democrats, supported by Brown, appear poised to push cap-and-invest legislation in the short 2018 session that begins in February, which could generate an additional $1.4 billion in state revenue. Legislative Counsel has opined that the cap-and-invest measure is not a tax and therefore doesn’t require of a three-fifths majority to pass in the House and Senate.

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Zack Reeves is a state affairs associate who represents CFM clients in the Oregon legislature. He began working as a legislative staffer in 2011 and has developed a wide range of contacts and experience on a broad spectrum of legislation. Before politics, Zack worked as a reporter and copy editor.

Oregon Health Plan Goes from Secure to Shaky

  Congressional inaction to continue funding for the Children’s Health Insurance Program is just the latest financial challenge facing Oregon policymakers and putting Oregon’s health plans on shakier ground.

 Congressional inaction to continue funding for the Children’s Health Insurance Program is just the latest financial challenge facing Oregon policymakers and putting Oregon’s health plans on shakier ground.

When the 2017 Oregon legislature adjourned in early July, the state’s health care exchanges and Medicaid program seemed secure for at least another biennium. A lot has changed since then, and the stakes continue to grow.

The funding package to sustain the Oregon Health Plan faces a likely referral vote in January. Congress allowed federal funding for the Children’s Health Insurance Plan (CHIP) to lapse as it debated, but failed to repeal and replace the Affordable Care Act. The Trump administration continues to threaten actions to undermine the Affordable Care Act.

No matter how you spin the situation, Oregon could feel a financial pinch as early as mid-November when its funding runs out for health insurance for thousands of children in the state. The legislature won’t convene until February, so a potential gap in coverage could lead to a reduction in benefits and new enrollments.

Oregon Senator Ron Wyden is working with Senate Finance Chair Orrin Hatch on a bipartisan funding plan for CHIP, but House GOP leaders want to tie continued funding to spending cuts for Medicare, community clinics and grace periods for Affordable Care Act payments.

Oregon policymakers could have an even bigger problem on their hands if voters reject the $320 million funding package that includes a health insurance tax and a new hospital tax. While the majority of the $320 million will shore up the state’s Medicaid program, it also would fund a reinsurance pool that limits individual insurers’ financial exposure for high-cost patients.

The Oregon Reinsurance Program calmed Oregon’s market and paved the way for 6 percent lower insurance premiums. The shaky status of the reinsurance program could affect Oregon’s pending application for a waiver from the Centers of Medicare and Medicaid to administer its programs flexibly. If Oregon’s funding package is rejected, the waiver request could be in jeopardy – along with lower insurance premiums.

According to the Portland Business Journal, Alaska requested a similar waiver, which was approved. However, waiver applications by other states have been rejected or withdrawn. The Washington Post reported Trump intervened to block a waiver request from Iowa, which was seeking ways to increase competition and bring down premiums. Oklahoma withdrew its application after CMS inaction. Minnesota was granted a waiver, but CMS reportedly cut a low-income enrollee program.

The longer-term view isn’t any better. The US House has approved a budget resolution that will be used as the vehicle to move a major federal tax cut and that calls for massive cuts over the next decade to Medicare and Medicaid.

Will Oregon Follow California and Advance Its Primary?

  California is moving up its primary from June to March to be a player in presidential politics. Oregon might follow along since being political afterthoughts in selecting a presidential nominee since 1968 when Robert F. Kennedy surged in Oregon and captured the California primary a few weeks later.

 California is moving up its primary from June to March to be a player in presidential politics. Oregon might follow along since being political afterthoughts in selecting a presidential nominee since 1968 when Robert F. Kennedy surged in Oregon and captured the California primary a few weeks later.

Even though many Americans are still recovering from the last presidential election, maneuvering has already begun for the 2020 election with California moving its primary from June to March to have greater influence on who is nominated. Oregon may follow suit.

Senator Ricardo Lara, the Democrat who carried the legislation that Governor Brown signed into law, said, “The intent of the bill was to put our voters at the front seat in choosing the next president and helping us drive a different agenda at the national level.”

In other words, California kingmakers are tired of Iowa, New Hampshire and a ring of southern states creating unstoppable presidential bids that may not reflect West Coast or progressive values. Oregon may catch the same fever and shift its primary forward from May to March to get some of the overlapping love from candidates attracting votes in California.

At present, Oregon is mostly a tarmac for presidential fundraising. Candidates dart into town, attend a couple of fundraisers and leave. They don’t even bother for media interviews.

California’s decision was met with lots of grumbling from early-voting states that have grown used to the prestige of being power brokers beyond their electoral punch. Party leaders have grumbled, too, because California cutting to the front of the presidential sweepstakes line is disruptive.

The election in 2016 of Donald Trump – and the defeat of Bernie Sanders in the Democratic primary – persuaded progressives that their voice needed to be added to the mix earlier in the process. Oregon doesn’t possess the same electoral clout, so its previous flirtations with an earlier presidential primary mostly evaporated into political thin air. However, with California moving up, Oregon might think it wise to join the party, like a barnacle attaching to a humpback whale.

While an earlier California primary could create major headaches for presidential campaign staffs and consultants – such as, how do candidates keep their messages straight in Georgia and the left Coast in the same news cycle, voters out west will probably be glad to have a more compelling voice in the choice of presidential nominees.

While Oregon’s primary is ahead of California’s, it’s been a long time since Oregon voters helped to decide a presidential nomination in either party. For Republicans, the 1976 presidential election was the last time Oregonians voted before there was a presumptive nominee. For Democrats, you have to go back to 1968 and the insurgent campaign waged by Robert F. Kennedy, who lost in Oregon, but won the California primary a few weeks later and may have gone on to become the nominee if he hadn’t been assassinated at his California victory party.

The timing of primary elections is linked to a drive by progressive forces to move toward direct popular election of presidential candidates and scrapping (or at least bypassing) the electoral college. Oregon has been part of that movement, too, which is tied up with a belief that a popular vote will force candidates to campaign everywhere, not just in early primary states and key swing states.

Trump admitted he shaped his campaign to win the states with the electoral college votes needed to win the presidency. If the election would have been determined by a direct popular vote, he said he would have campaigned more in California.

Candidates in the 2020 presidential, who are already jockeying for position, will have to spend more time in California – or even be from California – because of the state’s earlier primary.  It will be fun to see whether Oregon joins the parade, perhaps assuming it might boost the chances of an Oregon favorite son with presidential stars in his eyes.

Lawmakers Divide Up Work on Cap-and-Invest Legislation

 Majority Democrats have set up work groups with the ambitious aim of bringing a cap-and-invest program to the short 2018 Oregon legislative session that starts in February.

Majority Democrats have set up work groups with the ambitious aim of bringing a cap-and-invest program to the short 2018 Oregon legislative session that starts in February.

Oregon legislative Democrats announced this week formation of a series of work groups tasked with creating a cap-and-invest program in Oregon. The work groups stem from a series of hearings near the end of the 2017 legislative session when Senate Bill 1070 was unveiled. While the bill didn’t receive a committee vote, it laid the groundwork for what is expected to be the front-and-center issue of the 2018 session.

At a joint hearing of the Senate Environment and Natural Resources Committee and the House Energy and Environment Committee, chairs Senator Michael Dembrow and Rep. Ken Helm announced four subcommittees that will hold hearings around the state this fall:

  • Agriculture, Forest, Fisheries, Rural Communities and Tribes (chaired by Helm);
  • Utilities and Transportation (chaired by Senator Lee Beyer);
  • Regulated Entities (chaired by Dembrow); and
  • Environmental Justice and Just Transition (co-chaired by Reps. Diego Hernandez and Pam Marsh).

The stated goal of these subcommittees is to redraft SB 1070 for the 2018 session.

A cap-and-invest program is an evolution of a cap-and-trade system, which sets a hard cap on greenhouse gas (GHG) emissions. The regulating entity then sells permits that companies can purchase, allowing them to emit a certain amount of GHG. For example, if a state allows 10 million tons of greenhouse gas emissions annually, the state would sell 10 million one-ton permits, which companies could buy in a marketplace.

Cap-and-invest takes process a step forward, requiring the state to use the funds generated by the sale of permits to fund certain programs. These programs are usually dedicated to reducing GHG emissions.

Both cap-and-invest and a carbon tax set a price that companies pay for GHG emissions. While cap-and-invest sets an emissions limit and allows the market to set the price for the credits, a carbon tax simply sets a price for GHG emissions while neglecting to cap emissions. The cap-and-invest model has several advantages, incuding emission reduction certainty, and revenue to invest in new programs.

Dembrow and Helm are modeling their legislation after a similar program in California. The program was renewed with a bipartisan vote and recently endorsed by the California Chamber of Commerce. According to Dembrow, the program would allow the state to meet its emission reductions goal by 2050.

The work groups – consisting of legislators, advocates and industry representatives – met for the first time last Thursday, with each group meeting for two hours.

In what figures to be a knock-down, drag-out fight during the upcoming session, majority Democrats are driving the process with Republicans in both chambers participating in the opening round of work group meetings. They may have an incentive to participate in crafting of the legislation given that many observers expect Democrats to pick up a seat in both the Senate and House in the 2018 elections, giving them a supermajority in the 2019 session. That would allow Democrats to pass a carbon tax, for example, in the 2019 legislative session without Republican votes.

Democrats are mimicking the process used to sculpt the successful 2017 transportation package – gathering a large group of stakeholders, divide into work groups tackling certain topic areas and crafting legislation that hopefully is bipartisan enough to move through the Capitol and avoid a referral. The inclusion of Republican support, and Republican votes, is key.

However, the transportation package took several years, dozens of statewide meetings and vocal commentary from both parties on the need for investments in Oregon's aging infrastructure prior to a long legislative session where final passage was never guaranteed. The process for cap-and-invest faces a much harder path. A short, one-month legislative session does not provide much room to negotiate or cut deals.

It remains to be seen whether this bill will result in the creation of a large new program in the state, or whether it is simply the start of a longer conversation, but it is one to pay attention to as we move closer to the 2018 short legislative session.

Further information about Dembrow and Helm’s effort can be found here.

Latest ACA Repeal Measure Would Punish Oregon

 CNN posted a map showing how the latest Senate GOP effort to repeal and replace the Affordable Care Act would affect states such as Oregon and Washington that expanded their eligibility for Medicaid coverage. Other states that are billion-dollar losers under the GOP proposal include California, Ohio, Pennsylvania and Michigan.

CNN posted a map showing how the latest Senate GOP effort to repeal and replace the Affordable Care Act would affect states such as Oregon and Washington that expanded their eligibility for Medicaid coverage. Other states that are billion-dollar losers under the GOP proposal include California, Ohio, Pennsylvania and Michigan.

The US Senate is taking another stab at repealing and replacing the Affordable Care Act (ACA), this time with a plan that could disproportionately hurt the Medicaid programs in Oregon and Washington. Oregon could be one of the hardest hit states, with more than a $3 billion loss over the next decade.

Along with 18 other states ranging from New York to North Dakota, Oregon and Washington expanded Medicaid eligibility under provisions of the ACA. The latest version of the Cassidy-Graham bill in the Senate would effectively scrap discrete federal funding for the expansion as part of a plan to give states Medicaid block grants.

“The revised version of the Cassidy-Graham plan would disproportionately harm certain states,” according to the Center of Budget and Policy Priorities, a nonpartisan research and policy institute that analyzes how federal budget priorities impact low-income Americans. “The block grant would not only cut overall funding for the Medicaid expansion and marketplace subsidies, but also starting in 2021 redistribute the reduced federal funding across states based on their share of low-income residents rather than their actual spending needs.”

The Center says states that expanded Medicaid eligibility, including Oregon and Washington, could end up receiving 35 to 60 percent below what they get now from the federal government under current law. That would exacerbate Oregon’s budgetary challenge if the Medicaid funding package approved in the 2017 legislative session is referred to and rejected by voters in a special election next January.

After a dramatic Senate floor showdown in August that failed to approve a previous GOP proposal to repeal and replace the ACA, it seemed as if congressional Republicans had decided to move on to other issues, including tax reform. The proposal by GOP Senators Bill Cassidy and Lindsey Graham seemed to come out of nowhere and has sparked speculation it could get enough votes to pass.

Senate Republicans only have until September 30 to approve an ACA repeal and replacement measure with 50 votes under complicated budget reconciliation procedures. That means Senate Republicans, who hold a slim 52-member majority, can only afford to lose two of their members on the repeal vote. A 50-50 tie vote would be broken under Senate rules when Vice President Mike Pence cast a vote. The Trump White House has signaled it would support the Cassidy-Graham bill. GOP Speaker Paul Ryan has indicated he would push for House passage.

Opponents say the Cassidy-Graham measure also would destabilize the individual health insurance market by eliminating ACA subsidies and allowing states the flexibility waive essential benefits and weaken the pre-existing condition provisions in the ACA.

“While insurers would still be required to offer coverage to people with pre-existing conditions,” the Center says, “insurers could charge unaffordable premiums of thousands or tens of thousands of dollars per month, effectively resulting in a coverage denial.”

Insurers also could offer plans with large benefit gaps such as maternity care, substance abuse treatment and mental health services, which a Kaiser Family Foundation analysis was a common pattern in health insurance before passage of the ACA.

The impact could be even greater as the Cassidy-Graham bill reduces the per capita allocations in block grants for all states starting after 2026. “Many states would likely cut home and community-based services, which allow people needing long-term services to remain in their homes rather than moving to a nursing home,” according to the Center.

If Senate Republicans are unable to muster the necessary 50 votes for Cassidy-Graham in the next 10 days, then all the dire predictions will be put aside.

Another casualty of Cassidy-Graham has been the bipartisan effort in the Senate Health Committee to find politically acceptable ways to stabilize the individual health insurance marketplace and reduce pressure on higher premiums. Senator Lamar Alexander, the GOP chairman of the committee who was working with Washington Senator Patty Murray, said no consensus was reached. The effort was undercut when Ryan said the House wouldn’t consider a bipartisan stabilization bill.

A group of 10 governors representing Medicaid expansion states sent a letter to Senate leaders urging a continuation of bipartisan efforts on the ACA, saying that the way to “achieve true, last reforms.” One of the governors is John Bel Edwards of Louisiana, which is the home state of Senator Cassidy.

Louisiana Secretary of Health Dr. Rebekah Gee sent a letter directly to Cassidy that said, “In its current form, the harm to Louisiana from this legislation far outweighs any benefits. Therefore, I must register our deep concerns and hope we can find a better path forward toward fixing the broken parts of our healthcare system.

State Economist Blog: Font of Credible Information

 If you have a question about how Oregon is doing, there is no better place to look at the blog posted by State Economist Josh Lehner that covers topics from craft beer sales, natural disaster recovery and what counties are job magnets.

If you have a question about how Oregon is doing, there is no better place to look at the blog posted by State Economist Josh Lehner that covers topics from craft beer sales, natural disaster recovery and what counties are job magnets.

If you want to know what’s really happening in Oregon, a good place to look for information is the blog published by the Oregon Office of Economic Analysis.

Recent blog posts track a slowdown in craft beer sales, what it takes to recover from natural disasters like wildfires and which counties in Oregon are adding jobs – and which are not. State Economist Josh Lehner, who writes the blog, is also trying to get a handle on the pot industry.

 As the chart shows, rural counties depend more heavily on public sector wages for teachers and road crews to bolster their local economies.

As the chart shows, rural counties depend more heavily on public sector wages for teachers and road crews to bolster their local economies.

The writing is anything but dull and the data is credible. Sometimes the findings are downright surprising. For example, large swaths of Oregon’s rural areas identify politically as Republican and presumably favor smaller government, even though public sector wages account for 40 percent or more of the local economy in counties such as Gilliam, Wheeler, Grant, Harney, Lake and Jefferson and more than 25 percent in another 12 counties.

Here are a handful of other interesting nuggets unearthed by the state economist:

  • Slowing craft beer sales, at least so far, hasn’t resulted in an unusual number of brewery closures, but does indicate craft brewing may be maturing as an industry. With eager new brewers entering the market, oversaturation is a real possibility, which could signal a higher rate of closures down the line. At the moment, Oregon sees four to five brewery closures per year at a 2 percent rate. The overall closure rate for US manufacturers is around 7 percent.

 

  • If you want to be a brewer, salaries range upward from $30,000 to as much as $76,000 for brewmasters. Jeff Alworth, author of The Beer Bible, is quoted by Lehner as saying, “These are not terrible salaries, but neither are they going to line a person’s garage with Teslas.”

 

  • Lehner notes that natural disasters have a perverse effect on Gross Domestic Product. Burned houses, lost cars and destroyed bridges are not counted, but rebuilding and replacing them is. So, in a sense, natural disasters are pro-growth.

 

  • “Natural disasters not only scar the land, but they also leave lasting impressions in our brain. I’m from the Great Plains and I remember as a kid seeing the aftermath of the Yellowstone fires of 1988 and the Great Flood of 1993 along the Mississippi River even years after the fact. The apocalyptic pictures we are seeing now of the Gorge, and outside of Los Angeles will leave a lasting psychological mark. Our hope is they do not leave a huge lasting societal and economic mark as well.”

 

  • “Climate. Weather forecasting is even more difficult than economic forecasting a year or two into the future. While the severity, duration and timing of catastrophic events like earthquakes and droughts are difficult to predict, we do know they impact regional economies. Droughts in particular impact our agricultural sector and rural economies to a larger degree. Longer-term issues like the potential impact of climate change on domestic migration patterns are likewise hard to predict and outside our office’s forecast horizon. There is a reasonable expectation that migration flows will continue to be strong as the rest of the country becomes less habitable over time.”

 

  • “Just as Oregon’s economic expansion continues, so too does regional growth across the state. While half of the Oregon’s individual counties are currently at all-time highs for employment, nearly all have added jobs in the past year. Given regional variations, industrial mix, and noisy data, not once in the past 20+ years have each of Oregon’s 36 counties added jobs at the same time. In the second quarter 33 did add jobs over the past year, keeping with the typical pattern seen during expansions. Only Curry (barely), Morrow and Sherman counties lost jobs in the past 12 months.”

 

  • “Some of these job gains in rural Oregon are driven in part due to the local industrial structure and nature of the Great Recession. Many rural economies are more reliant upon housing and government than the larger, more diverse urban economies. It is not so much that rural areas love housing and government. Rather it is the rest of the private sector is smaller, thus making the public sector in particular a larger share. As the economy has continued to improve, migration flows have returned and public-sector budgets are growing again, rural economies across Oregon have seen better growth. Even as the public sector remains a steady share over time in Oregon, that steady share varies in magnitude depending which part of the state we are looking at.”

 

  • The marijuana industry in Oregon is still emerging from the shadow economy, which makes projecting its growth and revenue-generating capacity complicated. State economists nevertheless predict marijuana sales will net the state general fund more than $140 million over the next two years. Tax revenues could slip if the price of marijuana drops, as it has since legalization of adult-use pot in Colorado. It could dry up entirely if the federal government curtails the legal sales of marijuana in states such as Oregon.

 

  • Tracking the marijuana industry is further complicated because it still can’t use the banking system in America and has no classification code. As a result, if a pot-infused edible is sold eventually by a bakery, it may not be counted – or taxed. Similar problems make it hard to estimate how many people are employed in the marijuana industry. The Oregon Employment Department estimates that between 7,000 and 8,000 people are employed in the state’s cannabis industry, with an average annual salary of slightly more than $25,000.