IP 28 Would Boost Taxes and May Dampen Economy

The Legislative Revenue Office released its long-awaited analysis of an initiative to impose a gross receipts tax on large corporations selling in Oregon. It says taxes would definitely go up and the overall economy might take a hit.

The Legislative Revenue Office released its long-awaited analysis of an initiative to impose a gross receipts tax on large corporations selling in Oregon. It says taxes would definitely go up and the overall economy might take a hit.

The initiative to impose a gross receipts tax on larger corporations selling in Oregon would raise $6.1 billion in revenue in the next biennium, while pushing up consumer prices and dampening income, employment and population growth in the next five years.

The Legislative Revenue Office (LRO) shared its findings today on IP 28, which will simultaneously cheer its public sector supporters and send shudders down the backs of its business opponents. Lawmakers and others have been clamoring for weeks for the findings, which will confirm fears and hopes, depending on your point of view.

The $6 billion in new tax revenue would fortify the state’s ability to boost funding for education, health care and senior services and make Oregon’s corporate tax system less volatile in down economic cycles, according to LRO.

Because the tax change falls heaviest on as few as 274 larger corporations with more than $25 million in annual sales in Oregon, LRO says they may find it worthwhile to restructure their businesses here to avoid high taxes. The retail and wholesale trade sectors would be hit the hardest by the tax increase, which could put upward pressure on consumer prices, shrink job creation and possibly even discourage some people from moving here, LRO projects.

There are other variables that complicate the analysis. One is the definition of a sale in Oregon. Another is the exemption of S-corporations, partnerships, proprietorships and benefit corporations, known as B-corps.

Then there are anomalies that arise in the interaction between existing corporate income tax rates and a corporate minimum tax in the form of a gross receipts tax. LRO provides an example of two hypothetical companies, each with $60 million in Oregon sales. For Corporation A with only $3 million of net income apportioned to Oregon, its tax would rise from $218,000 to $905,001 under IP 28. For Corporation B with $18 million of net income apportioned to Oregon, its current tax of $1.358 million would be the same under IP 28. 

It appears certain Oregonians will vote on IP 28 this fall after backers submitted far more signatures to the Secretary of State than required to qualify for the general election ballot. The specter of IP 28 and a boisterous political showdown between labor and business has caused others to back off potential initiatives, citing a lack of support and campaign cash, which is being sucked into the IP 28 vortex.

The LRO report doesn’t contain a smoking gun data point. Oregon tax revenue would rise as a result of IP 28, moving up the state’s per capita rate of taxation from 28th to 20th nationwide. The ratio of taxes to income would climb from 10.1 percent to 11.6 percent, with Oregon jumping from 26th to 9th nationally in that category.

LRO predicts the marginal impact of IP 28 will be to make Oregon’s tax system more regressive, but not by that much. Income, employment and population growth would be dampened, but only slightly. Larger negative impacts would be offset by higher public sector expenditures that tend to circulate in local economies.

LRO projects a net loss of 20,000 Oregon jobs – 37,000 in the private sector and reduced by a gain of 17,000 public sector jobs. Employment would decrease most sharply in the retail and wholesale sectors. Income would decrease $430 million, with income dropping 0.8 percent for households earning less than $100,000 annually.

The biggest “if” in the LRO report is now affected corporations will respond. “Both the large size of IP 28’s revenue impact and its concentrated impact on a small group of large corporations adds considerable uncertainty to the estimates,” LRO concludes.

Oregon’s Primary a Microcosm of the National Election

  Political outsiders dominated in the Oregon primary as Democrat Bernie Sanders scored a double-digit win over frontrunner Hillary Clinton and newcomer Bud Pierce captured the GOP gubernatorial nomination.

 

Political outsiders dominated in the Oregon primary as Democrat Bernie Sanders scored a double-digit win over frontrunner Hillary Clinton and newcomer Bud Pierce captured the GOP gubernatorial nomination.

Oregon’s presidential primary Tuesday serves as a microcosm of the national election. Democrat Bernie Sanders keeps winning to complicate frontrunner Hillary Clinton’s pivot to the general election and Republican Donald Trump glided to victory even though 32 percent of Oregon GOP voters cast ballots for candidates who had dropped out of the race.

Republicans chose Bud Pierce, a first-time candidate who largely self-funded his campaign, to challenge incumbent Democratic Governor Kate Brown. Portland voters swept in Ted Wheeler as mayor-elect, Brad Avakian won a hotly contested race as the Democratic nominee for secretary of state, and Clackamas County will see a fall runoff for commission chair pitting Jim Bernard against incumbent John Ludlow.

Hood River County voters approved a ban on a water bottling plant, parting ways with voters in Cascade Locks who supported Nestlé Waters plan to build the facility there. Meanwhile, Klamath and Grant county voters rejected marijuana-related businesses, Portlanders narrowly okayed a 10-cent gas tax increase and Multnomah County voters gave solid approval to an Oregon Historical Museum bond.

The Sanders victory in Oregon defied widely published polling results that showed Clinton holding a double-digit lead. With almost 90 percent of the vote counted, Sanders posted a 12 percent lead, and his dominance didn’t stop in Portland and Eugene. He outpolled Clinton in every Oregon county except Gilliam.

Sanders’ success in Oregon sends a troubling message to Clinton’s campaign. He likely would have done even better here if independents and non-affiliated voters could have voted for him in the primary.

Trump carried all Oregon counties, which isn’t surprising since no one else was campaigning. A year ago, when Trump announced his candidacy, it was unimaginable he would still be in the race at this point, let alone on what amounts to a victory lap to the GOP presidential nomination. 

Pierce handily defeated Allen Alley, a former Oregon GOP chairman, by running a campaign as a fresh outsider face. In his campaign victory speech, Pierce, who is a Salem medical doctor, told supporters, “I am not corrupt. I am not corruptible."

Raw vote totals confirm that Oregon is a blue state. Sanders and Clinton received around 550,000 votes compared 350,000 GOP votes for a presidential candidate. Brown, who faced only marginal opposition in the Democratic gubernatorial primary, racked up more than 400,000 votes while all GOP candidates received a combined total of 286,000 votes. 

Avakian overcame strong opposition from fellow Democrats Val Hoyle and Richard Devlin in what emerged as the most bruising campaign in Oregon’s primary. Avakian, who is state labor commissioner, now will face Republican Dennis Richardson, who lost to John Kitzhaber in the 2014 gubernatorial race. The wounds inflicted on Avakian in the primary may make this a more interesting race in the fall, giving Republicans at least a glimmer of hope to capture a statewide office.

Wheeler, who is state treasurer, will be in an interesting position as Portland’s mayor in the wings until he is officially sworn in next January. Wheeler was recruited by a coalition of business and labor to challenge Mayor Charlie Hales, who decided not to seek re-election. Hales has continued to fester a contentious relationship with groups such as the Portland Business Alliance, which Wheeler may be asked to mediate over the next few months.

Democrat Tobias Read will face Republican John Gudman to succeed Wheeler, who was term-limited as state treasurer.

Portland Commissioner Amanda Fritz easily won re-election, but Steve Novick will be forced into a fall runoff, probably against architect Stuart Emmons, after capturing only around 43 percent of the vote.

Clackamas County Chairman John Ludlow finds himself in the same situation, only he trailed fellow Commissioner Jim Bernard who collected 37 percent of the vote to Ludlow’s 28 percent. They will scramble to win the other 45 percent of votes cast that were split between Commissioner Paul Savas and Oregon City Mayor Dan Holladay. Clackamas County Commissioner Tootie Smith also will compete in a fall runoff against challenger Ken Humbertson. Commissioner Martha Schrader won re-election.

Victories in November by Bernard and Humbertson would change the tilt on the Clackamas County Commission to more middle-of-the-road politics.

Incumbent Washington County Commissioners Roy Rogers and Dick Schouten were re-elected, as were Metro Councilors Craig Dirksen, Sam Chase and Bob Stacey. Schouten and Stacey ran unopposed.

Perhaps the most interesting legislative primary race saw newcomer Rich Vial capture the GOP nomination in Oregon House District 26 over former Rep. Matt Wingard who sought a comeback. Wingard faced stinging opposition centered on his previous conduct that forced him to resign.

House Speaker Tina Kotek turned back a primary challenge from Sharon Nasset, whose campaign was tied to questionable tactics involving misleading mailings.

Oregon Senator Ron Wyden won the Democratic nomination after threats failed to materialize for a challenge to his re-election from the political left. Congressman Kurt Schrader overcame a challenge from progressive candidate Dave McTeague. Congressmen Peter DeFazio and Greg Walden and Congresswoman Suzanne Bonamici walked over token opposition in their respective primary contests.

Results on local school elections were mixed. Bond measures in Gaston and McMinnville won, but ones in the Corbett, Molalla and Centennial districts lost. Clackamas County voters gave the green light to commissioners to explore funding for road improvements. Rogue Valley Transit won voter approval for a property tax increase and Rogue Community College passed a $20 million bond measure.

Secretary of State Jeanne Atkins predicted 1 million votes would be cast in this year’s primary, marking only the second time that threshold has been reached. The first was in 2008, sparked by the Democratic presidential runoff between Clinton and Barack Obama.

The primary was the first statewide election since Oregon’s Motor Voter law went into effect, which automatically registered people to vote when they took out a driver’s license. Atkins previously reported that many newly registered voters affiliated with a political party, with Democratic registration far outstripping Republican registration. 

Oregon Liquor Privatization Shaken, Not Stirred Again

For the second election cycle in a row, a grocer coalition has backed away from an initiative to privatize Oregon liquor sales. Grocers say they will focus on defeating a gross receipts ballot measure, but opponents say they ditched their initiative because polling showed it would fail.

For the second election cycle in a row, a grocer coalition has backed away from an initiative to privatize Oregon liquor sales. Grocers say they will focus on defeating a gross receipts ballot measure, but opponents say they ditched their initiative because polling showed it would fail.

The grocer coalition, pushing for liquor privatization in Oregon, has withdrawn its initiative and says it will focus instead on defeating a labor-backed initiative to impose a gross receipts tax on corporations with large revenues. 

Opponents of the liquor privatization measure say the real reason Initiative Petition 71 was pulled is because it didn’t poll well enough to win in this November’s general election.

This is the second consecutive election cycle that Oregon liquor privatization boosters have backed off initiatives after Washington voters approved a similar measure in 2011.

Meanwhile, the Oregon Liquor Control Commission has expanded its pilot program by allowing liquor sales in 14 additional Portland-area grocery stores. The OLCC said the 14 retail licenses it issued represent the largest liquor expansion in Oregon since Prohibition.

For those unfamiliar with liquor regulation, Oregon is considered a “control” state. The OLCC, which is a state agency, buys and distributes distilled spirits through state-licensed liquor stores. The arrangement dates back to post-Prohibition and is rooted in a policy mindset that liquor consumption can be moderated through limited access and higher prices. Those higher prices feed generous amounts of cash into the state General Fund and city and county budgets and fund mental health and substance abuse services. 

As you might imagine, liquor sales is big business. In the 2013-2015 biennium, distilled spirit sales in Oregon totaled $1.06 billion. After paying for inventory and compensating state liquor store agents, there were net revenues of $435 million. The lion’s share ($247 million) went to state coffers, $77 million went to cities and $39 million went to counties. More than $17 million went directly to community mental health and substance abuse service providers.

Those revenue numbers explain the reticence of public officials to surrender control of the liquor supply chain. They don’t explain why Oregonians are ambivalent about moving liquor sales in part or totally over to private enterprise.

Nigel Jaquiss of Willamette Week reports that Oregonians for Competition dropped IP 71 because after spending $1 million it still didn’t poll well enough to win in the fall election. Jaquiss obtained four relatively recent polls, all funded by opponents of liquor privatization, that showed support for privatization ranging between 32 and 41 percent. The most recent poll, which surveyed 800 Oregonians last month, showed 54 percent opposed IP 71, while only 41 percent favored it.

Dan Lavey, who is advising privatization opponents, said grocers should be concerned about the gross receipts tax, but added, “There are two reasons why people abandon or never start campaigns – lack of money or you don’t believe you have a path to victory. The grocers don’t lack for money.”

Pat McCormick, spokesman for the coalition that pushed for IP 71, said its polling showed “voters are ready to allow Oregonians to buy liquor in grocery stores, alongside beer and wine, like consumers in most states.”

Grocers can be expected to take another run at legislation in the 2017 session. But it does seem clear the landscape for privatizing liquor in Oregon is different than it was in Washington. First off, the Washington initiative passed – opponents would say rammed through – because of a $20 million contribution to the campaign from Seattle-based Costco. Second, privatization in the Evergreen State has been met with mixed reviews. Liquor is available in more places, but at higher prices.

Another factor is the flexibility being shown by OLCC, under the leadership of Chair Rob Partridge, to experiment with different approaches to enhance consumer convenience, including permitting the state’s craft distillers to operate tasting rooms.

“I don’t think Oregonians want a liquor store on every corner. I don’t think they want every gas station and convenience store to have bottles of liquor – that’s not what I hear from Oregonians,” Partridge told KATU News.

He said Walmart, which received four of the 14 new retail licenses, says it plans to offer a limited variety of liquor in its stores compared to what is available in state liquor stores. “Sometimes you buy things for convenience,” Partridge said. “Other times, you’re shopping for that great unique specialty product. So, there’s room in the market for both.”

The Oregon Primary Will Matter. Almost.

  Coming to the game late in the primary, Oregon voters may not feel like their votes count on May 17, but the state's handful of delegates could be enough to put Donald Trump at or near the 1,237 delegates he needs for the GOP nomination. 

 

Coming to the game late in the primary, Oregon voters may not feel like their votes count on May 17, but the state's handful of delegates could be enough to put Donald Trump at or near the 1,237 delegates he needs for the GOP nomination. 

Oregonians voting in the May 17 primary will almost feel like their ballots mattered. Almost.

After primaries in five Eastern states today, including delegate-rich Pennsylvania, Donald Trump and Hillary Clinton may be close to locking up their respective parties’ presidential nominations. The Oregon primary may not matter after all. 

But whether or not the outcome is sealed up, the presidential candidates are expected to come here. John Kasich is scheduled to campaign in Oregon this week. Trump, Clinton and Sanders should come, too.

The only other remaining candidate, Ted Cruz, won’t show up. Cruz and Kasich cut a deal by which Cruz will concentrate on Indiana and Kasich will campaign in New Mexico and Oregon. Their collective goal – and increasingly desperate hope – is to win enough delegates to block Trump’s seemingly inevitable march to the GOP presidential nomination this June. Kasich says the divide and conquer strategy was necessary because he and Cruz have limited time and campaign cash.

Kasich has been embraced by a good chunk of Oregon’s GOP establishment, with former Oregon lawmaker Bruce Starr steering his campaign activity here. Kasich’s pragmatic approach to policy and his refusal to engage in negative campaigning fit pretty well with Oregon’s temperament, but the Ohio governor may be viewed by GOP conservatives as not conservative enough. For example, Oregon’s pro-life leader said the Kasich-Cruz deal wouldn’t change her group’s endorsement of Cruz. It also doesn’t help that the Kasich team neglected to submit anything for the Oregon Voters’ Pamphlet.

On the Democratic side, Bernie Sanders may make his Oregon campaign a referendum on issues he wants to see in the party’s national platform. Sanders sent out a slick mailer devoted entirely to five-point plan to combat climate change. He also has shown an ability to attract a huge crowd at his previous rallies in Portland.

Clinton has experienced hands guiding her Oregon campaign activity. Expect the Clinton pitch in Oregon to be for party unity in the fall to prevent Trump or any other GOP candidate from capturing the White House. Clinton might underscore the need for party unity by pointing to the nomination of U.S. Supreme Court justices who will preserve abortion rights and key aspects of Obamacare and possibly overturn Citizens United, the decision that opened the floodgates to large and sometimes secret corporate campaign contributions.

A Trump appearance, which his local backers are encouraging, would be an event. Despite promises of acting more presidential on the campaign trail, Trump seems to be back to his old ways – calling out critics and taking aim at Clinton. At a rally this week, Trump mocked Kasich for always campaigning while he’s eating.

Because Oregon’s Democratic and Republican primaries are closed, non-affiliated Oregon voters won’t get a chance to cast a ballot for a major party candidate. That invariably incites a debate about a different kind of primary that allows everyone to vote, regardless of party registration.

The Oregon primary may not really matter in determining who wins the 2016 GOP and Democratic presidential nominations, but it will make many Oregonians feel as if their votes matter a little bit. Oregon’s handful of delegates may be enough to push Trump near or over the 1237 delegates he needs to capture the GOP nomination on the first ballot and avoid a contested convention. Oregon’s Democratic vote could lend its voice to the need for progressive platform planks. .

We aren’t likely to see candidates eating at our favorite local diners, but are likely to see them at events, not just faces in the backseat of limousines rushing to or from the airport after a fly-in fundraiser. That makes the Oregon primary matter. Almost.

The Long Shadow of IP28

An initiative to raise the tax in Oregon on corporations with large sales is destined to spark a sharp argument over business paying its fair share and taxes that lead to higher consumer prices.

An initiative to raise the tax in Oregon on corporations with large sales is destined to spark a sharp argument over business paying its fair share and taxes that lead to higher consumer prices.

Oregon faces a lot of serious issues, but they all may pale in the shadow of IP28, the proposed initiative that would increase the minimum tax paid by corporations with sales exceeding $25 million per year in Oregon. 

Proponents and opponents will argue about the merits and demerits of IP28, but it is hard to argue with Duncan Wyse, the president of the Oregon Business Council, who says, “IP28 will suck up the money and energy that could go toward other issues.”

Wyse and others worry the debate over IP28 will widen Oregon’s political divides as well as overshadow other important debates ranging from improving rural economies to solving the housing affordability crisis in Portland.

The 2016 Oregon legislative session considered, but failed to pass an alternative to IP28. Backers have until July to collect the needed signatures to place the initiative on the November general election ballot. Few doubt it will make it to the ballot. 

The Oregon Legislative Revenue Office estimates IP28, if approved by voters, could generate as much as $5 billion in new revenue during a biennium. A Better Oregon, the group pushing the initiative, says the additional revenue should go to public education, health care and senior citizen services. 

IP28 would turn Oregon’s corporate minimum tax into a gross receipts tax for larger corporations. Supporters say the measure will force out-of-state corporations that profit from sales in Oregon to pay their fair share of taxes. Opponents claim it would result in higher consumer prices.

Because the initiative exempts other kinds of businesses (S corporations, partnerships, B corporations and limited liability companies), business advisers say corporations may organize differently in Oregon to avoid the higher tax. Critics also note that the initiative can’t bind a future Oregon legislature on how to spend the money it would raise. While lawmakers may feel politically obliged to spend on the purposes proposed by initiative backers, they wouldn’t be constitutionally bound to do so.

Backers say the measure will make up for Oregon’s low overall taxation on business.

There is no doubt or disagreement the initiative will spark a vigorous, if not rancorous debate. The 2010 special election campaigns over Measures 66 and 67 – which raised the corporate minimum tax and increased the tax rate for higher-income Oregonians to raise $733 million – degenerated into name-calling and fractured political relationships, especially between business and organized labor. IP28 would impose a bigger tax change, which former state economist Tom Potiowsky has called a “sales tax on steroids.”

While there is plenty of time for arguments over IP28, its shadow already may have a chilling effect on other campaigns. What shaped up a bombshell election season in Oregon has turned out to be more of a dud. The gubernatorial race is flying under the media radar. The rumored challenge-from-the-left to Oregon Senator Ron Wyden never materialized. The race for the Democratic nomination for secretary of state, which features three candidates with credentials, has drawn little attention.

The 2016 legislature managed to pass a minimum wage bill that will avoid having that issue on the November ballot. But the session itself was marred by partisan wrangling and arguments over the purpose of an even-year, 35-day legislative session. The rancor also has led to a recall effort against Senate President Peter Courtney.

If IP28 casts a long shadow on Oregon politics, the raucous presidential primary is the big elephant in the room. It is the dominant topic of political conversation on news outlets and across kitchen tables. The “Final Five” candidates in the running for the Republican and Democratic presidential nominations are expected to campaign in Oregon prior to the May 17 primary, drowning out pretty much everyone else.

The November general election could be a different matter as the GOP and Democratic frontrunners Donald Trump and Hillary Clinton both have unusually high negative ratings according to national polls. Assuming they capture their respective party nominations, they would mount vigorous campaigns aimed at stimulating voter turnout, with Trump appealing to alienated white blue-collar workers and Clinton trying to recruit younger voters activated by Bernie Sanders’ rhetoric about a rigged economy and establishment politics.

Those appeals for radical change could complicate the efforts of IP28 opponents, who already acknowledge the initiative starts with a majority in support.

A Tale of Two Tax Systems

Washington’s sales tax, which carries the revenue load in the Evergreen State, faces a shrinking tax base because of the growth of online sales and the ease of driving to Oregon that doesn’t have a general sales tax.

Washington’s sales tax, which carries the revenue load in the Evergreen State, faces a shrinking tax base because of the growth of online sales and the ease of driving to Oregon that doesn’t have a general sales tax.

Oregonians regard their state tax system as the worst possible – except for all the alternatives, especially a sales tax. That hasn’t blunted calls for “tax reform” in Oregon, including a new initiative to subject large corporations to a gross receipts tax.

KUOW, the NPR affiliate in Seattle, aired a story about the woes of Washington’s state tax system, which depends heavily on a sales tax. The punch line of the piece was that if Washington had Oregon’s system that taxes income, it would raise almost double what the state generates now per fiscal period.

That “unofficial calculation” by the Washington Department of Revenue is based on data that shows the Evergreen State’s sales tax base is shriveling as a percent of an expanding economy, while Oregon’s relatively progressive income tax rakes in increasing revenue when the economy expands. 

Studies in both states have shown that a sales tax may be a little less volatile than an income tax in up and down economic cycles. But Washington’s analysis of its sales tax base shows it may be inadequate to the task of keeping pace with economic growth when more and more economic growth occurs online. It doesn’t help that Washingtonians cross the border into Oregon and make purchases they can cart home without paying sales tax. 

KUOW’s online version of its story includes “Washington’s Chart of Doom,” an analysis by Treasurer James McIntire that shows sales tax revenues peaked in 1987 as 6.93 percent of the state’s economy and have steadily declined since then to 4.8 percent in 2015. McIntire projects revenue to keep falling to 4.65 percent by 2021.

That’s a tough trend line, aggravated by economic and population growth that places new demands on public revenues.

Oregon and Washington have talked for years about the three-legged stool of taxation – income, sales and property. You don’t have to look far for a state with all three – Idaho. The KUOW report says if Washington adopted Idaho’s tax system, it would collect $10 billion more per fiscal period.

Oregon goes through spasms of tax reform fever, which often involve brief romances with a sales tax. The KUOW story quotes Oregon Legislative Revenue Director Paul Warner as estimating it would take a 12 percent sales tax to equal what the state’s income tax yields. Washington’s state sales tax rate is 6.5 percent.

Contrasts between the two states note that Oregon has no sales tax, which isn’t exactly true. Oregon and some Oregon localities have imposed a few selective sales taxes, most notably on hotel and motel stays, and in some tourist-centric towns on food and entertainment. When you add in Oregon’s gas tax and state-controlled pricing on distilled spirits, one of the main selling points of a sales tax – capturing revenue from tourists – isn’t especially convincing, not that Oregonians seem persuadable on the subject anyway.

There is little motivation from retail businesses to support a sales tax, especially in border communities like Portland that reap benefits from Washington commuters who already drive here to work, eat lunch at restaurants, shop on their way home and pay income tax on their Oregon-based earnings. This explains the success of the Costco store on the Oregon side of the Glenn Jackson Bridge. 

The Oregon tax system demon is economic volatility, which produces plentiful revenues in good times and sparse revenues in bad times. Economic theory would say that problem is curable by stashing away “excess revenue” during economic booms to fill in gaps when the economy lags. This is where economic and political theory diverge. With growing demands for spending, “excess revenue” is hard to define. That drove a GOP-led legislature many years ago to install, with voter approval, the personal income tax kicker, which rebates revenue that exceeds a state revenue forecast by 2 percent or more. Oregonians received a modest personal income tax kicker rebate based on their 2015 tax returns, which averaged around $125 and sucked $402 million out of the state’s General Fund.

It’s inevitable some Washingtonians and Oregonians will continue to cast covetous eyes at each other’s tax system as political leaders struggle with how to generate revenue, particularly for public education. It’s unlikely the two states will trade out their current core taxes, but very likely they will keep complaining about their shortcomings.

Washington to Vote on Carbon Tax

Washington could become the first state in the nation with a carbon tax if voters pass Initiative 732 in November. But state budget analysts warn it could amount to a loss of more than $900 million in tax revenue over a four-year period. 

Washington could become the first state in the nation with a carbon tax if voters pass Initiative 732 in November. But state budget analysts warn it could amount to a loss of more than $900 million in tax revenue over a four-year period. 

Washington state could find itself at the cutting edge of taxing carbon emissions with Initiative 732 heading for the ballot this fall. But opponents and budget analysts fear the bold plan goes a step too far.  

The measure would create a new tax of $25 per metric ton of carbon burned in fossil fuels, including gasoline, natural gas and coal. It also would also shrink Washington’s sales tax rate by one percentage point and virtually eliminate the business and occupation tax for manufacturers.

If the initiative passes, Washington will become the first in the nation to tax carbon emissions as other states look on.

“I-732 encourages cleaner energy solutions by shifting the tax burden onto carbon pollution and away from regressive and burdensome taxes that hurt families and businesses,” says Carbon Washington, the group behind the initiative.

Sounds great. So, what’s the problem? Well, as always in the process of creating new taxes and changing the rates of old ones, you have to look at the broader picture. And the big question surrounding I-732 comes down to its fiscal impact, which thus far has been defined by polar opposite projections from either side of the initiative battle.

Carbon Washington argues the tax would ultimately be revenue-neutral, bringing in an estimated $1.7 billion a year while returning roughly that much to taxpayers by lowering the sales tax. State budget analysts with the Office of Financial Management, on the other hand, estimate the tax change would amount to about $915 million in lost revenue for Washington over a four-year period, a painful gut punch for a state where annual budget shortfalls have become the norm.

Yoram Bauman, the founder of Carbon Washington, fired back at the OFM in February, saying the agency miscalculated the fiscal impact of I-732. Bauman added that OFM analysts are not carbon tax experts.

However, the Department of Revenue and legislative budget analysts also project I-732 would create a net revenue loss for the state.  

Several major state organizations have come out against the initiative, including the state Democratic Party, the Washington State Labor Council and the International Association of Machinists and Aerospace Workers. Ultimately, they argue that it’s the worst time to experiment with a change that could jeopardize so much tax revenue.

“At a time our state is struggling to fund basic services – including public schools, mental health facilities and many other essential services – I-732 would send Washington in the wrong direction and create more damaging austerity choices,” Labor Council President Jeff Johnson said.

Numerous environmental activist groups support I-732, but it's also drawing criticism from some environmentalists. Several factions of Democrats in the legislature and county-level Democratic organizations across the state also are lining up behind the initiative, which supporters tout as an economic stimulus that will do something concrete to address climate change without hurting the middle class.

Lowering the B&O tax for manufacturers would help keep living wage jobs in Washington, proponents argue. The group anticipates reducing the sales tax would save hundreds of dollars a year for the average household in Washington. The initiative would provide up to $1,500 a year in tax rebates for about 400,000 low-income households across the state, Carbon Washington says.

The legislature had a chance this winter to alter the carbon tax proposal and address revenue concerns. But in a short session ruled by more immediate budget woes and questions about adequate education funding, that simply didn’t happen. It also didn’t happen during the special session that ended March 29.

Now, it’s up to the voters to decide what to do. Given Washington voters’ recently muddled history on tax reform measures, it’s anyone’s bet as to how this one will turn out on Election Day. 

Justin Runquist is CFM’s communications counsel. He is a former reporter for The Oregonian, The Columbian and The Spokesman-Review. Away from the office, he’s a baseball fanatic with foolhardy hopes that the Mariners will go to the World Series someday. You can reach Justin at  justinr@cfmpdx.com and you can follow him on Twitter at @_JustinRunquist.

Oregon's Mailed In Gubernatorial Race

Oregon pioneered mail-in balloting and now may be spearheading a new innovation – the mailed in gubernatorial campaign.

Oregon pioneered mail-in balloting and now may be spearheading a new innovation – the mailed in gubernatorial campaign.

The 2016 presidential race is a tornado of tweets, debates and name-calling. Meanwhile, the 2016 Oregon gubernatorial race is more like a still wind with few Facebook posts and a couple of press releases. Oregon has led the nation in mail-in voting. Now we may be leading it with mailed in campaigning.

Democratic Governor Kate Brown seems to have her foot on the pause button. Republican challenger Bud Pierce is running a campaign that resembles an earnest, sleepy Sunday morning political talk show. Allen Alley, who has run for governor before and entered the race late this go-round, appears to be resting on his name familiarity and party ties to win the GOP nomination.

For Oregon voters looking for a roll-up-your-sleeves discussion of policy, there is mostly silence. For voters rooting for a raucous, bare-knuckles campaign, there is just an empty prize-fighting ring. The political combatants are evidently occupied elsewhere.

Chances are the fireworks will come. There is partisan animosity about a Democratically-backed minimum wage boost, a requirement for paid sick leave and a utility-negotiated deal to end coal power in Oregon. Partisans on both sides of the political aisle may be annoyed by the lack of a vigorous exchange on policy or politics by the candidates.

It’s almost as if Oregon politicians are withdrawing in the face of a tumultuous and coarse political primary battle, as Donald Trump and Ted Cruz wage war in the gutter, and while Hillary Clinton and Bernie Sanders spar over her Wall Street speeches and the realism of his policy proposals.

This year shaped up as a show-stopper election in Oregon with just about everyone except Senator Jeff Merkley appearing on the ballot. But the promise of a blockbuster ballot has shriveled into a deflated balloon as serious races failed to materialize and the races that exist have resembled junior high school dances with the girls hugging one wall and the boys the other. 

The gubernatorial race so far has been a non-starter. Brown, who took over for Governor John Kitzhaber amid an influence-peddling scandal, got high marks for a strong start. She demonstrated leadership and wielded her friendly personality to good stead. But since then, Brown has grown more cautious, even as the Democratic-led legislature punched through liberal legislative measures in the short 2016 session.

While Brown’s reticence could be explained as politically expedient, it is harder to understand the political logic of Pierce and Alley. Challengers have to lay siege to an incumbent, creating voter willingness to consider an alternative. The best blow Pierce has landed is that things aren’t quite up to snuff in Salem. Alley has basically said we can do better than what we’ve got. It usually takes more than that to unseat an incumbent, even one running for the job for the first time.

Oregon has become a reliable blue state, making a statewide election victory for a Republican a dubious prospect any time. Prospects in 2016 could be even dimmer if Donald Trump is the party’s national standard-bearer, forcing down ballot candidates to spend time disavowing his statements and stands. Neither Pierce nor Alley seem on the same wave length as Trump or his closest rival, Ted Cruz. Maybe they figure the less said, the better.

The closest to political excitement so far in Oregon was a Bernie Sanders rally last week, which was timed to boost his support in the Washington state Democratic presidential caucus. Sanders also filled the Portland TV airwaves with his commercials.

The Oregon primary is now only a few weeks away, so you expect the political pace here to pick up with a gubernatorial debate or a major policy speech or something. Maybe the candidates were waiting for spring break to end to launch their real campaigns. Or maybe they are on an extended spring beak themselves.

Portlanders have seen a respectful contest to replace Charlie Hales as mayor. The candidates have talked about policy differences, which are tiny, and the two frontrunners insisted that other candidates be included in mayoral forums. All very polite, very Portland, very much material for the next season of Portlandia. 

Gary Conkling is president and co-founder of CFM Strategic Communications, and he leads the firm's PR practice, specializing in crisis communications. He is a former journalist, who later worked on Capitol Hill and represented a major Oregon company. But most importantly, he’s a die-hard Ducks fan. You can reach Gary at  garyc@cfmpdx.com and you can follow him on Twitter at@GaryConkling.

Session Anger Sparks Courtney Recall Drive

[Photo Credit: The Oregonian] Despite brokering the bipartisan deal that allowed the rancorous 2016 Oregon legislative session to end smoothly and early, Senate President Peter Courtney faces a recall drive led by a Woodburn Republican who says the longest serving Senate president in state history is “out of touch.”

[Photo Credit: The Oregonian] Despite brokering the bipartisan deal that allowed the rancorous 2016 Oregon legislative session to end smoothly and early, Senate President Peter Courtney faces a recall drive led by a Woodburn Republican who says the longest serving Senate president in state history is “out of touch.”

Senator Peter Courtney, the longest serving Oregon Senate president, is facing a recall attempt for the third time in a long political career that stretches back to 1980. The drive, which started collecting signatures over the weekend, may represent spillover hard feelings from the 2016 legislative session.

Courtney's critics are perturbed about successful Democratic legislation in the short 2016 session to phase out coal power and raise the minimum wage. They also are upset that Courtney didn’t push through the resolution to ask voters to approve setting aside 2 percent of Oregon Lottery proceeds to help veterans.

The coal-to-clean bill, which was hammered out as a compromise between electric utilities and environmentalists to avoid a more aggressive ballot measure this fall, created political tension during the short session. House and Senate Republicans demanded that bills be read aloud in their entirety, which slowed down session progress and jeopardized passage of several major bills, including the coal-to-clean legislation.

Some of the venom of the short session landed on Courtney, who played a lead role in convincing Oregonians to amend the state Constitution and permit annual sessions. Skeptics said it was unlikely lawmakers would stick to minor housekeeping legislation and budget tweaks in the 35-day, even-year session. The 2016 session was packed with high-profile bills, including multiple minimum wage bills, several marijuana industry measures and significant energy and environmental legislation.

Matt Geiger, a Woodburn business leader who ran unsuccessfully for a House seat in 2014, is spearheading the Courtney recall. Geiger was planning to make another run for the House, this time as an Independent, but dropped his plans to pursue the recall.

Geiger said the higher minimum wage will harm the agricultural and small business sectors. The utility-environmental compromise on coal, Geiger said, would drive up electricity rates without real environmental benefits in Oregon. He also questioned a bill introduced by Courtney that would allow mass transit districts to impose a payroll tax. That bill never made it out of committee during the 2016 session, largely because Courtney let it sit in deference to the bill’s critics. 

“It’s time we remove from office someone who is clearly out of touch with the needs of his community and who only seems to care about which special interest is writing him a check,” Geiger said in a press release.

However, Dick Hughes, editorial page editor for the Statesman Journal, wondered aloud in a weekend column why Courtney is being targeted. The recall pecks at the coal-to-clean bill that passed, but it fails to mention the California-styled cap-and-trade energy bill that Courtney blocked, to the frustration of many Democrats.

“Peter Courtney is an odd target,” Hughes wrote. “I’m befuddled. The liberalist liberal among legislative leadership is House Speaker Tina Kotek, not Courtney.” It was Courtney who brokered the deal between Republicans and Democrats that allowed the rancorous session to end smoothly and early.

Courtney became Senate president in the 2003 session when there were 15 Democrats and 15 Republicans. He was the only Senate Democrat who Republicans trusted enough to hand him the gavel. He has held the post since then.

Courtney won re-election in 2014 and hasn’t given any firm indications of whether he will run again in 2018 when he will turn 75. The two previous recall efforts against him failed to gather enough signatures. In Oregon, the last 10 recall petitions have failed to receive enough valid signatures. The last successful recall election occurred eight years ago with the ouster of a Wheeler County district attorney. 

The Legislative Trail from Salem to Olympia

Passing bills in the Oregon and Washington legislatures is similar, but markedly different in key ways, such as a power Rules Committee and permitting floor amendments in Washington. But Oregon knows how to adjourn on time; Washington not so much.

Passing bills in the Oregon and Washington legislatures is similar, but markedly different in key ways, such as a power Rules Committee and permitting floor amendments in Washington. But Oregon knows how to adjourn on time; Washington not so much.

Early adjournment of Oregon's short 2016 legislative session provided an opportunity to hop on a train and see the waning days of the Washington Legislature in Olympia. I was looking for similarities and differences, and I found plenty of both. 

Generally, Oregon's and Washington’s legislatures are similar. They are both “citizen” legislatures. They meet annually, with longer sessions in odd-numbered years and shorter ones in even-numbered years. They also tend to wait until the last minute to pass major bills, after extended periods of political jockeying and horse-trading.

Now, here are are some key differences I noticed. 

Washington's Rules Committee wields real power: All Washington policy bills must go to through the Rules Committee before reaching the floor. This gives the Rules Committee significant authority, ultimately deciding, on almost all of the bills, whether they die or go to the floor for a vote. Oregon also has a politically driven Rules Committee, but leadership only sends select bills there for review – or to wait until a political compromise is worked out behind closed doors. 

Washington’s Senate operates more like Congress: Washington has a lieutenant governor, who presides over the Senate but only can vote in case of a tie, much like the vice president. Washington’s lieutenant governor is elected separately from the governor and serves with no term limit. Oregon doesn’t have a lieutenant governor. The independently elected secretary of state is next in line, as we saw last year when Gov. John Kitzhaber resigned and Secretary of State Kate Brown replaced him. Oregon’s Senate selects its own presiding officer from its membership, who votes on all bills just like his or her colleagues.

Floor amendments are permitted in Washington, but not in Oregon: Washington lawmakers can and often do offer floor amendments. On the day I visited, a public school bill that had been jerked to the House floor without going through the Rules Committee faced a floor debate over 27 separate amendments. After a lengthy debate, eight amendments passed, including one that replaced the entire original bill. Oregon lawmakers can petition to have a bill pulled out of committee, but it rarely happens. Once a bill reaches the Oregon House or Senate floor, it is not subject to amendment. Lawmakers can defeat a bill, vote to send it back to committee or vote for or against a minority report, if one is approved in committee. Most of the time floor votes on “amendments” are stalling tactics in Oregon. Overall, the committees have more sway in the Oregon legislative system. 

Oregon gets out on time, Washington does not: In six of the last seven years, Washington has developed a habit of missing constitutionally established deadlines on the budget, forcing one or more special sessions each time. Again this session, the Washington Legislature fell short of reaching a budget agreement by Thursday at midnight and went into a special session almost immediately. Governor Jay Inslee vetoed 27 bills as punishment for not reaching a budget deal in time. The intention behind his actions is to stop the cycle of consistently late budgets.

In Oregon, experienced legislative leaders have been able to adjourn early, including in the shorter even-year sessions during which Oregon has 35 days compared to Washington’s 60 days to hammer out bills and adjust the budget. Washington, unlike Oregon, has tried to skate around a state Supreme Court ruling that the Legislature inadequately funds public schools, which puts knots in the budget process.

Seeing the differences between legislating in Salem and Olympia firsthand was insightful. It was a reminder that the intricacies of how a bill becomes a law can vary from state to state and from bill to bill, but it’s never quite as simple as the Schoolhouse Rock interpretation of how a bill becomes a law.

Oregon’s Running Start on Affordable College

Free college education has become a campaign slogan in the 2016 presidential election, but Oregon has gotten a running start with the first class of high school seniors facing a deadline next week to apply for the Oregon Promise.

Free college education has become a campaign slogan in the 2016 presidential election, but Oregon has gotten a running start with the first class of high school seniors facing a deadline next week to apply for the Oregon Promise.

Oregon has gotten a head start on the challenge of free college education, with a deadline next week for high school seniors to apply for the new Oregon Promise program, which guarantees a “free” two-year education at a state community college.

According to state financial aid officials, more than 12,000 Oregon high school students have signed up, with the total expected to go higher by next Tuesday. That’s when students must have filled out their online application, submitted high school transcripts to show they have a 2.5 grade point average or better and completed a financial aid application. 

In the first year of the program, an estimated 7,000 Oregon Promise applicants are expected to enroll, which would push up the percentage of high school graduates who move on to college in the state. 

Senator Mark Hass, D-Beaverton, won legislative approval for the program because of its market appeal to students from lower income households and its relatively small cost. As The Oregonian’s Betsy Hammond has pointed out, many Oregon Promise applicants already would have qualified for financial aid that covered virtually all of the cost of tuition at a community college.

Even so, Hass says the program entices students to apply who might otherwise have not even bothered. Going to community college allows most students to stay at home and continue jobs they had in high school.

Eligible Oregon Promise students will be required to take a full course load and maintain a good grade level. They can take courses needed to move on to a four-year degree-granting institution or to earn an industry certificate. Hass modeled his program after one in Tennessee, which he says has increased enrollment at both community colleges and four-year colleges and universities.

The Oregon College Savings Plan allows for student accounts that can accept contributions from parents, grandparents or other relatives and realize tax-free earnings when they use the money for college tuition.

The Oregon College Savings Plan allows for student accounts that can accept contributions from parents, grandparents or other relatives and realize tax-free earnings when they use the money for college tuition.

Another Oregon program is helping college students hold down debt. The Oregon College Savings Plan, which began in 2001, now has more than $1.2 billion in assets spread over 86,000 student accounts. More than $170 million was contributed to Oregon College Savings Plan accounts last year.

Students are able to draw on their account to pay for tuition and other qualifying educational expenses when attending college or an accredited technical school. Oregon offers a tax deduction for contributions up to $4,600 for married taxpayers filing jointly or $2,300 for single filers, but tax-free earnings are the real advantage when the funds are withdrawn for qualifying college expenses.

Not every household has the cash to contribute to the plan. However, student accounts can accept contributions from more than parents. Oregon College Savings Plan officials point out that whatever money can be tucked away for a student is money they won’t have to borrow in the future when they attend college.

Assets in the plan are subject to investment cycles, so there is an element of risk. Many savings plan account holders saw their nest eggs shrink when the housing bubble burst in 2006-2007 and the subsequent financial industry meltdown. Oregon officials replaced the plan’s financial partner and overhauled the program to provide greater protection for student account holdings.

It’s worth noting that 36,000 Oregon college students received $57.3 million in need-based Oregon Opportunity Grants in the 2014-2015 academic year. Another $69 million in student aid will be distributed to qualifying Oregon students this year. Grants of $2,100 are available for full-time, full-year students at eligible Oregon postsecondary institutions.

Oregon has lagged other states in providing need-based student aid, but in recent legislative sessions has stepped up expenditures. The 2015 legislature authorized $140.9 million for Oregon Opportunity Grants, which was almost a 24 percent increase over the previous biennium.

Bates Calls Out 'Lying' Lobbyists

Senator Alan Bates called out unnamed lobbyists today, saying they lied to him to kill a bill in the short 2016 legislative session. He vowed not to listen to the lobbyists in the future.

Senator Alan Bates called out unnamed lobbyists today, saying they lied to him to kill a bill in the short 2016 legislative session. He vowed not to listen to the lobbyists in the future.

The comment probably won’t be reported in news accounts about the 2016 legislative session, but it will reverberate on the walls of the state Capitol in Salem, as it should.

Senator Alan Bates, D-Ashland, began a hearing today by noting that “four or five” unnamed lobbyists had intentionally misled or lied to him in an attempt to kill a bill in the short 35-day session. Bates said it was the first time in 16 years in office he had encountered that kind of unprincipled lobbying and vowed not to listen anymore to at least two of the lobbyists.

Here’s Bates’ entire statement:

"Something has happened during this short session that in my 16+ years that I've never seen before, and I've been through maybe 20 sessions, counting special sessions. Members of the lobby have been coming to us at the very end of the time a bill should be discussed trying to sow confusion, there have been half-truths, sometimes outright lies trying to kill a bill. I'm very disappointed in lobby members who have done this, and I've got a list of four or five of you out there. This is disingenuous.

"This building runs on integrity, and if you can't have any integrity and try to come in and kill bills that way, the system won't work well and, in fact, ultimately, you won't be listened to anymore. There are two lobbyists out here that I'm going to have a conversation with after this session that I will not listen to anymore. They've lied to me on several occasions and other members have been telling me the same thing in other committees. So this practice of coming at the last minute, trying to kill a bill by being disingenuous, by lying about the bill, by trying to confuse people is something that we would like to see stop – at least I would… .

"If you think you can continue to do this, I don't believe you're going to be successful and I'm very disappointed in the lobby for having done this. And those of you out there who have done this, know who I'm talking to you. And those of you who have been honest and straightforward with us, I hope you understand I am not talking to you."

Oregon’s professional lobby corps prides itself on a longstanding code of ethics that includes telling the truth. Legislators are no strangers to bare-knuckled advocacy and passionate pleas, but lying is supposed to be out of bounds. Veteran Oregon lobbyists are usually the umpires who throw the flag when a colleague violates that principle.

Lobbyists, like everyone else, can make mistakes or cite incorrect data. In Oregon, they have an obligation to correct errors and acknowledge misstatements. It can be awkward and even embarrassing, but that is a small price to pay to keep Oregon’s legislative discourse as civil, fair and fact-based as possible.

There always have been lobbyists who treaded the edges of this rule, and there has been a long line of lawmakers who have called them on  it. Bates is the latest, but he is not the first, nor will be be the last. His punishment is the correct one – deny access to lobbyists who fudge the truth. Without access to key legislators, a lobbyist is useless.

The main quality lobbyists should advertise is their integrity. Lawmakers will listen to lobbyists they trust, even they if disagree with them.

When lobbyists feel pressure to pass or kill legislation that causes them to dissemble, it is time for them to take a time out or look for a new line of work. Passing legislation is hard enough and sufficiently frustrating without the burden of dealing with half-truths or outright lies.

What if Oregon Voted First

The 2016 presidential sweepstakes may have a very different complexion – and different winners – if voting started in Oregon rather than Iowa.

The 2016 presidential sweepstakes may have a very different complexion – and different winners – if voting started in Oregon rather than Iowa.

Oregonian columnist David Sarasohn wondered aloud over the weekend how the presidential sweepstakes would differ if the first voter test was in Oregon instead of Iowa. It is a fascinating question. And it is not ridiculous to believe Oregon should have the honor of voting first since the state invented the idea of presidential preference voting in 1910. 

If the first test of presidential timber was in Oregon, chances are good early momentum in the race would go to candidates known for being more practical and less ideological, even if the ultimate party nominee would be unchanged.

For example, in the contested 1964 GOP primary, New York Governor Nelson Rockefeller captured Oregon, defeating eventual nominee Barry Goldwater. In 1968, Robert Kennedy picked up momentum in Oregon, even though he lost to Eugene McCarthy, that vaulted him to victory in the California primary. Kennedy may have gone on to win the Democratic nomination, and perhaps defeated Richard Nixon, if not for his election-night assassination in Los Angeles.

In the past three Iowa caucuses, Hawkeye state Republicans have given the edge to Mike Huckabee (2008), Rick Santorum (2012) and Ted Cruz (2016). All three were the favorite of Christian evangelicals. In a relative unchurched state such as Oregon, Sarasohn speculates none of the three might have gained as much political traction as they did in Iowa. Neither Huckabee nor Santorum rode their Iowa caucus victories to much further electoral success and Cruz is already facing strong headwinds in New Hampshire, where Republicans view themselves more as a constituency than a congregation.

The Republican tradition in Oregon has centered on conservative pragmatism. Vic Atiyeh, the last GOP governor in Oregon, tried to make state government more efficient, not make it smaller. Republican lawmakers in Oregon today battle against many tax increases and additional regulations, but they generally avoid fighting culture wars over contentious social issues. They fiercely defend gun rights but rarely talk about their personal religious views.

Ohio Governor John Kasich and former Florida Governor Jeb Bush are perhaps the best matches in the 2016 GOP presidential field for Oregon’s Republican constituency. Kasich was an also-ran in Iowa, but appears to be gaining some momentum in New Hampshire, which like Oregon puts some value on experience and pragmatism. Bush, who has conducted a clumsy campaign, is lagging in the polls, but you could imagine he might have gotten off to a stronger start if the first vote occurred in Oregon rather than Iowa.

Cruz, the Iowa winner, had trouble with ethanol subsidies, a big deal for corn farmers. You can imagine the difficulty he would have had in Oregon coming to terms with voter-approved recreational marijuana and a burgeoning business sector to supply it.

Republican candidates also would have been tested this year by the occupation of the Malheur Federal Wildlife Refuge. They would have been unable to dodge questions about the illegal confiscation of federal property and simmering grazing rights issues.

In recent times, both the Republican and Democratic nominees have been coronated by the time the Oregon primary arrives in May. That may not be the case this year. Democratic frontrunner Hillary Clinton is facing an unexpectedly vigorous challenge from Bernie Sanders that could go all the way until this summer’s Democratic convention. If Oregon had voted first, Sanders may have carried away the victory, giving his looming landslide in New Hampshire tomorrow even greater weight.

As Oregon has become a more reliably blue state in presidential and statewide electoral voting, Oregon also has become more liberal on issues such as physician-assisted suicide, an issue that just popped up in New Hampshire. With virtually no military presence in Oregon and relatively few defense contractors, voting against going to war is a bipartisan pattern, from Senators Wayne Morse and Mark Hatfield to Oregon’s current Democratic congressional delegation. Rand Paul – who was the most dovish GOP presidential candidate until he ended his campaign over the weekend – might have found a more welcoming audience for his foreign policy views.

Oregon is one of the most trade-dependent states in the union and almost all of its congressional delegation supports free-trade agreements, which could have made it awkward for Clinton and Sanders to oppose the Trans-Pacific Partnership trade agreement negotiated by the Obama administration, at least without some stiff questioning.

Oregon Democrats and Republicans have a record of nominating and electing women to high office, which Iowa only recently embraced with the election of Joni Ernst to the U.S. Senate. Clinton might have found an edge in soliciting the active support of Governor Kate Brown, Attorney General Ellen Rosenblum, former House Majority Leader Val Hoyle and candidate for secretary of state and current House Speaker Tina Kotek, all of whom will be in the 2016 ballot, too.

The Republican candidate who earned the endorsement of Congressman Greg Walden, who represents Oregon east of the Cascade Range – and who contracted for the best helicopter service – may have had the clear advantage. Walden was a close ally of former Speaker John Boehner who was forced out by conservative Tea Party House members.

Caucus winners in Iowa generally are the candidates with the best ground game and who press the flesh. Cruz appeared in every Iowa county. So did Barack Obama in his startling political arrival in 2008. Oregon is bigger and its rural, red-leaning voters are harder to canvass. However, Democratic candidates can campaign pretty much along I-5 from Portland to Eugene, giving them a logistical edge, but not anything requiring the same kind of retail politics that Iowans demand.

Iowa Democrats are found largely in cities with universities and industry with organized labor. Iowans may not be as hip as Portlanders view themselves, but they aren't mugwumps, either. They produced a virtual dead-heat between Clinton and Sanders.

It does make you wonder what the outcome would have been if Hillary and Bernie had to impress Oregon Democrats first. It does make you wonder whether Republicans Lindsey Graham or Rand Paul would have dropped out before or after the Oregon primary.

What if…

Gary Conkling is president and co-founder of CFM Strategic Communications, and he leads the firm's PR practice, specializing in crisis communications. He is a former journalist, who later worked on Capitol Hill and represented a major Oregon company. But most importantly, he’s a die-hard Ducks fan. You can reach Gary at  garyc@cfmpdx.com and you can follow him on Twitter at@GaryConkling.

“Emergencies” Top Short Session Docket

Senate President Peter Courtney helped to convince Oregonians to approve annual sessions and now presides over a 35-day session packed with legislative “emergencies."

Senate President Peter Courtney helped to convince Oregonians to approve annual sessions and now presides over a 35-day session packed with legislative “emergencies."

The strains of a short even-year legislative session sprouted on day one as Republicans in the Oregon House and Senate demanded each of the 260 bills introduced be read aloud word by word.

The message sent by GOP lawmakers is that a 35-day session is too short to consider legislation raising the minimum wage, altering corporate taxation, addressing affordable housing and adopting a pair of far-reaching energy bills.

Those measures are on the legislative docket as a last-ditch effort to keep the issues they raise off the November ballot.

Oregon’s election-year annual session has evolved into a different, though perhaps inevitable role from its original conception. Senate President Peter Courtney, who led the push for annual sessions, sold the plan as a way to update the state’s biennial budget, pass minor legislative fixes and deal with emergencies that couldn’t wait.

Emergencies that can’t wait now apparently include blockbuster ballot measures that would raise the minimum wage as high as $15 per hour, slap a gross receipts tax on large corporate taxpayers and force Oregon utilities to ditch coal-generated electricity.

Senate Republican Leader Ted Ferrioli tweaked Courtney’s memory of the purpose of the short even-year legislative session by saying, “As I recall, Oregonians were sold on the idea of annual meetings with the promise that the ‘short session' would focus on balancing the budget, making small legislative ‘fixes' and responding to emergencies that need immediate attention.  I'm sorry to report that the 'short session' has become little more than a setting for the majority party to pursue an over-reaching agenda of tax increases, regulation and ideological issues dear to the progressives who rule Portland and to a great extent, the rest of Oregon.”

The last part of Ferrioli’s statement reflects his underlying opposition to all of the heavy-duty legislative proposals that are on the table thanks largely to Democratic-leaning activists. The exception is the coal-to-clean bill that was negotiated by utilities and environmental groups.

Governor Brown has offered an alternative minimum wage proposal and Senator Mark Hass, chair of Senate Finance, is proposing a scaled down corporate tax measure.

While those high-profile issues command attention, other significant legislation has been introduced to address marijuana industry regulation, gun sales, processing of rape kits and a few bills that didn’t make it out of the longer 2015 legislative session.

The racer-fast pace of a short session – if a bill can’t get a hearing, markup and a vote in the first two weeks, it is basically dead – provides plenty of fodder for skeptics. House Republican Leader Mike McLane said one-hour notice for a hearing on a major bill doesn’t allow enough time from someone from Eastern Oregon to show up to testify.

In the end, emergencies are in the eye of the beholder. For many Portland-area legislators, for example, the growing housing affordability problem in the city has elevated to a crisis that requires a legislative response. Their proposed response, which requires construction of affordable housing and puts limits on evictions of renters, may not seem so urgent in other parts of Oregon.

Tax Reform, Affordable Housing Top Readers’ 2016 Policy Priority List

Affordable housing is top of mind for many Oregonians heading into 2016. In September, Mayor Charlie Hales declared Portland had fallen into a housing crisis. The announcement helped set the stage for difficult state-level discussions about how to solve the problem. 

Affordable housing is top of mind for many Oregonians heading into 2016. In September, Mayor Charlie Hales declared Portland had fallen into a housing crisis. The announcement helped set the stage for difficult state-level discussions about how to solve the problem. 

We asked about top 2016 policy priorities, and you answered. The two most mentioned policy priorities were tax reform and affordable housing. A transportation funding plan and changes to the Public Employee Retirement System (PERS) also drew mentions.

As expected, when we asked about leadership, most comments zeroed in on Governor Kate Brown and her role in making needed changes, even as she faces election this November to complete the last two year’s of John Kitzhaber’s term.

Here are some highlights from what you told us.

Tax Reform

Jan Lee, a former state representative from Clackamas County and lobbyist, said it’s again time to explore a sales tax in Oregon. “We need a sales tax with some compensating features to reduce income or property tax a bit so that we have a system that fares better in all economic climes,” Lee says. 

While Oregon’s employment figures have shown strong growth over the past year, incomes have largely remained stagnant. But Lee believes changing the state’s tax system while raising the minimum wage could be enough to spur creation of higher paying jobs across the income spectrum.  

“The legislature can raise the minimum wage; if not one of this fall's ballot measures can achieve that result,” she says. “Maybe instead of some of the other tax credits now made available, there could be more tax breaks that businesses can earn by providing higher paying blue collar and white collar jobs to drive our economy and meet families' needs.”

“As always, close coordination with the Governor's office and open communication between the two party caucuses sets up a better opportunity for leadership to bring people together,” Lee explains. “Consensus is not expected, but achieving a little higher majority on important issues makes the system more workable.”

Tom Wilson, vice president of Campbell & Company, said it’s time to put the clean fuels bill approved during the 2015 Oregon legislative session and a proposed 10-cent per gallon gas tax back on the table. That’s just the start of a series of changes Wilson envisions for Oregon’s tax system, which he says will require top-down leadership.

“Governor Brown needs to lead the charge on this by reminding all the Multnomah County Democrats and Tina (Kotek) that there is actually another part of Oregon that needs to be served,” Wilson says. “Start to fix PERs by requiring members to contribute to their retirement like the rest so do. Do not allow the unions to jam through another tax on corporations.”

Affordable Housing

Four months ago, Mayor Charlie Hales declared a housing crisis in Portland, and news stories continue to surface about Oregonians struggling to keep up with skyrocketing rents and day-to-day housing costs. So, it’s no surprise that affordable housing is top of mind.  

Chris Vetter of  the Vetter Group and Don Mazziotti,  the former head of the Portland Development Commission and now a Portland-based management consultant, listed housing as their primary concern for Oregon in 2016.

“We need more affordable apartments and opportunities for urban professionals,” Vetter says.

Mazziotti says Oregon lawmakers should focus on easing the financial burden on homeowners and renters across the state.  

Jim Standring, president of Tigard-based Westland Industries, took another angle, suggesting lawmakers approach the affordable housing crisis with an eye toward improving Oregon’s land-use laws. 

“Oregon's land use system is totally broken and needs significant change,” Standring says. “Concerns about affordability and homeownership will continue to suffer without these changes.”

We hope you will keep talking to us about the priorities you want addresses in Oregon. We’re listening. 

Justin Runquist is CFM’s communications counsel. He is a former reporter for The Oregonian, The Columbian and The Spokesman-Review. Away from the office, he’s a baseball fanatic with foolhardy hopes that the Mariners will go to the World Series someday. You can reach Justin at justinr@cfmpdx.com and follow him on Twitter at @_JustinRunquist

What Matters Most to You in 2016?

As we head into a new year, CFM wants to know what policy priorities are most important to Oregonians for 2016. Lawmakers will convene a new legislative session in February, but they will only have 35 days to get their work done.

As we head into a new year, CFM wants to know what policy priorities are most important to Oregonians for 2016. Lawmakers will convene a new legislative session in February, but they will only have 35 days to get their work done.

From tackling Portland’s housing crisis to negotiating a plan for an unprecedented minimum wage hike, Oregon lawmakers have their work cut out for them in 2016.  

Education, health care, transportation, human services, consumer protection, environmental preservation, criminal justice, taxation: Those are just some of the priority areas calling for swift action and firm leadership in Salem as we look ahead to the next year. 

The Oregon legislature convenes February 1 for a brisk 35-day session. Soon after, statewide elected positions will be contested in the May primary and November general elections.

In the meantime, CFM wants to know what issues matter most to you. Is it finding more revenue for education and social services? Improving transportation infrastructure? Or maybe it’s something else entirely.

As we ponder the political battles ahead, CFM invites you to share what you believe demands the most attention from Oregon's elected leaders. Here’s what we’re looking for:

•  What are the top two policy priorities facing Oregon? 

•  For each of your two priorities, provide a short explanation of what you think should be done and how it should get done. Is legislation needed? Better enforcement? Bully pulpit leadership? Bipartisan support? Be as specific as you can.

•  In addition to your top two policy priorities, tell us what you expect in terms of leadership from Oregon's governor and from House and Senate leaders. What would you regard as real leadership? How can leadership be manifested so it produces positive results? What would you see as a lack of leadership?

Send us your submissions through Friday, January 8, and we’ll share them shortly after on our Oregon Insider blog.

This isn't a contest or a survey. Our intention is to reflect the range of thoughts and concerns that everyone shares with us. We will point out areas where a number of people's priorities overlap, but we also will include priorities that may generate only a single recommendation.

Please send your submissions to Justin Runquist, CFM’s communications counsel, at justinr@cfmpdx.com.

We look forward to hearing your thoughts.

A Voice of Refugee Reason

Frank Bauman, left, dining with his grandson, Tim. Bauman passed away in November. His sense of reason and open-mindedness is sorely missed as the U.S. debates whether to open its borders to Syrian refugees. Among his many achievements, Bauman is remembered for helping thousands of refugees during the Vietnam War find new homes in Australia. 

Frank Bauman, left, dining with his grandson, Tim. Bauman passed away in November. His sense of reason and open-mindedness is sorely missed as the U.S. debates whether to open its borders to Syrian refugees. Among his many achievements, Bauman is remembered for helping thousands of refugees during the Vietnam War find new homes in Australia. 

For Frank Bauman, refugees commanded compassion, not condemnation. What some saw as pariahs, he viewed as oppressed, stateless people who deserved a chance to live free from persecution.

Finding secure homes for refugees and shielding them from discrimination is the decent thing to do, the responsibility of civilized countries and quite possibly a Christian duty, according to Bauman.

Bauman’s view of refugees wasn’t cooked up in a kitchen debate. It came from a series of indelible life experiences, which included defending voting rights in Mississippi, assessing the damage of U.S. atomic bombs dropped on Hiroshima and resettling Indochinese refugees in Australia during the Vietnam War.

Wearing his favorite straw hat, Frank Bauman at Christchurch International Airport in New Zealand.

Wearing his favorite straw hat, Frank Bauman at Christchurch International Airport in New Zealand.

Bauman, a native Oregonian, Grant High School graduate and Yale-educated attorney, died Nov. 19 at the age of 94. His voice of experience would have been a welcome one in today’s shrill debate over Syrian refugees and Islamic faith.

How he reached his view of refugees is the story of his life.

While attending Stanford, where he majored in economics, Bauman enlisted in the U.S. Navy after the Japanese bombed Pearl Harbor. He understood what WWII was about, but chose to serve in ways that didn’t involve killing. He passed a rigorous aptitude test and was assigned to the Navy language school in Boulder, Colorado where he learned Japanese in a crash nine-month course.

Bauman’s job often involved interviewing captured Japanese soldiers. But he also spent time on the front lines and was part of the First Marine Division that stormed Peleliu in the Palau Islands. More than 6,500 Marines lost their lives in an intense two-month battle, which military historians said produced a U.S. victory with little strategic value and persuaded military leaders to adopt smarter strategies.

Hiroshima in the aftermath of the world's first atomic bomb deployed in combat on Aug. 6, 1945. The blast instantly killed about 80,000 people, wiping 90 percent of the city's population.  

Hiroshima in the aftermath of the world's first atomic bomb deployed in combat on Aug. 6, 1945. The blast instantly killed about 80,000 people, wiping 90 percent of the city's population.  

After atomic bombs were dropped on Hiroshima and Nagasaki and the Japanese surrendered, Bauman was chosen by Paul Nitze, who later would become the architect of major nuclear arms deals, as part of a 4-man team to survey the damage. The sight of so much devastation cemented Bauman’s conviction to further international understanding and promote global governance as an alternative to war.

Following the war, Bauman returned to Portland. He helped his parents with their Seaside motel, went to law school, got married and practiced law. He also took time to attend the University of London where he studied international law. He stepped away from his traditional law practice to become a volunteer in Mississippi to protect voter rights after passage of the Voting Rights Act in 1965.

Frank Bauman, right, in his role as Australia's chief diplomat to the United Nations. 

Frank Bauman, right, in his role as Australia's chief diplomat to the United Nations. 

Tiring of practicing law and influenced by swirling events, Bauman sought a job with the United Nations as its principal diplomat/administrator in Australia. With a political nudge from former Oregon Congressman Wendell Wyatt, Bauman landed the job and moved his family to Sydney in 1971.

During his five-year stint, Bauman oversaw the establishment of Papua New Guinea, a land where 700 dialects were spoken, as a sovereign state. His other principal job was to sponsor thousands of displaced Vietnamese as well as Croatian and Chilean refugees in Australia.

In those days, Australia wasn’t very diverse. It banned non-white immigration. Through persistent, respectful diplomacy, Bauman persuaded a newly elected Labour government to repeal the ban and accept thousands of Vietnamese refugees stranded on a small island in the Pacific.

Indochinese refugees fleeing their homeland by boat during the Vietnam War. Thousands of them found safety in Australia after Frank Bauman convinced the government to overturn a ban on non-white immigration.  

Indochinese refugees fleeing their homeland by boat during the Vietnam War. Thousands of them found safety in Australia after Frank Bauman convinced the government to overturn a ban on non-white immigration.  

An oral history provided by Bauman recounts how his advocacy on behalf of the refugees occurred as Australian sympathies for the Vietnam War soured. Bauman kept emphasizing that “wars create refugees” and civilized countries, especially ones involved in the wars, need to take responsibility to help victims of those wars.

Todd Bauman, Frank’s son who followed him into the practice of law, said his father, a Christian Scientist, believed helping refugees was the “Christian thing to do.” It wasn’t a condescending perspective. Bauman saw the world as a whole and his faith encouraged him to embrace that world and all of its people.

After his tour in Australia ended, Bauman returned to Portland, where he taught international law at Lewis & Clark College and served as president of the World Affairs Council of Oregon and the United Nations Association of Oregon. He and his wife travelled extensively, further expanding his world view.

Frank Bauman believed helping refugees was simply the "Christian thing to do," his son, Todd Bauman says.

Frank Bauman believed helping refugees was simply the "Christian thing to do," his son, Todd Bauman says.

As time passed, Bauman’s unique experience and personal commitment to refugee assistance slipped from public awareness. A voice with first-hand experience was never asked to speak when more strident voices called for banning Syrian refugees from American shores and even denying Muslims to come here.

Through his own eyes, Bauman saw the damage mankind can do to one another. He also saw the character leaders can exhibit. Bauman told of being aboard a creaky transport carrying 300 Japanese prisoners from the South Pacific to Honolulu. Bad weather slowed the journey and rations ran short. The ship’s commander issued an order that prisoners should receive priority for available food. He told his officers and men the prisoners were in their charge and were their responsibility to treat with respect.

It was an order and a life lesson Bauman took to heart.

The Risky Business of Government Risk-Taking

Risk-taking in government can be risky, as the authors of the Cover Oregon fiasco discovered.

Risk-taking in government can be risky, as the authors of the Cover Oregon fiasco discovered.

Government risk-taking is risky business. If government officials take a policy or program risk and it flops, they are criticized for wasting taxpayer money. If officials avoid taking a risk and a problem festers, they also get criticized for wasting taxpayer money.

Dick Hughes, editorial page editor for the Statesman Journal, says risk-taking is a good idea for government. "If we want government to succeed at a higher level, we must be willing to tolerate failures," Hughes said. "That sounds counter-intuitive, but most great leaders also have a string of failures – ones from which they learned.” 

That sounds good in theory, but maybe less so in practice. In many ways, the deck is stacked against government risk-taking. My 15 years in government service says no risk-taking, however successful, goes unpunished.

It is hard to quarrel with brickbats aimed at foolish risk-taking such as Cover Oregon's over-reaching attempt to build a health insurance exchange website. Other risk-taking, especially the kind that might take a while to prove out, still earns "gotcha" reporting in the media. Many public managers, who are no fools, quickly grasp the odds are low for risk-taking in government that earns kudos.

There is room for reasonable risk-taking in government, but it requires planning, strategy and discipline, not taking a spin on a roulette wheel. Here are some suggestions based on my experience:

•  The risk should result from a consensus. Even good ideas get better when a diverse team vets them and frontline people have a chance to suggest them. When I worked as part of the Executive Department's management team under Fred Miller, we launched the "Good Ideas Program" (we couldn't think of a better name), which encouraged fresh thinking and responsible risk-taking. None of the ideas were revolutionary, but many were very good and made a noticeable difference in program efficiency and effectiveness.

•  Risk-taking must be able to pass what I call the "front-page test." You should be able to make a cogent defense of the risk that would stand up in the light of front-page exposure. If an idea couldn't withstand that kind of public scrutiny, it probably isn't worth trying.

•  Reduce a bright idea to writing. The idea may sound good until you start laying it out on paper. When you write about an idea, you will think it through more clearly –  the rationale, the methods, the answers to tough questions and the results you can realistically achieve. If you can fill in those blanks, you probably have an idea worth considering and implementing.

•  Make sure someone is accountable for the good or bad. There will be plenty of people eager to crowd into the picture of a ribbon-cutting, but few willing to be seen on the podium explaining a failure. Make sure the risk has a clear chief risk-taker. Also make sure he or she won't be tossed to the wolves if there is a failure.

If lawmakers want public managers to take reasonable risks, they need to give them the elbow room to succeed or fail and not pounce on them if they fail. They need to accept some of Dick Hughes' advice and regard failure as a step toward ultimate success.

That may be harder to do for the news media, but at least reporters and editors can provide a context for risk-taking and explore lessons learned, not just scapegoats to blame.

Risk-taking will always be risky. That's why you need to do everything possible to make sure the benefits outweigh the risk and responsible risk-takers aren't skewered for taking risks.

[This blog was based on a post written by CFM Senior Partner Dave Fiskum for his personal blog, Perspective from the 19th Hole, and it draws on his extensive experience working for state government and as an Oregon lobbyist.]

 

A Closer Look at Oregon's Public Records Law

Gov. Kate Brown is seizing on an opportunity to explore public records law improvements. 

Gov. Kate Brown is seizing on an opportunity to explore public records law improvements. 

It's strange to imagine anyone feeling a sense of gratitude in pondering John Kitzhaber's tarnished legacy.

But somewhere down the line – after many years of healing and fading memories – Oregonians may actually thank the former governor for making one particular lasting difference for the better. At least that's the hope after Gov. Kate Brown recently commissioned a task force of lawmakers, lobbyists and an accomplished investigative reporter from The Oregonian to take a closer look at Oregon's public records law.

It was, after all, Kitzhaber's questionable dealings with his ever-puzzling fiancée Cylvia Hayes that served as the impetus for revisiting the law. Without the famous scandal that ultimately pushed him out of office amid a criminal investigation – and Kitzhaber’s attempts to block and delay the release of many telling emails – we honestly wouldn’t be at this point.

The crux of the issue is the question of where the balance lies between the public’s right to know what’s going on inside the government and our elected officials’ right to privacy.   

Of course, the whole situation is actually driven by the media. If Willamette Week reporter Nigel Jaquiss hadn’t dug into what was going on behind the scenes, the Kitzhaber stories may have never seen the light of day.

The task force is also getting started in a critical era for the media. As news organizations continue to struggle with dwindling staffs and shrinking ad revenue, the future of watchdog journalism looks less and less certain. With an ailing press, the propensity for undetected government corruption only grows, leaving the public out of touch with what their elected officials are doing.  

Kitzhaber’s story aside, maybe it was just time to take another look at the rules anyway. The Oregon Association of Broadcasters and the Oregon Newspaper Publishers Association argue we need to bring order to all of Oregon’s public and private record statutes.  

A report released this week from the Center for Public Integrity ranks the quality of Oregon’s ethics and public records laws 44th in the nation. Overall, that report handed Oregon an “F” in government accountability, directly referencing the Oregon Government Ethics Commission’s slow response to the Kitzhaber scandal.

It sounds bad, but the picture actually isn’t that simple.

Oregon has a basic public records law with an assumption that everything is public. In the strongest possible terms, all attorneys general in recent memory have advised state officials that they should assume all records are public and that they can be protected only if they qualify under one of the exemptions.

The law was created in 1973, and today it has more than a few dozen exemptions. Many of those are justified, of course, so don’t expect all of them to be stricken from the books. Trade secrets, records pertaining to pending litigation, evidence compiled in an open criminal investigation. All of that is exempt from disclosure under the law, and for good reason.  

But then one also has to wonder whether the law as it stands is to blame for why Kitzhaber and Hayes were able to keep their scandal under the radar so long.

If government officials want to keep records private, even in contravention of Oregon law, they can do so in a couple ways. They can stall on making records available, contending that it’s too time consuming to produce them. Or, they can charge too much for the task of retrieving the documents.

Charging a minor fee is legal under the law, but the size of the fee can become an obstacle. Metro, for instance, demanded KOIN pay about $17,000 for records in an investigation of the Oregon Zoo’s elephant facility. In some newsrooms, such a cost can be a deterrent to pursuing a story. 

The increased use of email systems in recent years has made public records issues far more complex since the law’s genesis 42 years ago. In fact, that hits at the central question of the investigation into Kitzhaber and Hayes: Did they use private email systems to conduct public business and then shield the emails from public scrutiny?  

As it turns out, news organizations have also played a role in complicating the public records issue. Occasionally, reporters make blanket requests for access to email records over a long period of time, which only adds to the government’s difficulty in complying.

Those are some of the biggest questions the task force will have to tackle in the coming year.

But of course, no matter where you stand on the question of the effectiveness of the law, there’s no denying that without a solid system of public access to government records, democracy suffers.

CFM Partner Emeritus Dave Fiskum contributed to this post.