Early Projections for Legislative Golden Gobbler Awards

A resolution to make marionberry pie the official pie of Oregon could be an early leader in the 2017 legislative session race to win the Golden Gobbler Award. But it has competitors, with more turkey bills to come.

A resolution to make marionberry pie the official pie of Oregon could be an early leader in the 2017 legislative session race to win the Golden Gobbler Award. But it has competitors, with more turkey bills to come.

The Golden Gobbler award is something Oregon legislators sheepishly accept, even if they really weren’t trying to win it.

The award goes to the most frivolous and gratuitous bill of each legislative session. Nobody’s career is helped or hurt by winning the lighthearted award (a frozen turkey), but the legislative community gets a good laugh and free beer when it is awarded.

Oregon,  My Oregon (revised)

“Land of the Empire Builders,

“Land of the Golden West;

“Land of Majestic Mountains,

“Fairest and the best.

“Onward and upward ever,

“Forward and on, and on;

“Hail to thee, Land of Heroes,

“My Oregon.

“Land of the rose and sunshine

“Land of the summer’s breeze;

“Laden with health and vigor,

“Fresh from the Western seas.

“Blessed by the love of Freedom,

“Land of the setting sun;

“Hail to thee, Land of Promise,

“My Oregon.” 

The 2017 legislative session, still only a couple of weeks old, has some strong Golden Gobbler contenders. Second-term Rep. Sheri Malstrom, D-Beaverton, may be the frontrunner with resolutions that would declare marionberry pie as Oregon’s official pie and change some of the lyrics of the state song, “Oregon, My Oregon.”

Oregon has a state dance (square dance), state bird (Western Meadowlark) and a state mushroom (Pacific Golden Chanterelle), so it’s not unreasonable to designate a state pie, especially made from a berry that is special to Oregon. Malstrom introduced House Concurrent Resolution 19 at the request of Shari’s restaurants, which is based in her district and has won many awards for its marionberry pies. Who doesn’t like a good pie.

Tinkering with the state song may be tougher to slice. Malstrom, who is a nurse, says some lyrical updates are warranted since there has been a lot of cultural and societal evolution in the 90 years since the song was enshrined as Oregon’s own song.

Her changes, written by Amy Shapiro, include replacing the phrase in the first verse, “Conquered and held by free men” with “Land of Majestic Mountains. In the second verse, “Blest by the blood of martyrs” would be replaced with “Blessed by the love of Freedom.”  Among those who may disagree are Senate President Peter Courtney, ever the traditionalist and one who often quotes the state motto, “She flies with her own wings.”

However, Malstrom doesn’t have a clear path to claim the frozen turkey. Here are other contenders, identified by the Portland Business Journal:

  • Senate Concurrent Resolution 4 that would designate the Border collie as the state dog (Senator Bill Hansell, at request)
  • Senate Bill 76 that defines unnamed combat sports and authorizes them to be regulated by the Oregon State Athletic Commission (Governor Brown at request of the Oregon State Police)
  • House Bill 2851 that requires use of headlights on cars when windshield wipers are in use or there is fog (Rep. Paul Evans)
  • Senate Bill 688 that permits outdoor race tracks in exclusive farm use zones for radio-controlled vehicles (Senator Fred Girod and Rep. Vic Gilliam, at request)
  • Senate Bill 556 that bans driving a vehicle with a dog or dogs on the driver’s lap (Senator Bill Hansell)
  • House Bill 2875 that imposes excise tax on ground beans and ground coffee to generate tax revenue for education (House Revenue Committee)
  • House Bill 2857 that could force karaoke bars to pay royalties for performances of copyrighted musical works (House Business and Labor Committee)

There is still plenty of time in the legislative session for new turkeys to spread their feathers.

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.

Freshman Rep. ‘Sobered' by the Work, Ready for the Challenge

 Freshman Rep. Rich Vial, R-Scholls, has started to let his constituents know he is settling in now that the 2017 Oregon legislative session has convened and what issues he is working on in the early days of a session that will grow more challenging as lawmakers figure out to address a $1.8 billion budget hole. Photo Credit: Tracy Loew / Statesman Journal

 Freshman Rep. Rich Vial, R-Scholls, has started to let his constituents know he is settling in now that the 2017 Oregon legislative session has convened and what issues he is working on in the early days of a session that will grow more challenging as lawmakers figure out to address a $1.8 billion budget hole.

Photo Credit: Tracy Loew / Statesman Journal

The first few weeks of any newly convened legislative session involve a lot of learning. For freshmen lawmakers, the learning process can resemble drinking from a fire hydrant. 

Freshman Rep. Rich Vial, a Republican who represents Sherwood and the surrounding area in Washington County, told constituents in his first newsletter since the session convened that his legislative work left him “sobered.” Thousands of bills have been introduced and hundreds of voices clamor to talk about those bills with lawmakers like him everyday.

“As an attorney, my role is to advocate for either a client or a cause,” Vial told his constituents. “As a legislator, my clients are the people of House District 26. My job is to make the best decision I can to help the people I represent.”

“Making an informed decision on any topic involves collecting information from a variety of sources, including constituents, interested groups and state agencies,” Vial says. “Given the amount of information that is presented to members of the legislature each day, I find that sorting through it all in order to make a good decision is an exciting challenge. There is much to learn and much more to do, and I am humbled by the awesome responsibility of serving as your State Representative.”

His newsletter also affirms what it means to be a citizen legislator. “On Sunday night – in the middle of the Super Bowl – my family and I were called away to retrieve a newly born calf and her mother from the middle of a muddy field that had been flooded with historic amounts of rain. In honor of the [New England] Patriots'
Win, we named the new little heifer Patty.”

 Rep. Vial, an example of Oregon’s citizen legislators, attends to a newborn calf caught in the mud on his Washington County ranch during Sunday’s Super Bowl game.

 Rep. Vial, an example of Oregon’s citizen legislators, attends to a newborn calf caught in the mud on his Washington County ranch during Sunday’s Super Bowl game.

Vial’s communication to his district is typical for most legislators who use newsletters to stay in touch back home after they head to Salem.

In his February 8 newsletter, Vial features legislation he cosponsored along with Democratic Senator Elizabeth Steiner Hayward of Beaverton to raise the legal age to use tobacco products from 18 to 21 years of age. He cites statistics indicating one of every three young smokers will die of a smoking-related illness, which has an impact on the state’s Medicaid budget and worker productivity. He predicted Tobacco 21 legislation, if enacted, would cut tobacco usage 12 percent.

As the legislative session wears on and lawmakers begin to confront more challenging issues, lawmakers like Vial will keep learning and sharing what he learns and thinks with his constituents. Before long, Vial and his colleagues will be explaining to their constituents how they think Oregon should address its $1.8 billion budget hole and what the impacts would be on schools, hospitals and public safety, as well as Oregon taxpayers. Those are newsletters bound to attract a lot of readership.

Vial founded a law firm in 1986 that now employs 100 people and represents clients in six states. He has been active in Washington County on a variety of community boards. He and his wife Paula have six children and have welcomed dozens of children into their home, including seven children who lived with them permanently as refugees from Vietnam.

Oregon’s Budget Crater Remains a Political Mystery

Legislative leaders who convened the 2017 session today are calling Oregon’s $1.8 billion budget hole one of the biggest challenges in recent years, but how to meet the challenge, balance the budget, grow the economy, preserve essential services and pass a transportation funding bill remain a political puzzle.

Legislative leaders who convened the 2017 session today are calling Oregon’s $1.8 billion budget hole one of the biggest challenges in recent years, but how to meet the challenge, balance the budget, grow the economy, preserve essential services and pass a transportation funding bill remain a political puzzle.

The 2017 Oregon legislative session convened today amid a torrent of newly introduced bills and an eerie silence on how lawmakers will cope with a $1.8 billion budget hole.

Senate President Peter Courtney says he doubts whether votes exist in the Oregon Senate to raise additional revenue or pass budget with deep spending cuts. “It’s a very bad situation,” he says. House Speaker Tina Kotek called the 2017 session “one of the most challenging in quite a few years.” However, identifying problems and agreeing on solutions are very different.

Legislative Republicans have named their price for considering additional revenue – changes to the Public Employees Retirement System and “pressing down the cost curves” of state programs. When commitments are made to pursue business-friendly policies to grow the statute’s economy and cut back on state government costs, House Republican Leader Mike McLane said, "Republicans will sit down and talk about revenue reform."

Republican leaders also have signaled a reluctance to work on a transportation funding package without lowering the low-carbon fuels standard adopted in the 2015 session. “I’m hopeful that the process [to develop a transportation package] this year won’t be hijacked by the left again,” said Senate GOP Leader Ted Ferrioli.

Clouding the state’s fiscal challenge are uncertainties floating across the continent from the nation’s capital in the form of turning Medicaid into a block grant program and possibly triggering a trade war with key Oregon international trading partners.  Both could have implications on the state’s budget in the 2017-2019 biennium.

Meanwhile, the political upheaval in Washington, DC generated by the new Trump administration, especially the President's immigration executive action, has served as a convenient foil to distract attention from Oregon’s policy and financial issues.

Governor Brown has focused on maintaining access to health care through Oregon’s expanded Medicaid program, passing a transportation investment package and addressing the state’s housing crunch. Her suggestion to permit rent control is likely to stir up lively opposition.

While Brown has expressed willingness to look at ways to bring revenue and spending into better structural alignment, she hasn’t offered a process or plan to do so. The governor has urged Oregon business leaders to bring a plan to Salem. Kotek asked business leaders to sit down with others to discuss how to achieve financial alignment. That has led to pushback from business groups and the news media urging political leaders to step forward with a plan – or at least a path to a plan.

The legislature has until early July to figure out what to do on the budget. The pressure is on now to figure how to do it.

Medicaid May Turn into a Block Grant Program

Converting Medicaid from an entitlement program to block grants to states could help fulfill GOP campaign pledges to repeal Obamacare and trim federal spending, but leave bigger holes in state budgets.

Converting Medicaid from an entitlement program to block grants to states could help fulfill GOP campaign pledges to repeal Obamacare and trim federal spending, but leave bigger holes in state budgets.

The first shoe to fall on the repeal of Obamacare dropped over the weekend as surrogates of President Donald Trump said Medicaid would be converted to a block grant program. Depending on details, that could be a bombshell financial event for states such as Oregon.

The rationale for converting Medicaid to block grants is that states already run the program and block grants will give them total freedom in how to structure their programs for lower-income individuals, children, seniors and disabled people. Or as Trump adviser Kellyanne Conway put it, state block grants would ensure “those who are closest to the people in need will be administering the program.”

That glosses over some of the anticipated repercussions of the switchover. As The New York Times reports, “Since its creation in 1965 (as part of the War on Poverty). Medicaid has been an open-ended entitlement. If more people become eligible because of a recession, or if costs go up because of the use of expensive new medicines, states receive more federal money.” A bock grant puts the burden of distributing a fixed amount of money on a population that is shifting and growing.

A key feature of Obamacare was the entice states to expand eligibility of Medicaid. Thirty-two states, Including Oregon and Washington, accepted the offer. Nineteen states didn’t.  More than 20 million people gain health insurance coverage under Obamacare. Half of them were through Medicaid expansion.

Some 550,000 people in Oregon and Washington were added to the Medicaid rolls under the expansion, which the federal government subsidized 100 percent from 2014 to 2016, but prospectively will scale down after than. Declining federal funding is partially responsible for $800,000 of the projected 2017-2019 biennial Oregon budget hole. A switch to block grants could deepen the hole and force Oregon policymakers to make even uglier choices. The Ways and Means co-chairs’ no-new-revenue budget would require lopping 350,000 Oregonians off Medicaid.

While some governors like the idea of more flexibility in administering Medicaid – for example, to impose a work requirement to qualify for coverage or charge Medicaid recipients a premium, others dread the advent of block grants. In an odd sort of justice, states that didn’t expand their Medicaid eligibility and forfeited additional federal funding could be losers if the block grant amounts are set at what states receive now, including money to cover expansion. That could turn states that supported Trump into financial losers.

Some governors worry what choices states would make – willingly or at the point of a budget sword – to squeeze Medicaid coverage into a fixed federal block grant amount. Colorado Governor John Hickenlooper predicted “impossible choices” between older citizens with chronic health care problems and children with diabetes who need insulin.

Conway said state block grants were the best way to fight Medicaid fraud and abuse, but health care industry officials say it is more likely to result to destabilize even further the health care of lower-income Americans and their families.

Making Medicaid block grants the poster child for Obamacare repeal is related to congressional ability to make spending cuts in the budget reconciliation process with only 51 votes in the Senate. The GOP-controlled Congress won’t be able to replace substantive Obamacare’s substantive provisions without 60 votes in the Senate.

Congressional Republicans may view Medicaid block grants as part of a larger plan to trim spending on entitlement programs and curb federal spending.

An interesting side note, a federal judge on Monday blocked the $37 billion merger of health insurance giants Aetna and Humana on antitrust grounds. Reports indicated Aetna threatened the Obama administration to pull out of the individual health insurance market in as many as eight states unless the merger was approved. 

Study Says Obamacare Repeal to Kill Jobs

 The GOP-controlled Congress is poised to redeem its campaign pledge to repeal Obamacare, but a Commonwealth Fund study says doing so could force states to pay a huge price in lost jobs, business output and tax revenue.

 The GOP-controlled Congress is poised to redeem its campaign pledge to repeal Obamacare, but a Commonwealth Fund study says doing so could force states to pay a huge price in lost jobs, business output and tax revenue.

Repeal of financial portions of Obamacare will result in substantial job losses, increased charity care at hospitals and leave more people without health insurance, according to a nonpartisan study conducted by George Washington University for the Commonwealth Fund.

Public and private job loss in Oregon could total 45,000 as early as 2019. Forty percent of the lost jobs would be in health care, but other sectors, including construction, retail, finance and insurance, also would suffer, the study finds. Lost jobs would translate into reduced gross state product and, ultimately, in lower state and local taxes, which could top $800 million between 2019 and 2023.

The major cause of job loss, according to the researchers, would come from repeal of federal premium tax credits and federal payments to states for expanding Medicaid eligibility. Nationally, as many as 2.6 million jobs could be lost in 2019, including in states that declined to expand their Medicaid eligibility. The study projects a $1.5 trillion impact on gross state product between 2019 and 2023, with a drop in business output of $2.6 trillion and a $48 billion decline of state and local tax revenue.

These estimates don’t take into account a replacement for the portions of Obamacare that Congress repeals, which could mitigate job losses and other negative impacts.

The underlying message of the Commonwealth Fund study is to rebut the “common misconception that the health reform law has been a ‘job killer.’ This study indicates that repeal of these policies, without sound replacement policies could cause major job losses and economic dislocation in every state.”

“While health reform repeal would dramatically increase the number of uninsured and harm access to health care, particularly for low- and moderate-income Americans,” the study authors said, “this analysis demonstrates that the consequences could be broader and extend we all beyond the health care system.”

Elizabeth Hayes of the Portland Business Journal reported the study findings came as Oregon Governor Kate Brown sent a 2-page letter to House Majority Leader Kevin McCarthy defending Obamacare.

“Discontinuing federal funding or shifting costs of health care reform from the federal government to states will put pressure on our ability to fund other critical services such as public safety, education and humans services,” Brown said. “And reforms that create uncertainty for patients, hospitals and insurance carriers will destabilize our insurance market and undermine our current our recent gains.”

Brown added, “We need to correct the shortcomings of [Obamacare], not dismantle it.”

Dropping patients from Medicaid is likely to force more people to seek uncompensated care through emergency rooms, which would increase hospital charity care. Hayes notes Oregon uncompensated care at hospitals dropped from $845 million in 2013 to $315 million in 2015. Higher levels of charity care put pressure on hospitals and health insurers to shift costs to private-sector payors.

More About Six Oregon Congressional Districts

Four of Oregon’s five congressional districts are held by Democrats. If Oregon gains a sixth congressional district after the 2020 Census, it might be difficult to create a truly swing district that a Republican, Democrat or political independent could win.

Four of Oregon’s five congressional districts are held by Democrats. If Oregon gains a sixth congressional district after the 2020 Census, it might be difficult to create a truly swing district that a Republican, Democrat or political independent could win.

Before the holiday break, we asked how Oregon could be divided to accommodate a likely sixth congressional district following the 2020 Census. We noted two widely different options.

The first option, floated by attorney Marvin Fjordbeck, is to make Oregon’s congressional districts more competitive. Currently, Oregon’s 1st (Washington County and Northwest Oregon), 3rd (Portland) and 4th districts (Eugene and Southwest Oregon) are solidly Democratic. The 2nd District, which covers most of Eastern Oregon, is solidly Republican.

The 5th District, which stretches from Clackamas County to the Oregon Coast, is the closest thing to a swing district now, but has recently elected Democrats, including current Congressman Kurt Schrader.

The second option, put forward in a December 26 editorial by the Register-Guard, suggests centering the new 6th District in Clackamas County and including enough rural areas to create a district that might be competitive for a Republican candidate to win.

The challenge with both ideas is that the population growth that will give Oregon a sixth congressional district is occurring in the state’s urban areas, which are typically more Democratic in their politics. Another problematic factor is the growing number of Oregonians who are unaffiliated with a political party or registered with a minor party. In fact, there could be some pressure to create a new district that someone registered as an independent could win.

To make all six Oregon congressional districts competitive would require splintering the Portland metropolitan area into at least four and possibly five districts. That could result in some funny-shaped districts that don’t conform to the rule of “coherent communities” within a single district. It also could raise complaints from Portlanders that their influence is being diluted and from non-Portlanders that Portland influence will grow even larger as population growth continues in the city and its suburbs.

Current congressional districts reflect an earlier consensus to center one of the five districts in Portland and two others in Washington and Clackamas counties, respectively. The other two districts represent the vast remaining stretches of Eastern and Southern Oregon.

Creating a swing 6th District could involve combining Clackamas and Yamhill counties into a single district or Clackamas County with rural parts of counties running along the east side of the Willamette Valley as far down as Lane or Josephine counties.

Another possibility would be to remove Bend and fast-growing Deschutes County from the 2nd District and combine it with Salem and Marion County. That could have the unfortunate byproduct of making the already sprawling 2nd District even larger.

An intriguing option that could mirror the Eastern Oregon “community" is a coastal district stretching from Astoria to Brookings. To make that work would require adding at least one inland urban center, which might be Corvallis since Oregon State University plays a role in coastal economies.

Redistricting, of course, doesn’t occur in a political vacuum. The task in Oregon falls to the Oregon legislature. If it fails to pass a plan, the responsibility moves to the secretary of state.

If redistricting occurred in the 2017 legislative session, Democrats would control both the Oregon House and Senate by solid margins. Newly elected Secretary of State Dennis Richardson is a Republican. But redistricting won’t occur until the 2021 Oregon legislative session, following the 2020 Census and the 2020 election. There is no guarantee Democrats will still hold their grip on the legislature through the next two election cycles or that Richardson will be re-elected in the 2020 election.

Redistricting involves lots of numbers and maps. It also involves personalities. Political partisans will be aware of who is itching to run for Congress and might be drawn in – or out – of a district accordingly. Those aspirants who often get the most consideration are ones who vie hard to have a seat at the redistricting table.

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.

Oregon Congressional Delegation Could Grow

One political expert says it’s a near certainty Oregon will add another congressional district after the 2020 Census and redistricting that will affect the 2022 election. Imagine along with us where a sixth congressional district would be on the map.

One political expert says it’s a near certainty Oregon will add another congressional district after the 2020 Census and redistricting that will affect the 2022 election. Imagine along with us where a sixth congressional district would be on the map.

If Oregon’s population keeps on growing, the state’s congressional delegation should grow from five to six.

Kari Chisholm of Blue Oregon makes a convincing case that a sixth Oregon congressional seat is a near certainty after the 2020 Census, which is the basis for reapportioning congressional seats among states.

Assuming current population growth trends continue over the next four years, Chisholm says Oregon’s “6th Congressional District” would rank #417, well inside the 435 seats in the U.S. House of Representatives. If reapportionment was done today, Chisholm says Oregon ranks #433.

Oregon came close to qualifying for a sixth congressional district in the last Census in 2010. However, the recession hit Oregon hard and its population growth tailed off. Oregon’s 6th congressional district ranked #442, Chisholm said.

A sponsor of lots of political punditry, Chisholm suggests it isn’t too early to imagine how a sixth congressional district in Oregon would be configured – and who it might benefit. We’ll take the bait and ask Oregon Insider readers to offer up their maps, even if they are scrawled on napkins.

There are a few rules:

  • Districts should be compact.
  • Districts should stick as closely as possible to city and county lines.
  • Districts should be drawn to recognize community interests.
  • Districts shouldn’t be drawn to isolate any particular group of people to a single district or split them up into several districts.

Send us your redistricting map and names of who you would like to see go to Congress to represent Oregon, expanding on the state’s current congressional representatives. We’ll post what you send after the first of the year.

Tax Debate Starts with Sides Far Apart

Oregon voters rejected a corporate receipts tax in Measure 97, but backers of the initiative unveiled a modified version of the tax measure that leaves the sides on Oregon’s looming budget battle as far apart as they were during the campaign over Measure 97.

Oregon voters rejected a corporate receipts tax in Measure 97, but backers of the initiative unveiled a modified version of the tax measure that leaves the sides on Oregon’s looming budget battle as far apart as they were during the campaign over Measure 97.

Combatants in the Oregon tax debate will come to the 2017 legislature in February with positions far apart after the coalition that backed voter-rejected Measure 97 fired its first shot with a modified version of its tax plan.

Business leaders at the annual Oregon Business Summit signaled a willingness last week to discuss a tax hike in return for commitments to cut spending, in particular for the Public Employees Retirement System. Union-backed Better Oregon made no mention of PERS in unveiling its tax proposal this week.

In addition to tweaking Measure 97 provisions, Better Oregon threw in a health care provider tax aimed at hospitals and other health care professionals. That increase is intended to buttress state funding for the Oregon Health Plan, Oregon’s Medicaid program, which faces its own budget challenge as federal support for expanded coverage ratchets down.

The canyon-wide divide between the two sides is not surprising and perhaps even predictable. They have been battling for the past year over Measure 97, which supporters said would raise revenue to make Oregon’s budget sustainable and opponents claimed would dampen Oregon’s economy as the tax trickled down to consumers. Neither side believed defeat of Measure 97 meant the end of the war.

The modifications proposed by Better Oregon respond to criticisms that gained traction in the most expensive ballot measure campaign in the state’s history. The gross receipts tax was reduced from 2.5 percent to 2 percent and applied to all corporate entities with more than $100 million in sales in Oregon as opposed to $25 million in sales in Measure 97. Observers said that should relieve corporations such as Powell’s Books from paying the tax directly. The new plan exempts utilities, which said the tax would win up affecting electric and natural gas rates for lower income Oregonians. Projected revenue from the new plan would be $2 billion per year other than the $3 billion expected to come under Measure 97.

The changes are unlikely to satisfy business interests, whose spokesmen expressed incredulity at the reworked tax proposal, noting Measure 97 was defeated by a lopsided 19 percent margin in the November election. Proponents charged back that significant new revenue is needed to cover the state’s commitments to quality public education, access to health care and public employee retirement.

Several health care organizations were significant contributors to the campaign to defeat Measure 97 and under the revised plan have even more at stake. The Oregon health care industry has agreed to a 5.3 percent provider tax that enables the state to qualify for federal matching funds. This carefully negotiated and legislatively approved funding scheme is connected to Oregon’s Coordinated Care Organizations, which were established to improve the quality and cut the cost of health care for low-income Oregonians. Better Oregon wants to expand the tax and who pays it to include dentists, chiropractors, managed care organizations and ambulatory service centers with the goal of raising an additional $1 billion per year.

Advocates of any tax increase face the challenge of needing at least one and probably more Republican votes to meet the three-fifths threshold for passage. Democrats don’t have a supermajority in either the House or Senate in the 2017 session.

Governor Brown, who won the election in November to fill the remainder of John Kitzhaber’s term, must face re-election in 2018 for a full four-year term. In an abrupt moment at the Oregon Business Summit, Brown told business leaders they need to bring a credible tax and spending plan to Salem. She said a plan based on PERS cuts was dead on arrival.

The incoming Trump administration could play an inadvertent role in the Oregon budget debate. Assuming the GOP-controlled Congress follows through on its pledge to repeal Obamacare and makes funding changes in the way expanded Medicaid services are supporters, Oregon’s $1.5 billion-plus budget hole could deepen.

It may take a while before both sides, which are now standing on opposite sides of a gaping divide, find a way to sit down together and talk compromise. At the moment, neither side has a lot of motivation to take the first step toward a compromise with a chance of making it through legislative hoops and the governor’s desk. Chances are good this is a discussion that could extend to the end of the 2017 session – and possibly even extend it past a July adjournment date.

Sustainable Budget Turns on Significant PERS Reforms

Oregon may never get its revenues and spending in sustainable alignment until it figures out how to manage the cost of the Public Employees Retirement System.

Oregon may never get its revenues and spending in sustainable alignment until it figures out how to manage the cost of the Public Employees Retirement System.

Oregonians cannot possibly pay enough in taxes to keep their state and local governments afloat.

Government costs are rising far faster than government revenues. Even if massive state tax increases were enacted, such as the one envisioned in Measure 97 that voters defeated last month, government spending eventually would outpace the added revenue.

One reason is that the Oregon Health Plan (OHP) will get less money from the federal government, so the state either has to pay for that insurance coverage itself or lop thousands of low-income Oregonians off the plan. That difficult choice is further complicated by not knowing how far President-elect Donald Trump will go in slashing Medicaid, which funds OHP, as he goes about undoing Obamacare.

But the greater, systemic issue is the still-uncontrolled cost of Oregon’s government pension program, PERS. Governors, legislators and voters have made significant reforms to the Public Employees Retirement System since the 1990s, but many were overturned by the Oregon Supreme Court.

PERS costs are projected to grow more than three times faster than state revenues during the next several budget cycles. Those PERS liabilities will keep growing regardless of how the Oregon economy does. And when the economy falters, that means lower income tax collections to run state government and schools … and to pay the expanding PERS bill.

No matter what anyone claims, that trend is financially unsustainable for Oregon. The state must get its expenses and its revenues in line with each other.

As one longtime government-watcher said, “The unfunded liability eats at every level of government and it reflects promises made by legislators past that haunt legislators in the present – and in the future, unless a solution is reached and sustained.”

There are reasonable, legal ways of slowing that trend without going overboard. Meanwhile, business leaders appear open to accepting some tax increases in return for those PERS reforms. That is a compromise that the state’s political leaders should embrace … and lead.

In the proposed 2017-19 state budget that Governor Kate Brown released Thursday, she calls for maintaining the current Oregon Health Plan, while adding an estimated 13,000 to 15,000 children, so that every eligible child would have health care.

But Brown’s budget keeps the status quo for PERS, paying those soaring costs and not resolving them. That drew a strong response from the Oregon Business Association, which pledged to examine “the unsustainable cost drivers in the budget.”

As governor after governor has learned, it’s the legislature that actually writes the state budget. Brown’s political strength as governor will be reflected in how much of her proposal the 2017 legislature keeps intact.

Meanwhile, the political mood for resolving Oregon’s budget dilemma is not good.  The fight over Measure 97 – backed by public-employee unions and opposed by business – left deep scars. But civil discussions – testing leaders’ ability to set aside election-year animosities – need to happen before the Legislature convenes early next year.

The 14th Oregon Leadership Summit on Monday offers a hopeful start. More than 1,000 public- and private-sector leaders from throughout the state will gather in Portland. They will talk about how to strengthen the economy. They will discuss ideas for increasing government revenue – nothing is off the table, although a traditional sales tax is unlikely and a reprise of Measure 97 would be unacceptable. And they will look at how to control government costs.

Then comes the even harder part. Oregon’s political leaders, starting with Governor Brown, must take the initiative. It is their responsibility to ensure that Oregon gets control of its expenses, including PERS.

It makes no sense that state revenues will increase by more than $1 billion during 2015-17, yet the state faces a $1.7 billion shortfall unless programs are reduced and/or taxes are raised.

Dick Hughes, a freelance journalist specializing in Oregon government and rural/urban issues, has 40 years’ experience as an Oregon journalist and was the longtime editorial page editor, writing coach and Sunday columnist for Statesman Journal Media in Salem. Contact him at TheHughesisms@Gmail.com or Twitter@DickHughes. 

Medicaid Spending Could Be Oregon Budget Lynchpin

Oregon officials a major budget hole, which could get unpredictably worse depending on what the Trump Administration and a GOP Congress comes up with to replace Obamacare and its expansion of Medicaid coverage.

Oregon officials a major budget hole, which could get unpredictably worse depending on what the Trump Administration and a GOP Congress comes up with to replace Obamacare and its expansion of Medicaid coverage.

Governor Brown unveiled her recommended budget today, with the gloomy prospect of a $1.4 billion budget shortfall to overcome. However, what may haunt her budget more than anything else is the unknown impact of decisions on health care by the incoming Donald Trump administration.

Brown can’t count on a big pot of new revenue after voter rejection of Measure 97 and she knows the Public Employees Retirement System impact on spending looms large. What she or no one knows for certain is how the anticipated repeal of Obamacare, including funding for a major Medicaid expansion, will impact state budgets.

States that expanded Medicaid eligibility under Obamacare and received federal funding to cover a big chunk of the cost already face the reality of a federal funding phase down, putting more pressure on state funding. If the Medicaid expansion subsidies under Obamacare go away, the big question is what, if anything, will replace them.

Congressional Republicans, including Congressman Tom Price, R-Georgia, who will become secretary of Health and Human Services under President Trump, have argued for block grants to states. They say block grants give states more flexibility in managing their Medicaid programs. But that doesn’t mean the block grants would be large enough to patch the budget hole left by repealing Obamacare Medicaid subsidies. The funding difference could aggravate the existing $250 million+ hole to pay for expanded Medicaid enrollment.

Obamacare repeal also would potentially eliminate the individual health exchange. Republicans are talking about replacing the Obamacare mandate with tax incentives to encourage uninsured people to take out their own health insurance. Depending on whether the provision regarding pre-existing conditions is maintained or qualified, some people – for example, people with chronic diseases such as diabetes –  could find themselves priced out of the market. That might be politically untenable and ethically suspect to leave what could be a significant cohort of people dangling in the wind without any health insurance.

While repeal or alterations of Obamacare seems like a given, when a replacement will be agreed to is less certain. That could mean the Oregon legislature – as well as legislatures across the country – could be wrapping up their budgets while Congress is still deciding on how to replace Obamacare provisions.

Whatever one thinks of Obamacare as ealth care policy, one fact is indisputable – its provisions are interdependent. Pull a string here and something unravels over there. That’s especially true regarding budgetary impacts. Brown said in her budget message she would protect funding for Medicaid patients “without reducing eligibility or the level of services required.”

While it’s true many health insurers have abandoned the individual health insurance market, it’s not a certainty they will rush back under a new plan, especially one that may not have any more market power than the Obamacare approach. 

These gives and takes have broader implications, but in the short term they pose serious problems for Oregon policymakers who must pass a balanced budget. Adding insult to injury, the federal government under a new administration may push for a cut of the Oregon settlement with Oracle over the Cover Oregon fiasco. So far, Oregon has offered used Oracle servers.

Familiar Players and Policy Choices

Cutline: Governor Brown and Oregon lawmakers face a huge budget hole and a potentially challenging political environment to find compromises on spending cuts or tax increases.

Cutline: Governor Brown and Oregon lawmakers face a huge budget hole and a potentially challenging political environment to find compromises on spending cuts or tax increases.

As the dust settles from the election, the view of the 2017 legislative session is becoming clear – and familiar.

Democrats remain in control. Experienced presiding officers, Senate Peter Courtney and Speaker Tina Kotek, will lead the legislature. Governor Kate Brown will continue to fulfill Governor Kitzhaber’s term. Fifteen freshman legislators, one in the Senate and 14 in the House, will join the ranks. Then there is a budget to balance and a transportation funding package to debate.

Familiarity, however, will not make the tasks at hand any easier.

On February 1, 2017 the legislature will begin the arduous task of balancing a budget with a predicted $1.4 billion deficit. It is a deficit made more challenging by the strain on the general fund from the statewide ballot measures Oregonians passed this November – money for veterans, technical education and outdoor school for all.

Legislators wont be able to count on additional revenue from Measure 97, the gross sales tax measure Oregonians widely rejected. To balance the 2017-19 budget, legislators must cut spending or find more revenue – or both. Courtney told reporters he isnt sure he has the votes right now for a tax increase or major budget cuts.

The search for alternative revenue opportunities is already underway, but so far with no consensus. There may not be a consensus for a while. Because Democrats lack supermajorities in the House and Senate, they will be required to find at least one Republican in each chamber to pass a revenue-raiser.  It remains to be seen whether business leaders, fresh from spending millions to defeat Measure 97, will be willing to sit down to negotiate another tax plan.

It is customary that revenue-raising goes hand in hand with other legislative actions, especially budgets, which stand to be cut. Brown asked her state agency heads to submit pro forma budgets with 10 percent cuts. She is constitutionally obliged to submit a balanced budget without using new revenues, a requirement recently observed more in the breach than reality. Her budget is due out December 1.

What could make the 2017 session different is a change in game plan in Washington, DC on Medicaid. Oregon is one of the states that expanded Medicaid eligibility and the cost is a significant part of the budget hole lawmakers face. If Congress switched to Medicaid block grants to states, that budget hole could widen.

There is a broad consensus on the need for a transportation funding package. Last session, the package was derailed over other legislation. It probably will fall to Brown to recommend a new starting place for a transportation funding package.

Transit advocates are pushing for a funding component, but that is complicated because any revenue raised taxing cars, trucks or the fuel they consume is constitutionally dedicated to the Oregon Highway Trust Fund for road and bridge improvements.

Another wild card is President-elect Donald Trump’s $1 trillion infrastructure investment plan, which CFM’s Joel Rubin has observed is noteworthy because it doesn’t involve any new federal spending on transportation. The plan relies on tax credits and investments by private contractors, which may not be very applicable to Oregon’s highways, bridges and transit systems.

While the players and policies are familiar in Salem, there could be surprising new turns that Brown and legislators will face. With Brown facing re-election in 2018 and at least two potential rivals encamped in the Capitol – Secretary of State-elect Dennis Richardson and Rep Knute Buehler – finding common ground on mountainous issues could be more challenging.

Public affairs associate Ellen Miller recently earned her MBA from Willamette’s Atkinson Graduate School of Management, with a focus on public management and policy. 

Oregon Election Results Mostly Predictable

Dennis Richardson broke a decades-long streak for Republicans as he won the open Oregon secretary of state race in a state election that was mostly predictable.

Dennis Richardson broke a decades-long streak for Republicans as he won the open Oregon secretary of state race in a state election that was mostly predictable.

Because 1.5 million Oregonians voted by mail before election day, initial results Tuesday night were conclusive, showing solid victories by Hillary Clinton for president and Governor Kate Brown for re-election. 

Results also showed Measure 97, which would have subjected large corporation to a gross receipts tax, was headed for defeat despite earlier polling showing support.

Senator Ron Wyden, Oregon’s five Members of Congress and Attorney General Ellen Rosenblum cruised to re-election.

Dennis Richardson became the first Oregon Republican in decades to capture a state constitutional office as he defeated Democrat Brad Avakian in an open race for secretary of state. Gordon Smith was the last Republican to win a statewide office when he was elected U.S. senator in 2002.

Tobias Read held a lead to become Oregon treasurer, benefitting from a strong showing by independent Chris Telfer. The combined total votes for Telfer, a former Republican legislator, and GOP candidate Jeff Gudman exceeded Read’s total.

In many ways, Measure 97 overshadowed everything else on the Oregon ballot. Its proponents said the projected $3 billion in annual new tax revenue was needed to fund K-12 schools adequately and prevent cuts in health care and senior services because of a looming budget hole in the next biennium. Opponents said the tax would stifle Oregon’s business growth and wind up raising prices for Oregon consumers.

The defeat of Measure 97 doesn’t spell the end of a tax debate, but it narrows options and rules out anything as large as the initiative proposed.

Democrats will retain control of both the House and Senate, but they lost their 36-vote supermajority in the House and may not gain one in the Senate. Democrats need a three-fifths supermajority in both chambers to pass tax measures without any Republican votes. 

One of the more popular and successful measures on local ballots imposed restrictions or sales taxes on recreational marijuana retailing. Clackamas County elected Jim Bernard as its new commission chair. Portlanders broke precedent and unseated City Commissioner Steve Novick.

Budget Fight Expected in 2017 Legislative Session

Measure 97 has been an expensive, contentious ballot measure and, win or lose, it will generate more contention in the 2017 Oregon legislature that must decide how to spend new tax money or fill the large projected budget hole.

Measure 97 has been an expensive, contentious ballot measure and, win or lose, it will generate more contention in the 2017 Oregon legislature that must decide how to spend new tax money or fill the large projected budget hole.

No matter what happens at the ballot box next week, Salem insiders expect a long and contentious 2017 Oregon legislative session revolving around budget issues. If Measure 97 is approved November 8, the debate will focus on how legislators allocate the expected $6 billion in additional tax revenues. If Measure 97 is defeated, advocates and legislators will struggle with deep budget cuts.

Passage of Measure 97 will mean higher taxes on larger businesses, generating an estimated 30 percent increase in state general fund revenues. The legislature would be politically obliged to spend a big chunk of additional funds on education, healthcare and services for seniors as promised by measure supporters. However, lawmakers are not obligated to do so and legally could spend this new funding in whatever way they deem appropriate.

Citizens can expect fireworks over just how much of the new revenue pie should be dedicated to education, healthcare and services for seniors and how much should be available for other programs. In at least one case, money will have to go to another purpose. 

Because companies such as Chevron would be subject to the Measure 97 gross receipts tax, a portion of their tax revenue would go into the Oregon Highway Trust Fund. The Oregon Constitution requires any tax revenue derived from fuel consumption to be dedicated to road and bridge construction and repair. The Legislative Revenue Office estimates as much as $300 million of Measure 97 revenues fall into this category. The new money for roads may dampen legislative interest in a transportation funding measure that would include transit.

Oregon’s seven public universities would also advocate for a piece of the budget pie. The funds allocated by the state for these institutions has dropped significantly over the past decade, resulting in rapid tuition increases. Slowing those tuition increases will be a key argument for more funding by universities and higher-ed supporters. Other areas that will seek more funding will be public safety and natural resource programs. 

An unspoken claimant for funding is Public Employees Retirement System (PERS) and its climbing unfunded liability. Higher PERS payments, estimated at around $885 million in the coming biennium, will affect most Oregon public agencies, putting pressure on existing programs and personnel levels.

If Measure 97 fails, the session would follow an entirely different and more desperate path. Across the board budget cuts of about 10 percent are expected without the additional revenue generated by Measure 97. The focus will be on where to cut funding and by how much. 

A small group of lawmakers already is looking at more modest Measure 97 alternatives, which could be in play even if the ballot measure passes. The big question would be whether business groups are willing to participate in Measure 97 replacement talks after spending millions to defeat it.

Fragments From a Fractious Political Fracas

The widow of the late Democratic Senator Alan Bates said he valued the high road over the low road in politics as she called out the Democrat seeking to succeed him for running negative advertising.

The widow of the late Democratic Senator Alan Bates said he valued the high road over the low road in politics as she called out the Democrat seeking to succeed him for running negative advertising.

With the 2016 election less than two weeks away, here are some news updates:

A re-emergent John Kitzhaber shared on Facebook his opposition to Measure 97. His revelation earned him sharp rebukes from Measure 97 backers who accused the former governor of failing to achieve a durable grand bargain that generated adequate state revenue and taxpayer equity. For his part, Kitzhaber said more revenue is needed and corporations should pay it, but Measure 97 wasn’t the way to do it…

Willamette Week’s Nigel Jaquiss reports that Oregon Democrats have cast more ballots in early voting than Republicans, reversing a historical pattern. It is tempting to speculate Republicans aren’t rushing to the polls because of reservations about the guy at the top of the GOP ballot. Democrats may suggest an early voting surge reflects enthusiasm for Hillary Clinton. Of course, it may just be a short-term anomaly….

The wife of the late Senator Alan Bates, a Democrat, chastised the Democratic candidate to succeed him for airing negative ads against her Republican opponent. Laurie Bates, in a guest column appearing the Medford Mail Tribune, cited the adage, :how you run for office reflects how you will serve in office.” She said her late husband “modeled that belief” and “would rather lose on the high ground the win on the low ground.” The Republican candidate has limited campaign contributions and refused negative advertising. That isn’t expected to help his long-shot candidacy, despite praise from Mrs. Bates….

The Oregon governor’s race between Kate Brown and Bud Pierce is either a walk-over for Brown or neck-and-neck. Take your pick based on recent polls with disparate results. Different public opinion polling methodologies can account for some variation, but these polls are, as they say, miles apart. Polling more consistently has predicted a tight race between Democrat Brad Avakian and Republican Dennis Richardson for Oregon secretary of state. Richardson has captured many top newspaper endorsements amid questions about some of Avakian’s positions, including voter registration through election day. As a result, Republicans appear to have their best shot in years to capture a statewide elected post….

Attorney General Ellen Rosenbaum is a shoe-in for re-election, but finds herself with an awkward lawsuit filed by her civil rights director alleging racial discrimination….

Pew Research reports voters are pessimistic about the ability of either Hillary Clinton or Donald Trump to heal wounds inflicted during a brass-knuckles 2016 presidential campaign or to bridge deep political divisions that have stymied the federal government over the past eight years. Two-thirds of Clinton supporters doubt political divisions will subside if she is elected, and 25 percent expect divisions to deepen. Almost half of Trump supports anticipate any change in the toxic political atmosphere in Washington, DC, which suggests the election may not end the fractious campaign.

Health Care Policy and Funding Moves Front and Center

Health care policy returned to center stage as Governor Brown pledged to protect funding for the Oregon Health Plan and Oregon’s former health care policy doctor John Kitzhaber resurfaced to urge a shift in funds from medical care to human services that influence people’s health.

Health care policy returned to center stage as Governor Brown pledged to protect funding for the Oregon Health Plan and Oregon’s former health care policy doctor John Kitzhaber resurfaced to urge a shift in funds from medical care to human services that influence people’s health.

Health care policy has assumed a higher profile in the 2016 gubernatorial election, punctuated by the public resurfacing of former Governor John Kitzhaber, Oregon’s long-time policy doctor.

In a debate with her GOP challenger Bud Pierce, Governor Kate Brown said she will protect funding for the Oregon Health Plan, which could face a budget hole next biennium of anywhere between $250 to $750 million. Pierce said he would avoid lopping anyone off the Oregon Health Plan, but deal with the budget gap by reducing services.

Meanwhile, Kitzhaber re-emerged from his self-imposed exile by calling for a shift in funding from medical services to social determinants of health, which are human services proven to help people stay healthy, but not always available or accessible to all low-income Oregonians.

What Kitzhaber proposes may already by set in action by Brown’s administration, which is preparing to ask for another Medicaid waiver and $1.3 billion in new federal funding to do just what the former governor recommended. Oregon previously received $1.9 billion in federal funds to support creation of CCOs as a way to hold down rising health care costs, which they have so far succeeded in accomplishing.

The waiver request would direct Coordinated Care Organizations (CCOs), which were created under Kitzhaber’s watch, to establish broad-based community partnerships to make certain human services more readily available and integrated with the health care system.

CCOs were established as a way to “bend the cost curve” on health care spending by eliminating inefficiencies in the health care delivery system and focusing on medical procedures with a track record of success. In many respects, part of the job of CCOs is to keep people out of the hospital or limit how long they stayed in the hospital, so an additional role of connecting patients to human services wouldn’t be that foreign.

Connecting mainstream health care to other systems, including public health, school clinics and veterans care, hasn’t been easy. Trying to make a connection with human services, which are provided by a mosaic of government and nonprofit organizations, could be an even more daunting challenge. CCOs could serve as an existing and capable center-point around which to organize medical and human services for lower income Oregonians.

Brown’s bigger challenger, if she is re-elected as expected, will be to keep her pledge to protect the Oregon Health Plan budget. Passage of Measure 97, which would add a projected $3 billion in tax revenue to the state’s general fund, could help plug the Plan’s budget shortfall, but there is no guarantee that Brown or the legislature would use Measure 97 funding for that purpose.

In fact, Brown may already be looking for other revenue sources to rescue Oregon’s expanded Medicaid coverage as federal funding under Obamacare begins to phase down. If Measure 97 fails, those revenue sources may go from possibilities to probabilities in the defense of the Oregon Health Plan. While there has been no public discussion of funding options, larger Oregon hospitals and health systems might be a tempting target. 

Health care costs have received more attention thanks to anti-Measure 97 campaign ads that claim the gross receipts tax on large corporations could increase health care prices in Oregon by as much as $100 million annually.

Oregon Treads Where Nevada Already Has Trudged

Oregonians will vote November 8 on Measure 97 that would impose a gross receipts on corporations with $25 million or more in annual sales in the state, following a path trod by Nevada that adopted a business tax in 2015 based on gross revenues.

Oregonians will vote November 8 on Measure 97 that would impose a gross receipts on corporations with $25 million or more in annual sales in the state, following a path trod by Nevada that adopted a business tax in 2015 based on gross revenues.

Oregonians are experiencing a barrage of pro and con advertising on Measure 97, the corporate gross receipts initiative. Nevadans can relate.

Like most states, Nevada has struggled to raise revenue for its public schools as the state’s full-time population has grown and revenue from gambling operations hasn’t kept pace. Since Nevada’s constitution expressly prohibits a personal income tax, lawmakers have centered their attention on corporations.

They began with what is called a Modified Business Tax (MBT), which roughly resembles a payroll tax that applies to gross wages of employees. The MBT hasn’t generated enough revenue, so in 2014 Nevadans voted on an initiative to impose a “margin tax, modeled after the Texas Franchise Tax, with all proceeds dedicate to public education. They rejected the idea by a 78 percent majority.

Republican Governor Brian Sandoval, who was re-elected in November 2015 by a percentage similar to the margin tax ballot measure defeat that he opposed, convinced the 2015 Nevada legislature to adopt Senate Bill 483, which provides for a “commerce tax” that by any other name is a gross receipts tax. Nevada businesses subject to the tax begin paying it this year. Opponents are trying to repeal the Commerce Tax.

Couched as a tax on the “privilege of engaging in a business” in Nevada, the tax is based on gross revenues, with no subtractions for cost of goods or expenses. The first $4 million in gross revenue is exempt and there is a long list of exclusions that includes complementary goods and services, the value of cash discounts and the sale of exchanges of trademarks or other intellectual property.

Another feature of the Nevada Commerce Tax is varying rates applicable to different business sectors. For example, the Commerce Tax rate for for mining is 0.051 percent compared to 0.091 percent for manufacturing, 0.111 percent for retail trade and and 0.261 percent for waste services.

Passage of Measure 97 in Oregon this fall will likely require legislative action to provide similar kinds of details as contained in Nevada’s Commerce Tax to address a variety of business circumstances. Failure of Measure 97 might result in a corporate tax restructuring with many of the nuances Nevada lawmakers embraced in SB 483. In either case, it will be a Mardi Gras for special interest lobbyists in the 2017 Oregon  legislative session.

Some tax experts warn that gross receipt taxes have inherent flaws, not the least of which is being regressive, which accounts for why most of them have been cashiered. Nevada opted for a version of a gross receipts tax because of a political aversion to a corporate income tax.

Oregon already has a corporate income tax. Measure 97 would act in many respects like a corporate minimum tax on corporations with $25 million or more in annual sales in Oregon. In fact, a gross receipts tax has been proposed previously in the Oregon legislature as a corporate minimum tax, but never gained much political traction.

The corporate income tax in Oregon is based on a single sales factor, which means corporations pay a portion of their taxable income based on the percentage of sales they have in Oregon, not on how much property or how many employees they have in the state. The single sales factor was lobbied into law by a coalition of large corporations. Retention of the single sales factor was the reason Nike threatened not to expand here unless it was assured that factor couldn’t be changed in calculating its Oregon income tax liability tax.

Nevada’s experience with the Commerce Tax is just underway in the shadow of a repeal effort that has ben clogged up in court by defenders of the tax. That might presage what life in Oregon will be like regardless whether Measure 97 passes or fails November 8.

New Workplace Battlefront Opens on Flexible Scheduling

The next workplace battlefield is emerging over flexible scheduling of workers in sectors such as fast food restaurants. The situation further rankles Oregon business leaders who are still upset over paid sick leave, a higher minimum wage and Measure 97.

The next workplace battlefield is emerging over flexible scheduling of workers in sectors such as fast food restaurants. The situation further rankles Oregon business leaders who are still upset over paid sick leave, a higher minimum wage and Measure 97.

Democratic lawmakers are teeing up legislation for the 2017 session to mandate scheduling rules for some workers, which could make testy relations with Oregon’s business community even testier.

Senator Michael Dembrow, a Portland Democrat, says it’s timely to tackle the legislation next session. He noted the 2015 Oregon legislature imposed a moratorium on municipalities passing “flexible schedule” ordinances. That moratorium expires next year.

Dembrow’s legislation probably would mirror ordinances adopted in Seattle and San Francisco that require employers with large numbers of part-time workers to provide advance schedules or pay extra compensation.

Supporters say sudden work schedule changes make it hard and costly for low-wage workers to arrange for child care or balance work for second and third jobs. Business advocates say employers need the ability to adjust worker schedules to deal with emergencies and when employees call in sick.

Business groups are already rankled about workplace legislation following the 2015 session when Democrats pushed through bills to mandate paid sick leave and raise the state’s minimum wage.

They haven’t cooled down as business representatives walked away after Dembrow's first interim work group meeting on the flexible scheduling bill.

There is broad business opposition to Measure 97, the initiative appearing on the November 8 general election ballot that would impose a gross receipts tax on corporations with more than $25 million in annual sales in Oregon. Business leaders predict business closures or departures if the measure passes and warn they will be reluctant participants in any negotiations on an alternative if it fails. That wariness could extend to other issues, including the flexible scheduling bill.

After demurring, Governor Kate Brown endorsed Measure 97, even though she says she hates it. Brown based her support on the need for substantial additional revenue to plug a $1.25 billion or larger projected budget hole in the 2017-2019 biennium. Brown and her GOP challenger Bud Pierce will hold their first gubernatorial debate Saturday in Bend and can expect to be asked about the flexible scheduling bill.

When push comes to shove, some business leaders may prefer statewide flexible scheduling legislation as opposed to the specter of cities such as Portland and Eugene adopting their own local ordinances. But bruised political feelings among business leaders also could diminish or even extinguish their willingness to compromise.

Pierce Dumps Trump as Gubernatorial Debates Loom

GOP gubernatorial candidate Bud Pierce jettisoned his endorsement of Donald Trump on the run-up to this Saturday’s first debate with Governor Kate Brown in Bend. Four more debates will follow into mid-October.

GOP gubernatorial candidate Bud Pierce jettisoned his endorsement of Donald Trump on the run-up to this Saturday’s first debate with Governor Kate Brown in Bend. Four more debates will follow into mid-October.

Few people aside from Donald Trump believe the unconventional GOP presidential candidate can capture Oregon in the November 8 general election. Now Oregon’s GOP gubernatorial candidate Bud Pierce has joined the chorus.

Pierce withdrew his endorsement of Trump this week, claiming the New York real estate magnate isn’t unifying the Republican party and is driving away Hispanic voters. Pierce says Hispanic voters have a natural attraction to political conservatives and he is actively seeking their support to upset Governor Kate Brown.

In an interview last month, Brown urged Pierce to disavow Trump and “do the right thing.” Whatever the right thing might be, Pierce stopped short of pledging to vote for Democrat Hillary Clinton. He said he won't cast a ballot for anyone in the presidential race this year.

Jacob Daniels, Trump’s Oregon campaign chairman and perhaps the only person in the state who thinks his man will win here, dismissed Pierce’s dropped endorsement as insignificant.

The most recent public polling shows Brown with a comfortable double-digit lead over Pierce, but some Oregon Democrats have been uneasy over her largely invisible campaign while she hit the campaign fundraising trail. Pierce hit the airwaves with hard-hitting TV ads last month. Brown went up in the last few days with a softer ad that describes her political start as a children’s advocate and her achievement s governor boosting state K-12 school funding.

Brown and Pierce are scheduled to square off in their first face-to-face debate on Saturday in Bend, which may only rate second billing to home football games in Eugene and Corvallis. The gubernatorial candidates debate again September 30 in front of the Portland City Club, October 6 in Eugene, October 13 in Medford and October 20 in Portland.

Pierce has called for fresh thinking in Salem while Brown has touted her leadership as the successor to John Kitzhaber, who resigned at the beginning of his unprecedented fourth term. No seminal issues have created a sharp division in the race, though the Oregon-Oracle $100 million settlement of the Cover Oregon fiasco may have averted a flash point in the race. The settlement that involved six separate legal actions came just before Brown was scheduled to be deposed.

The debates are likely to underscore Pierce’s opposition to and Brown’s endorsement of Measure 97, the initiative that would impose a gross receipts tax on corporations with more than $25 million in annual sales in Oregon. Proponents and opponents of the tax measure are waging a vigorous campaign that pivots on how much of the tax will filter down to small businesses and ultimately Oregon consumers. Early polling indicates the measure has strong support.

The gubernatorial candidates should be pressed on how they would respond if the tax measure passes or fails. Measure 97 is projected to generate $3 billion in new state tax revenue annually, which would more than plug the state’s anticipated $1.5 billion biennial budget hole. However, the state will face severe spending challenges on education and health care spending if the measure fails.

As the debates unfold, a key target for each candidate will be attracting non-affiliated voters. Brown can generally count on the Democratic majority in urban areas from Portland to Eugene. To win, Pierce may need to catch some of the same populist wind that propelled voters in Oregon to support Trump and Bernie Sanders.

What an Effective Lobbyist Really Does

Good lobbyists do a lot more than schmoozing and handing out campaign cash. Their work to pass or kill bills is strenuous, stressful and sometimes monotonous, and it can span multiple legislative sessions.

Good lobbyists do a lot more than schmoozing and handing out campaign cash. Their work to pass or kill bills is strenuous, stressful and sometimes monotonous, and it can span multiple legislative sessions.

Getting a bill passed is a lot more complicated than you may think. Rarely does legislation follow a straight line from its introduction to the day it lands on the governor's desk for a signature. And big campaign contributions don’t always mean success.

Lobbyists earn their pay by doing much more than drafting legislation, talking it up with the lawmakers on the committee where it will be sent and schmoozing in the lobby to round up enough votes. Lobbyists are worth their weight in gold when they anticipate what could go wrong on the legislative journey and take steps to avoid deadly detours.

To outsiders, lobbyists look like men and women who live the life – golfing, dining and hanging out with people with voting cards and the power to pass or kill a bill. If that’s all a lobbyist did, he or she might not be all that successful.

Anticipation starts before a bill is written or dropped. Lobbyists read the situation to see if the climate is right for a measure to make it. If, for example, Democrats control the legislature, right-to-work legislation has a slim to no chance of seeing the light of day, let alone getting adopted.

Assuming the climate is either conducive, or at least not problematic, the next thing to anticipate is the attitudes toward the bill of the chairs of the House and Senate committees where it would be referred. In the Oregon legislature, committee chairs have the power to “sit” on a bill and never give it a hearing or give it merely a perfunctory hearing.

A lobbyist will talk with committee chairs to see if they support or are at least okay with a bill and to find out what questions they have and background information they want. Some bills can be referred to more than one committee. This can be both a problem and an opportunity for a lobbyist. One way to get around a dissenting committee chair is to seek a referral to another committee with a more welcoming chair. Double committee referrals can be encouraged, which provides a lobbyist who opposes a bill twice the opportunity to erect roadblocks to stop it.

While committee chairs have the power over bills when they arrive in their possession, the presiding officers of the House and Senate are the ones with the power to decide where or where not to send bills. This is the next stop on the lobbyist's path to success to ensure the House Speaker or Senate President doesn’t send a bill to a committee where it will wind up stillborn.

All this activity occurs – or should occur – before a bill is introduced. Then the fun really begins.

Lobbyists need to prepare materials that explain the bill and its purpose. Complex bills require detailed explanations, which have to be clear and crisp or risk having the eyes of lawmakers glaze over.

Lobbyists will meet with legislators, especially the ones who sit on the committees where legislation would be considered. These meetings may involve bringing along a constituent to underscore the bill’s importance. In some cases, lobbyists will arrange tours to “see” the problem the bill seeks to solve. The same approach holds true if the lobbyist opposes a bill.

The preparation and meetings have another critical purpose – to ask for and confirm a legislator’s support for or opposition to the bill. Nailing down a “yes” or “no” may require more than a single meeting. Many legislators are reluctant to commit until they have heard the other side.

Eventually lobbyists develop a vote count, which becomes their real leverage. Even a reticent committee chair may yield to the wishes of his or her committee on a bill. A smart committee chair might use the opportunity to line up votes he or she wants on another, unrelated bill. Lobbyists have to keep track of this horse trading to avoid letting their legislation become manure tossed into the compost bin.

For most bills, lobbyists have to ask for a hearing. If they have the votes lined up in committee, they also ask for a work session, which allows the committee chair to call for a vote on the measure.

Once a hearing has been scheduled, lobbyists coordinate testimony. This can be as complicated as inviting a busload of people to testify or, at the request of a sympathetic chair, giving short-and-sweet testimony so the bill can be quickly moved along. Skilled lobbyists understand how to show the flag and fly under the radar.

An emerging trend is the need for coalitions of support, especially for bills that are contentious. It is not enough for a single lobbyist to tout a measure. Lawmakers want to know who else supports the bill, or at least who doesn’t oppose it.

When a bill makes it out of committee, it heads to the House or Senate floor, unless it has a fiscal impact, which means in most cases it then goes to the Joint Ways and Means Committee. In the Oregon legislative set-up, Ways and Means is an appropriations committee. It's also like a parole board. You have to show up and make a case for the release of your bill. Without approval, your legislation will rot in a fiscal jail.

A good chunk of bills that pass on the House and Senate floors draw minimal comment and debate. More often, even on non-controversial bills, legislators pose questions that the legislator carrying the bill attempts to answer. Lobbyists work with committee staff to anticipate questions and generate responsive, accurate answers. Under their code of ethics, Oregon lobbyists are obliged to correct any misinformation they provide, whether it's inadvertent or intentional.

Passing the House or Senate is just the start. Some House-Senate standoffs inevitably turn innocent bills into hapless hostages. Lobbyists have to use their political GPS to see an impediment coming and do what they can to skirt or manage the detour.

Even with reliable vote counts, nervous lobbyists typically pace outside the House and Senate chambers waiting for their bill to come up in debate and a vote. They also have to be available in case a lawmaker wanders out of the chamber to ask a random question about the bill.

If a bill is on its way through the legislative gauntlet, lobbyists must brief the governor’s staff. Unlike a committee chair who has the power of a pocket veto, the governor is required to sign or veto bills that reach his or her desk. If a bill faced serious opposition in the legislature, governors will usually scrutinize it carefully, seeking advice from their legal counsel and policy staffs. Bills with partisan overtones or ones that pass on largely party-line votes can present special lobbying challenges.

Of course, politics do play a role in legislation. Lobbyists court political relationships by contributing to legislative candidates, House and Senate leadership and Republican and Democratic caucuses, which can make a difference when a lobbyist calls for a meeting. But donating campaign cash doesn’t guarantee a legislative victory. That's why good lobbyists work to build trust by carefully validating their claims and by credibly and fairly telling their opponent’s story. Some lobbyists have even won the day by telling their opposition’s story better than their opponent. But all lobbyists are gauged on their propensity to tell the truth.

Some bills take more than a single session to make it all the way through the process to become law. That means repeating the drill – improving the bill and its support, perhaps with a stronger grassroots network, more powerful testimony or a more persuasive argument.

Bills that pass can be targets for amendments or even repeal in subsequent sessions. So the lobbyist’s job is seemingly never finished.

Lobbying involves hard, persistent and often monotonous work. The best lobbyists aren’t necessarily the ones with the most flash, but the ones with the creativity to see a path to success and the perseverance to follow that path. And it never hurts to have a really good vote count.

Oregon’s Pending Political Divorce

Measure 97, which would raise taxes on corporations with more than $25 million in annual sales in Oregon, faces an uncertain future in the general election. However, it does seem certain that it's causing a political divorce in Oregon that will fuel polarization and make compromise harder to find.

Measure 97, which would raise taxes on corporations with more than $25 million in annual sales in Oregon, faces an uncertain future in the general election. However, it does seem certain that it's causing a political divorce in Oregon that will fuel polarization and make compromise harder to find.

Oregon voters can expect political rhetoric to escalate over Measure 97, the initiative to impose a gross receipts tax on corporations with large sales in the state, as the November 8 general election approaches.

However, the more intriguing question may be what will or should happen after the election, regardless of whether Measure 97 passes or fails? Chances are whatever happens will feel like a divorce. Andrew Bulkily, writing for Oregon Business, summed up the situation as going from “gridlock to civil war."

No one disputes that the stakes are huge. Oregon officials estimate Measure 97 will generate $3 billion per year in new state tax revenue. Proponents say most of that tax will be shouldered by large out-of-state corporations that currently don’t pay their fair share of the tax burden in Oregon. Opponents insist that the tax measure will result in higher consumer prices.

Emily Powell, the third generation owner of Powell’s Books, says higher taxes resulting from the passage of Measure 97 could drive the iconic Portland-based independent bookstore out of business. Powell says profit margins in the book business are too small and competition is too stiff to allow the store to raise its prices.

Measure 97 revenues have been touted by supporters, including Governor Kate Brown, as a badly needed and long overdue revenue make-up for K-12 school funding, health care and senior services. Opponents argue that the initiative can’t guarantee how legislators will spend the added tax money and that a big chunk of it will go to cover huge Public Employees Retirement System shortfalls.

There are people on both sides of the initiative who wish a compromise could have been reached to avoid a ballot measure mash-up that could be the most expensive political campaign in state history. Proponents and opponents have each raised double-digit millions of dollars to trade televised jabs this fall. Measure 97 backers weren’t in the mood to compromise, feeling that 2016 could be a moment to push through a major tax change on the ballot.

Which brings us to what happens after the election. If Measure 97 passes, the state’s available discretionary revenue will sharply expand. That would probably erase the projected $1.3 billion state biennial budget hole, but it wouldn’t necessarily determine how the balance of money would be spent. You could expect fierce arguments among interest groups over how much should go to K-12 schools versus investments in health care and senior services – and in higher education. You also could expect some high-profile business response, such as a business like Powell’s Books shuttering.

If Measure 97 fails, the state budget hole will loom even larger, potentially threatening cuts to K-12 and higher education funding and threatening Medicaid expansion. Perhaps worse, many in the business community may refuse to enter into discussions about how to meet that budget shortfall, PERS underfunding or tax reform because of the fractious fight they had to wage to defeat Measure 97. Oregon lawmakers may see hearing rooms full of angry faces unwilling to sit together in work groups to explore solutions.

It’s likely that the political zombie of a state sales tax would re-emerge. The sales tax has been the default idea for how to reduce the volatility of Oregon’s existing income-tax-heavy revenue system. However, sales taxes face their own haunting challenges, such as Internet sales. In Oregon, the appetite for a sales tax by voters has the same taste notes as brussels sprout ice cream.

If Measure 97 passes and Brown wins election, it will give her an effective mandate to guide how the new tax revenue should be allocated. However, it could dampen enthusiasm for climbing the steep hill to craft, pass and avoid a referral on a major transportation funding measure.

If Brown wins, but Measure 97 fails, Brown will have the challenge of trying to patch together a balanced budget, with limited credibility to court business support for alternative tax-generating options.

Brown’s position also would be weakened because she must run for election again in 2018 for a full four-year term. As secretary of state, Brown succeeded John Kitzhaber as governor after he resigned in 2015 and is running this year to fill out the final two years of the former governor’s four-year term.

This is a fairly grim picture. Sort of like a family portrait after a divorce.

Over time, views will soften, the more contentious personalities will be pushed aside and a dialogue can resume. But as the 2016 presidential election has revealed, strong political undercurrents can be unleashed, deepening polarization and crippling efforts to find common ground – or even a table where everyone can sit around to talk.