Oregon's Last Republican Governor

A piece in the Salem Statesman-Journal brought back a lot of memories for me.

In a column entitled "Atiyeh Laid Foundation for Oregon Economic Diversity," state government reporter Peter Wong recalled the last Republican governor of the state, Vic Atiyeh, who is approaching his 89th birthday. He still goes to his office in Portland and often shows up for ceremonial events at the Capitol he loved where he served as a state senator and held the governor's office for eight years.

I had the privilege of working for the Atiyeh Administration from 1979 through 1987.

Here are excerpts from Wong's piece:

"He (Atiyeh) turns 89 on Monday – and this month also marks 30 years since he took part in the longest special session of the Oregon legislature in state history. Officially, that session lasted 37 days, ending on March 1. But lawmakers took a weeklong break in the middle of the session after they found that the gap between tax collections and state spending was $100 million more than had been projected.

"The unlikely combination of a Republican governor and Democratic legislative majorities — with some Republican support — cut spending and raised taxes to balance the budget. They started the two-year cycle in mid-1981 with a spending plan for $3.2 billion — the Oregon Lottery did not exist then — and ended it with $2.9 billion, even after the tax increases. The unspent balance in the tax-supported general fund was around $3 million.

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Politics and Health Care Reform

Politics is never a stranger in legislative proceedings, as reflected this week by moves in both the Oregon House and Senate to slow down or hijack elements of Governor Kitzhaber's health care reform package.

The governor's provisions dealing with coordinated care organizations and a health care insurance exchange are likely to survive the short Oregon legislative session, now in its third week, but it may cause lawmakers to hang around Salem a few more days than expected.

At issue is whether the health care reform package will include tort reform to shield coordinated care organizations from expensive malpractice lawsuits. Republicans want it in while Democrats, including Kitzhaber, want to wait to consider it until the 2013 legislative session.

The first political twist occurred early in the weekend when House Republicans convinced Democratic Rep. Mike Schauffler to join them in voting to send the health care insurance exchange measure (House Bill 3164) back to committee. Observers watching health care legislation interpreted the unexpected move as a way to create trading stock with the Governor over tort reform.

Later in the week, Senate Republicans tried the unusual — and usually unsuccessful — tactic of trying to amend the health transformation measure (Senate Bill 1580) on the Senate floor. It failed. So did a subsequent effort to send SB 1580 back to committee, largely because Senator Betsy Johnson, D-Scappoose, stuck with her Democratic caucus in voting for the bill, despite earlier pledges to vote for tort reform

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Imagery Takes Center Stage

Governor Kitzhaber won plaudits for his rhetorical eloquence last week when describing his Early Learning Council initiative (House Bill 4165) using analogies.

At one point, a legislator on the House Human Services Committee, Rep. Mitch Greenlick, D-Portland, responded to the governor with the analogy of a wing walker.  For Early Learning Council reform to go forward, Greenlick said, those involved should think of the wing walker, who always had the instruction to not let go with one hand without having a good grip with the other.

Greenlick's point? Before the state goes all the way down the road of Early Learning Council reform, it should not lose a grip on the good programs operated by the longstanding Children and Families Commission system.

Kitzhaber, never short on words to describe his vision, quickly responded with another image. What he is asking groups to do in adopting a new system for early learners, the governor said, is like a rope-climbing experience for someone working out. Sometimes, he said, you have to let go of one rope before grabbing another.

Two more legislators — Senators Al Bates, D-Ashland, and Jackie Winters, R-Salem — continued the use of analogies when the health care transformation bill, Senate Bill 1580, came up Friday.  

Bates said it was important for legislators "to stay on the path" toward reform. Winters, in supporting a medical malpractice reform proposal, which wasn't added to the legislation, said, "it's not like we are blazing a trail here; many other states have taken the initiative we are proposing to take."

Those who are good at public podiums often use analogies to drive home a point with a word picture.

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Jobs Bills in the Mix

In a short legislative session dominated by budget concerns and Governor Kitzhaber's ambitious reform efforts in health care, education and early learning, jobs bills have taken a back seat. But that doesn't mean they won't make it to the finish line.

There are major bills to coordinate the state's economic development activity, create more enterprise zones and reduce temporarily Oregon's capital gains tax rate. And there is legislation to clarify how and when to tax data centers such as Facebook's that were prize catches by previous economic development recruitment.

Here is a quick overview of some of the significant jobs-related legislation in Salem:

House Bill 4040: Drafted by two influential legislators — Reps. Tobias Read, D-Beaverton, and Cliff Bentz, R-Ontario, along with State Treasurer Ted Wheeler, the Oregon Investment Act seeks to align state economic development programs and incentives to make them more inviting to private sector companies. The measure has passed out of the House Transportation Committee, so remains alive.

Read, Bentz and Wheeler co-authored an op-ed in The Oregonian explaining their intentions:

"Oregon spends significant Oregon Lottery profits and other funds today to enhance business development. Yet those tools are scattered across multiple agencies and have little strategic connection, and sometimes have little accountability to measure results.

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Three Down – Only 26 to Go

As legislators headed home Friday to gear up for a second week in Salem, it was difficult for anyone accurately to describe the activities of the first three days because things moved much faster than normal at the Capitol — especially for opening days of a legislative session.

There was a crush of business as committees posted hearings on a large number of bills that probably will go nowhere. It prompted a lot of scurrying around, as lobbyists tried to figure what had a chance of passage and what didn't.

Three major "reforms" proposed by Governor Kitzhaber — education, health care and early learning — began moving down paths toward probable approval later this month. If you were betting, you would say the governor would win, but not without push-back by some Republicans who believe change is moving too fast for anyone to accommodate.

A so-called "budget deal" announced on the second day of the session last Thursday produced a bit of buzz, plus a couple headlines, but no one was sure about the real scope or impact of the deal. It turned out to be a "budget re-balance" plan, which means it represented an attempt by Joint Ways and Means Committee leaders to solve internal problems in the budget that had emerged in the last six months since adjournment last June.

The re-balance plan didn't address the current shortfall in state tax revenue, which has been pegged at about $305 million. Nor did the plan address any new revenue shortfall, which could be announced Wednesday when the state economist releases the latest revenue forecast at a joint meeting of the House and Senate Revenue Committees. It also prompted criticism of the Ways and Means co-chairs who took some of a recent Phillip Morris tobacco tax court-ordered payment — about $56 million — and applied most of it to the general budget deficit, not, as proposed, to funding for crime victims. Such is the stuff of Ways and Means.  Money ostensibly for one purpose is swept for another purpose.

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Legislature to Lose Two Veterans

Two veteran moderate Republican legislators have announced they won't run for re-election. Their retirements will be a loss for the legislature.

Rep. Bill Garrard, R-Klamath Falls, who owned radio stations, served three terms in the House after a stint as a county commissioner — where he became the first Klamath County commissioner to win re-election in more than 100 years. Senator Dave Nelson, R-Pendleton, came to the legislature in 1996 with a background as a wheat rancher with a law degree.

From geographical extremes — Southern and Eastern Oregon — Garrard and Nelson carved out moderate reputations in Salem. They accomplished the tough feat of representing conservative districts while finding a way to work with colleagues on both sides of the aisle, including more liberal colleagues from urban Oregon. Their ability to find middle ground on tough policy is a hallmark of their legislative service.

Garrard and Nelson found status in Salem as members of the Joint Ways and Means Committee where they worked across party lines to craft compromises on thorny budget issues.  

Garrard was best known for his work on land-use during controversy over ballot measures dealing with property rights. His experience running a radio station in a rural area made him sympathetic to the plight of other small business operators — and underdogs in general.

Nelson battled to build electronic infrastructure, not only in Eastern Oregon but throughout the state.  One of his accomplishments — the "Nelson Technology and Opportunity Partnership” —rightfully bears his name. On Ways and Means, he led efforts to pinpoint appropriate investments for the State Radio Project, a major effort to provide interoperable public safety communications capabilities throughout the state.  

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Promise of Cash Makes Reform Vote Likely

Governor Kitzhaber and one of his health care gurus — Dr. Bruce Goldberg, head of the Oregon Health Authority — returned from Washington, D.C. a couple weeks ago with a load of cash. They reported the Obama Administration promised to help Oregon continue reforming its health care system with $2.5 billion over five years.

As always with such pledges, some observers will say "show me the money."  But the Kitzhaber/Goldberg report made headlines just as legislative committees met at the Capitol to prepare in earnest for the February legislative session, at which health care reform will be one of the big topics.

Embodied in Legislative Counsel bill draft #97, the details of a key reform — Coordinated Care Organizations (CCOs) — made its debut. The idea is to focus care, especially for low-income Medicaid recipients, closer to where they live around the state.

News of the prospective $2.5 billion to finance reform probably came close to assuring that the legislature will pass reform legislation in February. It will be almost impossible to say no.

Here are other developments from last week's legislative committee meeting days:

       *  Three officials — Goldberg; Eric Parsons, chair of the Oregon Health Policy Board; and Mike Bonetto, the governor's health care policy assistant — gave House and Senate committees a report on reform progress and received a respectful reception.

       *  A group of health care policy leaders from the Portland metropolitan area, led by Greg Van Pelt, CEO of Providence Health & Services, and George Brown, CEO of Legacy Health System, updated lawmakers on progress to form a CCO that would organize care for citizens in the tri-county area.  The group, which has been meeting for three weeks and intends to keep working, calls itself the "Tri-County Medicaid Collaborative." It was viewed as a significant development because so many organizations – about 30, including health systems, insurers, counties and MCOs – have taken the initiative to follow-up on the governor's health care transformation vision. Similar, though smaller efforts are under way in other parts of the state.

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Murky Jargon Blurs Budget Clarity

A headline in The Oregonian several weeks ago made the point that murky words get in the way of public understanding of health care reform issues. An Oregonian editorial last weekend urged Governor Kitzhaber to do a better job of sketching the details of his vision of education and health care reform. 

Murkiness also exists when it comes to general budget issues as legislators head to their first official annual session two weeks from now.

Consider these facts/perceptions about the budget:

         *  The state economist says the general fund is down by $305 million from the close of the 2011 legislative session. On a total general fund budget of more than $14 billion for a biennium, that is a rounding factor. Still, perceptions exist that cuts to K-12, higher education, cops and prisons and social services will be in the offing during the February session.

         *  One key legislator on the Joint Ways and Means Human Services Subcommittee was spending time in his office several weeks ago preparing a cut list of about $500 million. Those cuts, if enacted, would exceed the total $305 million revenue drop projected so far. 

         *  Rep. Dennis Richardson, R-Central Point, House co-chair of the Joint Ways and Means Committee, took credit earlier this fall for holding back a "reasonable ending balance of $460 million when the committee he co-chairs approved the 2011-13 budget." In his on-line newsletter, he added this noteworthy quote:  "...the good news is that having withstood the political pressure to spend every dollar and by retaining the $460 million ending balance, none of the $305 million of reduced revenue will be taken from the budgets for public safety, human services or education."

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Accurate Expectations for Short Session

Many Oregon legislators have lived through the different pace of the "experiments" with two short legislative sessions – one in 2008 and one in 2010. A number of new legislators and — perhaps more important — Governor Kitzhaber have not had the special experience.

That raises questions about proper expectations for the short session, which comes amid a lingering recession that has resulted in declining state tax revenue projections and just before the campaign season formally launches that will determine which party controls the House and Senate. The special session is scheduled to end no later than March 5, the day before the filing deadline for the May primary and November general elections.  

There are at least five major issues on the special session platter. Four of them are there because of initiatives by the governor as he seeks to re-make state government. The issues are:

         *  The need to balance the state budget in the face of a continuing recession that is sapping general fund resources for K-12, higher education, law enforcement, prisons and social services. The prospect of spending cuts is viewed as so dire that SEIU and AARP have bought advertising to decry further reductions in home, health and long-term care.

         *  Taking the next steps in the governor's education investment strategy, which will consolidate education management and funding priorities from kindergarten through graduate school under his leadership and an appointed education czar.

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Recycled Good Old Idea

There has been some publicity lately about the role Michael Jordan is playing in state government. Not the Michael Jordan who can dunk a basketball. The Michael Jordan who is director of the Oregon Department of Administrative Services, but functions like the chief operating officer (COO) of state government.

News about Jordan suggests he is the first person in Oregon's history to function as the COO.  He may function with that authority, but he is not the first manager to do so.

In former Governor Neil Goldschmidt's administration, Fred Miller held the position of director of what was then called the State Executive Department. He functioned exactly like a COO.

Here are some aspects of the role Miller played:

       *  State agency heads reported on a daily basis to Miller, even though — then as now — state statutes specify that an agency director is named by and reports to the governor.

       *  Miller held twice-weekly cabinet meetings for the heads of major agencies and monthly cabinet meetings for smaller agencies.

       *  In addition to the functions of the Executive Department (overall budget, auditing and personnel management — including labor relations), Miller also met on a routine basis with agency heads to check on their progress.

       *  For his part, the governor would attend cabinet meetings on occasion, but left the daily management function up to Miller.

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