A Closer Look at Oregon's Public Records Law

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CFM Partner Emeritus Dave Fiskum contributed to this post.  

A Tale of Two Cannabis Experiments

Oregon and Washington are now the only contiguous states with a regulated recreational marijuana system. But the two systems have a number of key differences in tax structure and the rules governing possession, retail and other aspects of the budding industry. (Humans Developer) 

Oregon and Washington are now the only contiguous states with a regulated recreational marijuana system. But the two systems have a number of key differences in tax structure and the rules governing possession, retail and other aspects of the budding industry. (Humans Developer) 

The banks of the Columbia River became something of a novelty this month with the early launch of recreational marijuana sales in Oregon. 

More than 200 of Oregon's medical pot dispensaries notified the state this fall with intentions to sell recreational marijuana until pot shops open late next year. The stopgap measure went live October 1, leaving the imaginary line between Oregon and Washington as the only place in the nation where you can find legal recreational marijuana for sale in state-sanctioned stores on either side of a state border. 

But Washington and Oregon actually tell two very different stories of experiments with how a regulated marijuana marketplace could work, and all eyes around the nation are eager to see how they will play out. 

Sales began in the aptly named Evergreen State in July 2014, nearly two years after voters approved a monumental move to legalize production, retail and consumption of the drug for recreation. Washington, however, did not begin with an early sales program. 

As a consequence, store owners faced daunting challenges including product shortages, establishing a supply chain from the ground up, price gouging from growers with overwhelming overhead costs and even temporary closures for the earliest retailers to open their doors. Most difficult of all: A burdensome tax system that charged a 25 percent excise tax three times along the supply chain from growers to retailers. 

More than a year later, most of those kinks have been worked out of Washington's marijuana system. Supply shortages are now a thing of the past, and prices have dropped markedly at the sales counter. 

Part of the shift can be attributed to a shakeout in the tax structure. This summer, state lawmakers agreed to get rid of the 25 percent excise tax at the producer/processor level and raise the tax rate for retailers to 37 percent. 

Altogether, the move effectively allowed store owners to lower prices for consumers. For retailers in Vancouver – home to two of Washington's most lucrative pot shops – that was a big deal before sales went live in Portland. 

So far, the Washington State Liquor and Cannabis Board has issued 205 licenses for marijuana retailers. Interestingly enough, nearly as many Oregon medical dispensaries are already selling recreational marijuana. 

Marijuana advocates are often quick to praise Oregon's system over that of its neighbor to the north. The early sales come with no sales tax attached for now. When the Oregon tax does kick in, it will be significantly lower than Washington's, meaning that consumers will likely find lower prices in Oregon. 

With a well-established system of medical growers, Oregon's stopgap measure leaves the state at virtually no risk of running into the kind of supply shortages seen early on in Washington.  

On top of that, Oregonians can grow up to four plants per home, out of public view, of course. In Washington, no one is allowed to grow at home for recreational purposes. 

Washington initially capped the number of marijuana retail licenses at 334. That could change, but for the sake of contrast, it's worth noting that Oregon has no limit. 

In the first week alone, Oregon's dispensaries have sold an estimated $11 million worth of marijuana. That mark puts the state on pace to surpass early projections. 

In Washington, sales continue to climb month after month. In the first year, the market brought in more than $64 million in tax revenue for the state, and the upward sales trend suggests that sum will look much larger by the end of this second year of legal sales.

Marijuana tax revenue will be big in Oregon, as well, but just how big is hard to tell at this point. And as for which state's experiment will prove more successful, we'll have to wait and see as the marketplace and the rules governing it continue to evolve.

A Ballot Brimming with Measures

The 2016 election could be bulging with ballot measures from a higher minimum wage to making English the official language of Oregon.

The 2016 election could be bulging with ballot measures from a higher minimum wage to making English the official language of Oregon.

Oregon's 2016 primary and general election ballots could be brimming with measures such as a gas tax in Portland, a gross receipts tax on businesses and a higher statewide minimum wage.

There also may be ballot measures touching on raw nerves related to immigration, universal background checks on gun sales, immigration and stricter penalties for lethal force to pets.

Combined with a wide open presidential race, the advent of Super PACs and a high-profile challenge to the re-election of Portland Mayor Charlie Hales, the 2016 election shapes up as a bonanza year for advertising venues. It's possible there could be more money to spend than there is advertising space to buy on television and radio.

As AP's Jonathan Cooper reported over the weekend, the only for-sure Oregon ballot measure at this moment is a legislative referral to make judicial retirement mandatory at age 75. But this is just the lull before the expected storm.

Our Oregon is shopping seven possible ballot measures to raise taxes on corporations and wealthier Oregonians. Two groups are vying to place a higher minimum wage on the ballot, one at $13.50 per hour and the other at $15 per hour.

There are at least two measures kicking around dealing with energy. Backed by oil companies, one would repeal the low-carbon fuel standard approved by the 2015 Oregon legislature. The other, put forward by environmental activists, would ban the expansion of any infrastructure in Oregon to extract, produce, process, ship or distribute fossil fuels.

In the absence of legislative action, Portland Commissioner Steve Novick has proposed a local gas tax to help pay for street repairs. His earlier idea of a street utility bill was shouted down, but Novick said Portland can't wait until the 2017 legislative session when Senate President Peter Courtney says he will take up a statewide funding proposal. There is a slim chance a transportation measure could be hammered out for consideration during the short 2016 legislative session.

Consumer activists have submitted a potential initiative to amend the Oregon Bottle Bill to make all consumer packaging, except what is compostable or refundable, subject to a 10-cent redemption fee. Grocers may elect to push an initiative to privatize liquor distribution and sales in Oregon.

Health care advocates are looking at measures to create a constitutional right to health care and require the Oregon legislature to adopt a system of universal health care. There also is a potential measure that would define maximum allowable charges for health care services.

Immigration foes, fresh from their success in 2014 blocking a driver's license bill, are toying with new measures to require employers to use the E-Verify system and designate English as the official language of Oregon.

Several measures could affect local governments. One prospective measure would hand over 50 percent of lottery proceeds to Oregon counties. Another would strip away Metro's ability to manage its regional urban growth boundary.

A second measure affecting the Oregon Lottery would carve off 5 percent to pay for veterans' services.

Other issues bouncing around, such as rules governing legalization of recreational marijuana, could result in even more ballot measures. 

The Impact of the Independent Party of Oregon

Former Oregon legislator Chris Telfer wants to find out as she has filed as an Independent to run for state treasurer. The most prominent "independent" in Oregon these days may be Senator Betsy Johnson, D-Scappoose. 

Former Oregon legislator Chris Telfer wants to find out as she has filed as an Independent to run for state treasurer. The most prominent "independent" in Oregon these days may be Senator Betsy Johnson, D-Scappoose. 

Oregon is officially a three-party state and questions abound whether the Independent Party of Oregon will alter the state's increasingly blue-state electoral performance. The first test could be a candidate running for state treasurer.

The Independent Party of Oregon achieved recognized party status August 17 after nailing down almost 110,000 registered voters. Recognition means the Independent Party will have its own primary election, paid for by the state, just like the Democratic and Republican parties.

The newly recognized party has benefitted by a name that many people associate with non-affiliation with the two major parties. People who registered as Independents may think less of it as a party than as a way to vote in the primary without being either a Democrat or Republican.

The absence of what the party itself stands for makes it hard to predict the party's impact on the 2016 elections, which will see almost every statewide office up for grabs, as well as a bucket load of ballot measures. Independent-minded voters have become a critical part of the Oregon electorate, often capable of swinging an election. But can the Independent Party nominate candidates that can win elections?

Former Oregon legislator Chris Telfer wants to find out as she has filed as an Independent to run for state treasurer, while, a position that will be open because Ted Wheeler is term-limited from seeking re-election. Telfer, who was elected to the Oregon Senate from Bend as a Republican, but defeated in a primary in 2012. A CPA, she ran unsuccessfully for state treasurer as a Republican in 2010.

The most prominent "independent" in Oregon these days may be Senator Betsy Johnson, D-Scappoose.  A Pamplin Media Group editorial last week speculated Johnson may be exploring a run for governor under the Independent Party banner. The editorial noted Johnson, who has toyed with a gubernatorial run before, is on tour through Oregon. It could be a political scouting mission or just a summer road trip.

A potential Johnson candidacy underscores the challenge facing the new party. While Johnson herself is well known as a long-time legislator, her platform as an Independent Party candidate for governor would have to be carved out of new stone. Okay, she's independent, but what does that mean for health care reform, funding for K-12 schools, transportation investment and income inequality? Democratic and Republican candidates would have a leg up on those issues because their political parties and their core constituencies line up behind fairly well defined positions.

Former Secretary of State Phil Keisling noted that initially the Independent Party impact may be greatest at the legislative level, where a few hundred votes in a swing district could make a difference. It also is a more fertile opportunity for an Independent Party candidate with local name familiarity to win a House or Senate seat.

Non-affiliated candidates have won before. In 1974 Charles Hanlon, who ran as an independent, defeated incumbent Senator Bill Holmstrom, even though he was Senate majority leader and co-chairman of the Joint Ways and Means Committee. Holmstrom was mired in a scandal and Hanlon emerged as a credible alternative in a coastal Senate district that no Republican at that time would have had a chance to win.

Another trend that could come into play is a relatively new option that allows a candidate to bear the nomination of more than one political party. Under fusion voting, a candidate can be the Democratic nominee, as well as the Green Party nominee, with both affiliations appearing on the ballot. This has given smaller parties a chance to have an influence on candidates with a chance to win, other than just being an election spoiler to split the votes. Until the Independent Party develops its own brand, this could be its more powerful weapon to gain at least a share of credit for a candidate victory.

As the Pamplin Media Group editorial says, "Being called independent is inherently attractive, but even Independents will have to stand for something."

Trump, Clinton and 'Don't Know' Top Oregon Poll

While Donald Trump and Hillary Clinton topped an Oregon poll, a significant number of voters are still undecided.

While Donald Trump and Hillary Clinton topped an Oregon poll, a significant number of voters are still undecided.

Oregonians may not be so different after all. A new political poll conducted for Oregon Public Broadcasting shows Donald Trump has the largest percentage of Republican support and Hillary Clinton holding onto her frontrunner status with Bernie Sanders in hot pursuit.

The poll, conducted by DHM by surveying 536 Oregonians in late July, showed Trump capturing 18 percent of Republican support. The survey occurred before the first GOP presidential debate, so the results may be different now. But it still provides a window into GOP preferences and awareness of candidates. Lindsay Graham and George Pataki, for example, registered a goose egg on the survey.

Scott Walker was the nearest competitor to Trump at 12 percent. Walker was tied with "don't know." Jeb Bush, the presumed frontrunner among establishment Republicans, received 11 percent and Ted Cruz 10 percent.

Candidates that some observers believe will survive the culling of the current 17-candidate GOP field and become major factors – Marco Rubio and Chris Christie – didn't poll at that well. Rubio had 3 percent and Christie just 2 percent.

On the Democratic side of the race, Clinton checked in with 44 percent support, but Sanders attracted 39 percent. And that was before his overflow political rally last weekend in Portland.

Clinton polled strong among Democratic women and older voters. Sanders appealed to younger voters.

Even though Trump sat on top of the poll, only 12 percent of GOP respondents believe he has a chance to win their party's nomination. Almost 40 percent predicted Bush would become the 2016 Republican standard-bearer.

Early polling can prove inconsequential and dead wrong as the actual primary season nears, starting with presidential caucuses in Iowa next January. More debates and candidate dropouts also will influence the outcome.

Oregon Lags in Full-Time Job Growth

Oregon is still not an easy place to find full time employment.

Oregon is still not an easy place to find full time employment.

Oregon finds itself in uncomfortable company as one of the hardest states in the nation to find a full-time job, according to an analysis by a group called 24/7 Wall Street.

While Oregon's unemployment rate has dropped to 5.5 percent, its underemployment rate stands at 12.8 percent, largely because of a high number of people who are involuntarily part-time workers.

"Individuals employed part-time for economic reasons accounted for 5.4 percentage points of Oregon’s underemployment rate of 12.8 percent, the fourth highest incidence of involuntary part-time employment nationwide," writes Thomas Frohlich on the 24/7 Wall Street website.

"These workers cited seasonal declines in demand, inability to find full-time work or unfavorable business conditions as reasons for seeking part-time employment," Frohich says. "Such high levels of financial stress, even among the state’s employed population, likely led to greater reliance on government subsidies. Nearly one in five Oregon residents relied on food stamps, the highest proportion nationwide. Many SNAP recipients were likely also part of the underemployed population."

If any consolation, Oregon wasn't the hardest state in which to find a full-time job. That honor fell to Nevada, with an underemployment rate of 15.2 percent. Involuntary part-time workers made up 6.4 percent of the underemployment percentage. Other states with worse underemployment percentages than Oregon were California (14 percent), Arizona (13.8 percent) and West Virginia (13 percent).

Rounding out the bottom 10 were Mississippi (12.8 percent), South Carolina (12.8 percent), Michigan (12.6 percent), Georgia (12.5 percent) and Rhode Island (12.4 percent). South Carolina and Mississippi ranked slightly better than Oregon because their unemployment rates were higher at 6.6 percent and their involuntary part-time worker percentages were lower. South Carolina also experienced a 3.4 percent labor force growth rate from 2007-2014, compared to only a 1.1 percent growth rate in Oregon.

California and Nevada ranked worse than Oregon even though both states have more robust labor force growth at  5.1 percent and 4.8 percent, respectively. Arizona's labor force growth rate only totaled 1.9 percent, while West Virginia's labor force actually declined by 2.6 percent.

24/7 Wall Street calculated the underemployment rate in individual states by adding together those who are unemployed, marginally attached workers, discouraged workers and involuntary part-time workers.

Oregon Senate Republicans tweeted about the report, noting "It's time to put family-wage job creation 1st in the #orleg."

24/7 Wall Street is based in New York and publishes online financial news and opinion. The article was based on statistics generated by the U.S. Bureau of Labor Standards.

The Approachable, Pragmatic Governor Brown

Governor Kate Brown is a self-described people person and a stark contrast to her predecessor, John Kitzhaber.

Governor Kate Brown is a self-described people person and a stark contrast to her predecessor, John Kitzhaber.

In a New York Times feature story published earlier this month, Governor Kate Brown comes across as the life of the party, in stark contrast to the reclusive reputation of her predecessor, John Kitzhaber.

Brown says of herself, "I'm a people person." Kitzhaber, a former emergency room doctor, was often characterized by friends and foes alike as someone happy to sew up a patient without having to strike up a conversation.

Brown's ascension as Oregon's governor when Kitzhaber resigned amid a building ethics scandal was serendipitous because of the marked difference in their personalities. She bounds down Capitol hallways where Kitzhaber was rarely spotted. She banters with lobbyists, whereas Kitzhaber tried to avoid them. She chose to live in Mahonia Hall, the governor's official residence, which Kitzhaber treated more like a Salem bed and breakfast.

By all accounts, Brown's more outgoing, approachable style has been viewed as a welcome respite from Kitzhaber, who one lobbyist called a political ghost. She is seen as politically popular, which doesn't hurt as she faces an election in 2016 to fill the remaining two years of what was Kitzhaber's unprecedented fourth term.

The Times cites a poll taken in May showing Brown has earned a 55 percent job approval rating. She gets good marks in the poll from 40 percent of people who identify themselves as Republicans. Numbers like that tend to scare off would-be challengers, even those who whisper that Brown is a liberal Portland Democrat. That's not always a good thing for voters living outside Portland, even just outside Portland.

While Brown's voting record supports the label of "liberal," her political style is more inclusive. As Senate majority leader, Brown listened to almost anyone willing to schedule an appointment, without turning a conversation into a polemic. The term "pragmatic" would have been fairly applied to her as she understood her role was to find common ground, not stake out high-minded positions.

Brown has stepped into the higher pay-grade as governor with political grace. She encircled herself with new staff, but retained the policy staff left behind by Kitzhaber, which provided a smooth transition working with a legislature already underway.

Brown generally supported the main thrust of Kitzhaber's agenda and didn't try to imprint them with her own stamp to gain glory. Instead, she focused on ethics legislation, much of which she had introduced in her role as secretary of state.

Late in the 2015 session, Brown attempted to engineer a compromise to pass a transportation funding bill that business and labor groups had pushed. The compromise required backing off somewhat or entirely from a clean fuels carbon reduction measure passed earlier in the session, despite strong Republican protests, in part because the bill had been tainted in their minds by its association with Cylvia Hayes, the first lady under the Kitzhaber administration.

Some in the environmental community were upset at Brown's willingness to roll back the clean fuels measure, but others took it as a positive sign that she wasn't a captive to our ideology.

Kitzhaber was renowned for his ability to get people with disparate interests in a room and pound out a path to progress that often avoided politically divisive ballot measures. That is role Brown has yet to fill, but may have a chance as the November 2016 general election ballot could be loaded with initiatives from a variety of political directions.

For now, the Times noted, Brown is demonstrating she isn't anything like Kitzhaber. When a group of Chinese tourists wandered into the Governor's office, Brown came over to talk, encouraged them to take the formal tour and posed for a picture. There aren't many pictures of Kitzhaber doing that.

A Session of Accomplishment and Failure

The 2015 Legislative session ended last night, and it included a mixture of wins and losses.

The 2015 Legislative session ended last night, and it included a mixture of wins and losses.

Legislative sessions are remembered for what they accomplished – or what they didn't. The 2015 session might be remembered for both.

The Democratically controlled House and Senate pushed through bills that automatically register to vote anyone with a driver's license, require criminal checks for private gun sales, expand access to contraception for women, require paid sick leave and retain a low carbon fuel standard for motor vehicles.

There was broad consensus on a 4-year extension of the hospital tax as part of a package to sustain Medicaid funding and an early vote on a K-12 budget that gives local school districts time to plan around the actual amount of money they will receive. Legislation passed to regulate police body cameras and forbid racial profiling by law enforcement officers.

Legislators avoided an uglier battle by finding a compromise on gain-share revenues – the amount of state tax revenues returned to communities that enter into large property tax abatement-for-jobs deals with major employers such as Intel. Just before adjournment, legislators approved a $1 billion bonding measure that includes $300 million for school construction.

On the flip side, the 2015 legislative session failed to pass a transportation funding package, which Republicans refused to support unless some or all of the low carbon fuels measure was repealed. There were frantic negotiations around some compromise, but in the end a core of House Democrats refused to budge and the plan died.

Speaker Kotek's attempt to raise the state's minimum wage faltered, as did the effort to require so-called inclusionary zoning for affordable housing units. Senate President Courtney also suffered a high profile defeat when House Democrats failed to go along with $300 million in bonding for seismic retrofitting and restoration of the Oregon Capitol, Courtney’s pet project these past several years.

Lawmakers didn't try to undo the personal income tax kicker, which will send back around $500 million to Oregon taxpayers next year. They also did very little to deal with rapidly rising pharmaceutical costs that threaten to overrun cost savings elsewhere in the health care system.

The 2015 session started fast as Democrats punched through their key agenda items and as Governor Kitzhaber's ethics scandal deepened, leading him to resign in February. Secretary of State Kate Brown, herself a former lawmaker, stepped in and provided a seamless transition and leadership on most legislative issues. Brown put her personal signature on several ethics bills that passed.

The entire session took place under the cloud of how and when to implement Measure 91, the voter-approved initiative to legalize recreational marijuana. Lawmakers allowed the legalization to take effect July 1, even though state-approved dispensaries won't open until later. They settled on how and by whom marijuana can be taxed, but stalled on issues such as the sale of edibles made from marijuana.

Lawmakers return to Salem next February for a short 35-day session. A number of state officials and legislators will have decided by then whether to run for other or higher office in the 2016 general election. House Majority Leader Val Hoyle already has stepped down to start her campaign for secretary of state. Brown is expected to run for the remaining two years of Kitzhaber's gubernatorial term. Democratic Rep. Tobias Read of Beaverton wasted little time in announcing his bid to run for state treasurer. Treasurer Ted Wheeler, who is barred from seeking re-election, has been mentioned as a potential candidate for another statewide office or mayor of Portland. Kotek's name also has been mentioned as a mayoral challenger in Portland. 

Legislative End Games in Play

Every legislative end game boils down to budgets and taxes, but in Washington, the end game may involve furloughs for some state employees, while in Oregon it may mean higher prices for cigar smokers.

Every legislative end game boils down to budgets and taxes, but in Washington, the end game may involve furloughs for some state employees, while in Oregon it may mean higher prices for cigar smokers.

The final countdowns in the Washington and Oregon legislatures have very different characters. Washington's governor is sending out notices to state employees about a partial government shutdown, while Oregon's governor is working across party lines to negotiate a transportation funding measure.

End games in state legislatures can be very similar. Big issues left to the end become magnets for marathon haggling. Lawmakers who have some political leverage in theirs committees or caucuses exert it to bring home a prize for his or her district or salvage a personal legislative priority. Almost always, end games center on budgets and taxes.

The Washington budget hovers around $38 billion, but negotiators are hung up over a difference of about $350 million. Democrats, who control the Washington House, wanted to close the gap with a capital gains tax. Republicans, who control the Senate, wanted to plug the hole with spending cuts.

The compromise, which House Democrats have floated, is to generate some additional revenue by closing "loopholes." One of those loopholes is the sales tax exemption for Oregon residents.

There is little chance in Oregon, where Democrats control the House and Senate by solid margins, of a budget meltdown. Oregon lawmakers much earlier in the session approved the K-12 school budget and continuation of Medicaid funding. Big budgets for the Department of Human Services and the Oregon Health Authority are on their way to passage.

Lawmakers in Oregon are wrestling with how to pass a transportation funding bill, increase the minimum wage and a relatively small tax measure that affects things such as fine cigars and long-term insurance tax credits to pay for extension of low-income tax credits, which will expire.

The tax hike married to extending tax credits has drawn partisan boos from House Republicans who see it as a way to skirt the constitutional requirement for a three-fifths majority to pass tax increases. A key Senate Democratic leader hasn't sounded too thrilled with the idea, either.

Tensions will build and lawmakers will be run through the gauntlet so they are weary enough to bend just enough to vote for what is needed to go home. But the road home in Washington is significantly more dicey, especially for the state employees who will be receiving furlough notices.

The Return of Monica Wehby

Monica Wehby resurfaced today on Oregon's political map by announcing a relaunch of her campaign website, which she says will be dedicate to electing Real Republicans  and holding all politicians accountable.

Monica Wehby resurfaced today on Oregon's political map by announcing a relaunch of her campaign website, which she says will be dedicate to electing Real Republicans  and holding all politicians accountable.

Unsuccessful U.S. Senate candidate Monica Wehby is returning to the political ring with a PAC, a legislative scorecard and data analytics that she says will hold politicians accountable.

Wehby disclaims any interest in running for office again. In an email to her previous supporters, she writes, "We are dedicated to bringing us back to the sort of fundamentals that define realistic Republicans who can win in Oregon and across the Pacific Northwest."

She elaborated on realistic Republicans, "We need the backing of fellow Real Republicans and other like-minded Americans dedicated to holding our representatives and government servants accountable to fiscally conservative principles, dedication to pro-business polices and private sector job growth, as well as the protection of individual freedom from government intrusion into our private lives."

The announcement of a relaunched Monica PAC seemed a nudge ahead of much new content. The website still has a lot of leftover material from Wehby's race to unseat Oregon Senator Jeff Merkley last year. Her email to past supporters mentions a legislative scorecard, but it doesn't appear on the website, either.

Nor does the name appear of the "lawmaker who doesn’t stand up for the principles central to our democracy and backs policies that undermine your individual liberty," which the email highlights. Speculation is this refers to Senator Chuck Riley, D-Hillsboro. A call to the Monica PAC office asking for a link to the legislative scorecard wasn't fruitful.

All in all, the announcement of Monica PAC didn't exactly have the feel of a complete sentence.

Wehby, who has returned to full-time work as a pediatric neurosurgeon, gave an interview to Jeff Mapes of The Oregonian in which she said she wasn't ready to drop out of politics, even if not running herself for office. " I may have lost my election fight, but I’m not giving up on my dedication to public service. It’s too important to the future of Oregon and our nation."

Perhaps the most intriguing aspect of Wehby's announcement was the use of analytics to ferret out the views of Oregonians. "Monica’s Scorecard will soon incorporate real-time data on what Oregonians really think – what they say to their friends, family, and others on the Internet and social media, not just to pollsters. We will make our elected officials and government bureaucrats understand what they don’t want to, what real voters actually need and want, not just what they are told by special interests."

Using the names Monica PAC and Monica's Scorecard are tells that Wehby may have other political ideas in mind. In a state with few high-profile Republicans, Wehby has some degree of name familiarity. She could argue that her failed Senate campaign was a trial run that helped her learn the ropes and become a more viable statewide candidate.

With just about every major statewide office in play, Republicans could use some candidates. The real message of Monica's PAC is that she is warming up for a future political role.

With PERS Benefits Off the Table, Time to Reduce Costs

Oregon's gamble on trimming public retiree benefits failed and it now faces a $13.75 billion Public Employee Retirement System deficit, with few ideas on the table of what to do next. Photo by The Oregonian. 

Oregon's gamble on trimming public retiree benefits failed and it now faces a $13.75 billion Public Employee Retirement System deficit, with few ideas on the table of what to do next. Photo by The Oregonian. 

A lot of hand-wringing, but not much action has followed the Oregon Supreme Court's decision invalidating many of the Public Employee Retirement System changes aimed at reducing the state's unfunded liability.

Public employee union officials are clucking, "We told you so." Legislators are conceding there is little more that could be done to trim retiree benefits. And state and local public agencies are bracing for a round of stiff PERS contribution rate hikes in 2017.

If you can't touch retiree benefits, all that's left is reducing costs associated with PERS. And lo and behold, the legislature is sitting on a bill that backers say could save $2.7 billion over the next 20 years in expenses to manage public retirement investments.Under Senate Bill 134, an Oregon Investment Department would be formed as an independent agency, much like SAIF Corporation. The department would be overseen by the Oregon Investment Council and responsibility to administer public retirement funds would fall to a professional investment manager, not the state treasurer. The treasurer would be the vice chair of the Council.

Even though this set-up would require hiring more staff members to manage a portfolio and assess risk, it would enable Oregon to free itself from the higher-priced consultants it pays for now. One benchmarking analyst said Oregon is a “high-cost fund compared to its peers, in large part because of Treasury's heavy reliance on outsourcing.” This is where the projected savings comes into play.

Cost-cutting has the drawback of not appearing to reduce the unfunded liability, but the advantage of reducing the outflow of cash to manage public retirement funds, while "in-sourcing" investment management duties.

Republican lawmakers may fret about hiring more state workers, but they may see increased local employment as a better alternative than sending big sums to Wall Street investment management firms.

The legislation, introduced by Treasurer Ted Wheeler, nearly passed in the short 2014 legislative session. The Oregon Investment Council expected it to fly through the 2015 session. But it hasn't.

Senate President Peter Courtney has sat on the legislation this session out of fear of creating another "Cover Oregon" calamity. But that was before the Oregon Supreme Court ruling on so-called PERS reforms. Now the legislature is staring at a financial tsunami far worse than Cover Oregon.

Wheeler's uncertain political status may be another contributing factor. Deemed constitutionally unable to run for another term as state treasurer, Wheeler appears to be considering his options. Many of those options could involve other elected officials – in the governor's office and in key legislative leadership positions. These potential opponents may not feel a need to give Wheeler a perceived "political victory."

While Courtney's reluctance and other elected officials' wariness are part of the normal political process, the PERS problem may force everyone to rise above "normal."

At a minimum, giving the Oregon Investment Department and the savings it might generate a second look could form the basis of a broad coalition business-labor coalition willing to find ways to nibble away at the problem without threatening retiree benefits. It seems like a much better use of time than hand-wringing.


2016 Election for All Seasons

Oregon voters will have lots to ponder next year, including a potential primary challenge from the left to Oregon Senator Ron Wyden. Photo by Ron Wyden Flickr Account. 

Oregon voters will have lots to ponder next year, including a potential primary challenge from the left to Oregon Senator Ron Wyden. Photo by Ron Wyden Flickr Account. 

Next year's election is shaping up as a doozy, with an open race for President, a potential challenge on the left to Oregon Senator Ron Wyden and a bid by Governor Kate Brown to serve the final two years of what would have been John Kitzhaber's unprecedented fourth term.

There also will be open races for Oregon secretary of state and treasurer and possibly for Oregon labor commissioner if incumbent Brad Avakian decides to seek another office. Republicans will try to chip away at the firm grip of Democratic control in the Oregon House and Senate. And there could be a wild assortment of ballot measures.

The only Oregon statewide elected official not on the ballot in 2016 is Senator Jeff Merkley, who won re-election last year.

The most intriguing race involves Wyden, who has served in the U.S. Senate since he succeeded Bob Packwood following his resignation. His hardworking style and his rising Senate seniority should make his re-election bid a walk-over. However, labor and environmental interests, upset with Wyden's support for fast-track authority on international trade agreements, are threatening a primary challenge. Nobody so far has taken the bait. Congressman Peter DeFazio, who lost to Wyden in a tightly contested Democratic primary in 1996, has ruled out a challenge in 2016.

Brown, who ascended to the governorship as secretary of state when Kitzhaber resigned, could face opposition in both the primary and general election. One possibility is Treasurer Ted Wheeler, a Democrat who has been ruled ineligible to run for re-election because of term limits. Wheeler was appointed to fill the remainder of a term won by Ben Westlund who died in office. Wheeler had trained his political sights on succeeding Kitzhaber in 2018.

Several lower-profile Republicans have signaled interest in the gubernatorial race, but the GOP is likely to field a more well-known candidate for what is essentially an open race for governor, such as former candidate Allen Alley. Two interesting hopefuls are popular Gresham Mayor Shane Bemis and Rep. Sherrie Sprenger from Lebanon, who is a former school board member and police officer.

Jeanne Atkins was appointed secretary of state by Brown, but took the position as a caretaker. This is a seat that may be attractive to Avakian or Wheeler on the Democratic side. It also is being eyed by House Majority Leader Val Hoyle and Senate Majority Leader Diane Rosenbaum. Chances are these four potential candidates will try to sort out who runs for what office, especially since the treasurer's seat will have no incumbent either. No Republican has burst into frontrunner status for secretary of state or treasurer.

Attorney General Ellen Rosenblum is expected to seek re-election and may not face any serious challenge. Oregon's five members of Congress will be up for re-election, but none of them have attracted what appears at this point to be a serious challenger.

Oregon has become a solid blue state, making it hard for Republicans, especially ones who can make it through their own party's primary, to vie seriously for statewide positions. But there are a lot of questions going into 2016 that center on the open presidential race. While Hillary Clinton looks like a shoo-in to win the Democratic nomination, the GOP field is a jumble with as many as a dozen potential candidates, none of whom have at this point more than low double-digit support in polls.

While Oregon is rarely a presidential nominee kingmaker, the race could still be raging by next May, which means there will be intense GOP political activity that could elevate the name familiarity of down-ballot candidates for statewide office. A strong ground game is an absolute necessity for Republicans who have to make a dent in the Willamette Valley vote count.

A competitive presidential election and emotionally charged ballot measures can generate a large voter turnout, which can influence some legislative and local elections.

Oregon GOP strategists may opt for an all-out effort to shrink the Democratic majority in the legislature. The vast majority of legislative seats are heavily dominated by one party or the other, so the swing votes tend to be in a handful of suburban districts in Clackamas and Washington counties. Democrats will seek to hold on to their grip and possibly strengthening it in the Oregon Senate.

Some reports suggest House Speaker Tina Kotek is weighing a challenge to Portland Mayor Charlie Hales. Kotek also has been listed as a potential Democratic gubernatorial candidate, though her political appeal overlaps with Brown's.

If Kotek and Hoyle run for other offices, then House Democratic leadership will face a shakeup after two sessions of relative political stability. That would open the door of political opportunity to move up for ambitious legislators such as Rep. Jessica Vega Pederson of Portland. 

Brown Signals Her Course of Action

Kate Brown held her first press conference today as Oregon's governor and sent clear signals about her legislative priorities, views on key issues and plan to move into Mahonia Hall.

Kate Brown held her first press conference today as Oregon's governor and sent clear signals about her legislative priorities, views on key issues and plan to move into Mahonia Hall.

Governor Kate Brown gave the first indications of her immediate priorities at a press conference today. She called dealing with stalled negotiations that have caused shipping delays at West Coast ports, including Portland, a top priority.

Just two days after replacing John Kitzhaber, who resigned amid an influence-peddling scandal, Brown said her predecessor didn't ask for a pardon and it would be too soon and too speculative for her to comment on whether she would consider granting one. The new governor indicated  she would work to release public records related to Kitzhaber and Cylvia Hayes as soon as possible.

Brown said she will maintain Kitzhaber's focus on early childhood learning, as well push for reductions in K-12 classroom size and closing the achievement gap in public schools. She said she supported requiring vaccinations for all children attending public schools, with exemptions only for medical reasons.

Following up on her own agenda as secretary of state, Brown said she will urge the legislature to approve her voter registration bill that would sign up anyone automatically if they have a driver's license. House Bill 2177 passed out of the Oregon House shortly after Brown press conference.

On other important issues, Brown said:

  • She supports increasing Oregon's minimum wage;
  • She expressed support for lower carbon fuel standards;
  • She will keep in the place the moratorium on state executions and agrees with Kitzhaber on the need for a broader conversation over the death penalty;
  •  She will work with legislative leaders on a possible transportation funding package;
  • She will engage legislators in negotiations over the 2015-2017 budget; and
  • She has dedicated a staff member to deal with ethics and public records reform issues.

On more personal issues, Brown said she plans to move into Mahonia Hall and decided to keep several senior staff members who worked for Kitzhaber to maintain policy continuity. She has named her own staff director, legal counsel and communications chief.

Not Just Another Day at the Capitol

Kate Brown assumed the governorship in Oregon, but her swearing in was hardly more than a coffee break in a legislative session off to a very fast start.

Kate Brown assumed the governorship in Oregon, but her swearing in was hardly more than a coffee break in a legislative session off to a very fast start.

The Oregon legislature took time out Wednesday morning to witness the swearing in of new Governor Kate Brown before returning to its fast-paced start that has startled many observers and caused lobbyists and staffers to hustle like they do at the end of sessions.

In a brief six-minute speech, Brown paid respect to the contributions made by former Governor John Kitzhaber, who resigned amid an influence-peddling scandal, then made clear she wouldn't allow any family members close to state policymaking or payrolls.

While no one downplayed the significance of Brown's ascension to the governorship (she is the 38th governor, but only the second female governor in the state's history), neither she nor legislative leaders made a big deal of the transition. Legislative work continued as if nothing really big had happened. That may be because Brown is no stranger to the building or the process. She is a known quantity in Salem.

On her first day in office, Brown joined the governors of California and Washington in calling for an end to a labor dispute that has crippled West Coast ports and stranded cargos, including perishable farm products from rural parts of Oregon. Trouble on the docks was doubly on Brown's first-day agenda after Hanjin announced last week it was abandoning use of Terminal 6 at the Port of Portland because of what it called low productivity.

Day two of the Brown tenure was greeted by the release of the latest quarterly economic forecast, which predicted the state's quirky personal income tax kicker would be triggered. The good news is that the state's economy is performing better than projected. The bad news is that state tax revenue will exceed the 2 percent threshold that triggers the kicker and rebates to taxpayers.

The projected kicker rebate, which would take the form of credits on 2015 tax year returns, is $349 million. For legislators — and the governor — that represents a sizable hole in the state budget.

State economists took the occasion to remind Oregonians we have one of the most volatile tax systems because of a heavy reliance on personal and corporate income taxes, which ebb and flow along with economic downturns and upturns. The economists also noted that states such as Washington that rely heavily on sales taxes face the challenge of an eroding tax base as populations age and they buy fewer big-ticket items.

These are just a few of the challenges raining down on Brown. She also must try to satisfy demands for more K-12 public education spending, continue health care transformation efforts that include an extension of a hospital provider tax and address a push from higher education for more financial support.

When Brown served in the legislature, including as Senate majority leader, she focused much of her personal energy on civil rights, mental health and juvenile justice issues. As secretary of state, Brown pushed for Oregon's initiative and referendum system reforms, performance audits and more accessible voter registration.

Because Brown has been thrown into an already boiling pot, she is unlikely to recommend a hugely different menu of priorities than her predecessor. What will be most noticeable is a difference in style. As majority leader, Brown was available to meet and listen to advocates. She looked for compromise. She dispensed realistic political advice. That's unlikely to change, even though she has changed offices.

Estella's Brilliant Bus

Estella Pyfrom brings computer technology to underprivileged students and underserved neighborhoods on the Brilliant Bus that she bought and equipped using her own public school teacher retirement savings.

Estella Pyfrom brings computer technology to underprivileged students and underserved neighborhoods on the Brilliant Bus that she bought and equipped using her own public school teacher retirement savings.

Super Bowl ads may be a strange place to look for great education reform ideas, but the one about Estella's Brilliant Bus may qualify.

Estella Pyfrom, who retired after 50 years as a Florida public school teacher and guidance counselor, is doing something about the digital divide in classrooms, which she says is real and getting worse. Her Brilliant Bus mobile learning center brings technology to under-served communities and underprivileged students.

Pyfrom's work has not gone unnoticed. She was named a CNN "Hero," but she didn't become a household word until Microsoft made her the center of a Super Bowl commercial. That exposure could lead to a rapid expansion of her program or clones just like it in other parts of the country.

After she retired in 2009, Pyfrom took money from her personal savings to buy and equip a bus with 17 computer stations and high-speed Internet access. Since then, she's plugged in thousands of kids without access to a computer at home or school and who would otherwise be unplugged to the opportunities for online learning.

The Brilliant Bus is all business. Students must log into their own accounts. Gum is a no-no, along with Facebook. What students will find is a busload of educational software linked to the educational curricula in public schools. Pyfrom and members of her team monitor student progress and only allow students to advance to the next level when they display 90 percent proficiency in a subject area. Older students can get help with GED or college preparatory material, as well as tune into anti-bullying classes.

By all indications, Pyfrom and her Brilliant Bus are making a difference in the academic success of the students they reach.

Parents learn about computers through the program, too, so they feel less embarrassed and can be more supportive of their students. The Brilliant Bus has been used to train up entire neighborhoods as well on things such as online banking, job searches and resume writing.

Nearing 80, Pyfrom shows no signs of slowing down or trimming her aspirations. She has become a symbol of human empowerment.

"I don't think about what I'm not able to do or not going to be able to do," Pyfrom told CNN. "I plan for the things that I think I'm going to do, need to do and want to do. And I think most of them are going to happen. We've got to keep rolling. We're going to keep taking the service to the neighborhoods, and we are going to keep making a difference."

Sewage Brewage

Oregon is known for its creative microbrews. Now it may be known for sewage brewage.

Oregon is known for its creative microbrews. Now it may be known for sewage brewage.

Oregon is known for its creative microbrews. Now it may be known for sewage brewage.

Clean Water Services (CWS), Washington County's wastewater and stormwater utility, wants to stage a competition this summer for brew-masters using water coming directly from its water treatment plant pipes.

Coors touts Rocky Mountain spring water as the source for its beer, but brew-masters in the CWS competition will work with water some say has questionable purity. However, CWS spokesman Mark Jockers says, the water undergoes extensive high-purification treatment and "is the cleanest water on the planet." 

A cold beer on a sunny summer day is reason enough to set up a brewing kettle, but Jockers says the friendly competition is intended to demonstrate there is life for sewer water after treatment. If people will drink it, then they will be comfortable with many other uses, which in turn can conserve precious water resources. 

Clean Water Services is not your typical wastewater utility. It is sponsoring a program called Tree for All with the goal of planting 1 million native trees and shrubs in a single planting season. A CWS insider said the program may miss its goal and wind up planting closer to 2 million trees and shrubs. This is not the kind of "failure" most people identify with government.

The utility mines its wastewater streams to extract minerals and nutrients that, through a patented process, it turns into what it calls a stream-friendly fertilizer. CWS is restoring a large wetland adjacent to its Forest Grove wastewater treatment plant to expand its capacity with what it calls green infrastructure. 

So making beer at the tap end of a sewage treatment plant pipe doesn't seem all that out of character.

According to press reports, at least 12 home brew-masters have signed up for the CWS competition. Home brewer Jeremy Landers told Keely Chalmers of KGW-TV that he is looking forward to the opportunity to use water purer than what he can get out of the faucet in his house.

More pristine water, Landers says, gives brewers more latitude of what to add to create a unique beer flavor. The taste, he explains, comes totally from the brewer's creativity, not the DNA of the water in the beer.

Faint-hearted folks may turn up their nose for so-called sewage brewage. But a lot of people will be eager to stick their noses into a pint.

Asking the Right Questions

Asking the Right Questions.jpg

What is the state getting for the money it is spending?NOTE: A version of this blog, written by CFM Senior Partner Dave Fiskum, first ran in this space two years ago. As legislators return to the Capitol early next month for the 2015 session, it is appropriate to run it again.

If state government is going to operate more effectively and efficiently, then there are three questions policymakers should ask as they review individual pieces of legislation.

1.  Is there an appropriate role for government to play?

This is a question seldom asked, at least on the record. Many policymakers simply assume that, if there is a problem, then there should be a state response to it.  The evidence is found in the 3,500 to 5,000 bills introduced every legislative session.

If the question was asked routinely, the answer would not automatically be "yes" or "no," but would depend on the specific situation. Often, the simple act of asking the question and considering the answer would be a step in the direction of aligning state government programs to available resources.

Policymakers should reserve the right to say there is no appropriate role for state government in, for example, a battle between two business groups.

A "yes" answer, by contrast, could apply to a question about organizing health care for indigent Oregonians or offer financial and/or parenting support for single parents and their children.

2.  What is the state getting for the money it is spending?

Call this "performance-based contracting." It sounds obvious that state contracts should be based on this premise. But performance-based contracting is the exception rather than the rule. In fact, in social services law in Oregon, the first instance of the use of the phrase occurred in the 2011 legislative session when lawmakers passed and the governor signed Senate Bill 964, now ORS 418.190-195. It deals with programs designed to provide services to Oregon's foster children.

If you are a state government services provider, you should compete for a contract on the basis of what you pledge to deliver.  Then, you should keep a contract if you deliver on the pledge — or lose the contract if you don't.

3.  How will state action affect the private sector – especially individual and corporate taxpayers on whom the state depends for the money to fund its operations?

Jeb Bush, the former Florida governor, now a nearly declared candidate for President in 2016, wrote this in a Wall Street Journal piece:

"We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And, we need to let people enjoy the fruits of good decisions, even good luck.

"That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or to do nothing. People understand this. Freedom of speech, for example, means that we have to put up with a lot of verbal and visual garbage in order to make sure that individuals have the right to say what needs to be said, even when it is inconvenient or unpopular. We forgive the sacrifices of free speech because we value its blessings.

"But when it comes to economic freedom, we are less forgiving of the cycles or growth and loss, and of failure and success that are part of the realities of the marketplace and life itself.

"Increasingly, we have let our elected officials abridge our own economic freedom through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see a criminal fraud and we demand more laws. We see an industry dying and we demand it be saved. Each time, we demand, "Do something...anything."

Asking and answering the issues Bush poses would go a long way toward creating appropriate limitations on the role of government, both in Oregon and nationally.

Expecting Oregon policymakers to ask and answer all three of these questions would produce a more effective and efficient state government.

State Taxes, Volatility and the Kicker

As tax revenues in Oregon once again reach the level to trigger corporate and personal kickers, we’re likely to see lawmakers talking about tax reform.

As tax revenues in Oregon once again reach the level to trigger corporate and personal kickers, we’re likely to see lawmakers talking about tax reform.

Oregon's tax revenue system is slightly more volatile than the all-state average, but less than some critics think based on a new study by Pew Research. One volatile element not included in the Pew assessment is the personal income tax kicker, a unique and quirky procedure that rebates to taxpayers money that exceeds projected revenues by two percent or more.

According to Pew, Oregon's state tax regime volatility rating is 6.4 percent, compared to an all-state average of 5 percent. The most volatile state tax regimes are ones heavily dependent on severance or extraction taxes. Alaska has the most volatile state tax system at 34 percent.

Oregon depends heavily on personal and corporate income tax revenues, which rise and fall in concert with broader economic trends. When times are good, Oregon's income tax system generates a growing pot of money.

If times are too good, Oregon's personal income tax kicker is triggered, requiring a chunk of incremental revenue to go back to taxpayers.

Triggering the personal and corporate income tax kickers could happen again this year, forcing state lawmakers to contend with a hole in their budgets. In the latest quarterly economic forecast, state economists said the corporate kicker is almost certain to be triggered and we are very close to triggering the personal kicker.

The corporate kicker is in the $50 million range and poses less of a problem because that revenue is now dedicated to schools instead of business bottom lines. The personal income tax kicker, if triggered, would likely be in the $300 to $500 million range, enough to pinch the state budget, but not anything like the $1 billion bite in the 2005-2007 biennium, which at the time represented 10 percent of Oregon's General Fund. 

Reducing volatility has been a long-time goal of governors and legislators. It is the source of most drives for "tax reform." Arguments generally come down to finding a "balanced" state tax system, which usually means one that derives revenue from both income and sales. The argument for less volatility is that it makes it easier for state budget writers to do their jobs. 

Sales tax advocates point to Washington, which has a sales tax but not personal income tax, as an example of a more stable tax system. The Pew research shows Washington's tax system volatility is 4.6 percent. 

South Dakota, which relies on a sales tax, has the least volatile tax regime at 3.6 percent, Pew says. The next lowest state in the ranking at 2.9 percent is Kentucky, which has both personal income and sales taxes.

The Process of Regulating Pot

Marijuana edibles are just one of the significant differences and public health challenges facing regulators in Oregon who now regulate liquor.

Marijuana edibles are just one of the significant differences and public health challenges facing regulators in Oregon who now regulate liquor.

With voter approval of marijuana use comes the challenge of regulating it. Liquor regulation provides important precedents, but may not go far enough.

There will be similarities in regulating where marijuana can be sold, requiring accurate labels and preventing sales to minors.

But marijuana poses other challenges that have been highlighted by people knee-deep in developing original regulation in Colorado and elsewhere. For example, the amount of alcohol and its effect on individual adults can be roughly calculated arithmetically. That may be less true of the potency of different types of marijuana.

Marijuana edibles represent a significant challenge. Candy is sold with small amounts of liquor, but they convey far less of a potential jolt than a marijuana cookie, which is designed to transport the buzz offered by marijuana.

Another unique challenge is how to integrate the cultivation and sale of medical marijuana with recreational marijuana .

Rachel O'Bryan, cofounder of Smart Colorado, a nonprofit formed to weigh in on marijuana regulation, wrote in an op-ed in The Sunday Oregonian that someone who represents public health concerns, especially for youth, must be at the table writing rules for Oregon. She wrote: 

"Provisions that likely would not have existed but for Smart Colorado included: potency and contaminate testing; health warnings and a universal marijuana symbol; childproof packaging; per-serving and per-package THC limits; and restrictions on marketing and advertising targeted at youth." 

The backdrop for the regulation of marijuana is not law enforcement versus recreational drug users. Legalized marijuana is a hot new product category that financiers and corporate interests are pursuing. They will be the big rollers in the room when rules are discussed and their motivation, O'Bryan says, will be to sell product and turn a profit.

Oregon is a so-called "control" state for distilled spirits. The Oregon Liquor Control Commission sets the rules, with a strong influence from a constituency that includes groups such as Mothers Against Drunk Driving, which counterbalance pressure from liquor manufacturers, liquor agents and others who would like to sell liquor. O'Bryan argues a similar constituency will be needed to keep marijuana regulation in balance.

Kitzhaber Wins Re-election, But by Narrow Margin

Governor John Kitzhaber claimed an unprecedented fourth term without a majority, and the measure that gained the widest national headlines was approval of Measure 91 to legalize the use, sale and production of marijuana.

Governor John Kitzhaber claimed an unprecedented fourth term without a majority, and the measure that gained the widest national headlines was approval of Measure 91 to legalize the use, sale and production of marijuana.

Democrats retained and even strengthened their grip on control of the state house and legislature as Oregonians said yes to legal weed and no to labeling of genetically modified foods and the much touted top-two primary. The story wasn't so good for Democrats nationally as they saw their majority in the U.S. Senate evaporate, giving Republicans control of both houses of Congress.

The story of the night was the relatively narrow victory by Governor John Kitzhaber, who claimed an unprecedented fourth term without a majority. On a series of critical news reports about First Lady Cylvia Hayes, including charges she may have leveraged her influence with the governor for personal gain, Kitzhaber's double-digit lead in the polls shrunk to a 5 percentage point victory.

The tighter-than-expected race appears to be more a reflection on Kitzhaber than his GOP opponent Dennis Richardson and raises questions about how the governor will fare going forward, especially if the Hayes scandals continue to dog his administration.

The other race of interest and significance involved a rematch between former Rep. Chuck Riley and incumbent GOP Senator Bruce Starr. Riley led in early voting results, but Starr now hows a thin 123-vote lead in a race that may be headed for a recount. If Riley manages to upset Starr, it would give Senate Democrats an 18-vote majority, enough to pass funding measures without any Republican votes.

Democrats retained control of the Oregon House by a margin of 35-25, one vote shy of the three-fifths majority to move tax measures without help from across the political aisle.

All of Oregon's incumbent congressional delegation up for re-election, including Senator Jeff Merkley, won handily.

Senate President Peter Courtney, whom some thought might face a tough re-election battle, prevailed with more than 53 percent of the vote. On the flip side, Rep. Jim Weidner, a Republican representing McMinnville and one of the most Republican-leaning districts in the state, won by a surprisingly narrow 51 to 46 percent measure over Democratic challenger Ken Moore. Moore campaign vigorously, while Weidner didn't.

A lot of attention and money focused on ballot measures and none more than Measure 92, which would have required GMO labeling. This is the second time Oregonians have rejected a similar measure, but this time the margin was razor thin at 50.6 to 49.4 percent, or something like 17,000 votes out of more than 1.3 million cast. (Interestingly, a GMO moratorium in Maui, which also attracted deep-pocket opponents, narrowly passed.)

The biggest loser was Measure 90, the top-two primary, which went down to defeat 68 to 32 percent. Measure 88, a referendum to overturn legislation to allow driver cards for non-residents, was defeated almost as soundly at 67 to 33 percent.

The biggest winner was Measure 89, the equal rights amendment, which passed by 63 to 37 percent.

The measure that gained the widest national headlines was approval of Measure 91 to legalize the use, sale and production of marijuana. Alaska also approved a similar measure and the District of Columbia passed a somewhat more restricted legalization. They join Washington and Colorado, which already have passed and implemented marijuana legalization schemes. Oregon's regulatory challenge will fall to the Oregon Liquor Control Commission, which announced it will move forward a policy that reflects the "Oregon way."