Planning for the February Legislative Session

Major reform proposals await legislative attention in the February 2012 session. Moving ahead may seem like a better option than cutting programs deeply.While Oregon legislators are planning for their Christmas and New Year holiday celebrations, they also have February on their calendars.

That's when they will return to Salem for the first official "annual legislative session," which voters enabled when they changed the Oregon Constitution at the November 2010 general election.

Legislators experimented with annual sessions in 2008 and 2010 in an approach that some observers thought violated the Constitution.

Lawmakers arrive in Salem February 1 and probably will finish the session by March 5 or thereabouts — if, for other reason, than that the 2012 election filing day deadline is March 6, an event usually held in the House chamber.

At the moment, several major issues are on the February legislative agenda:

  • The next steps in Governor Kitzhaber's plan for education reform, which revolves around creating an Education Investment Board to oversee all of education from kindergarten through graduate school. The governor also envisions hiring an "education czar." The proposals remain controversial, especially in light of the recent dust-up between the State Board of Higher Education (which would go away with creation of the Education Investment Board) and supporters of now-fired University of Oregon President Richard Lariviere. In addition, many observers wonder how the governor will pull off the huge organizational changes, which include diminishing the role of the elected superintendent of public instruction, at a time when state money is drying up.
  • The next steps in the governor's plans to create an early learning council and have it be in charge of all programs for children ages 0 to 5. Again, these reforms are controversial, especially in a time of tight money. Tight money is exactly what is imbuing early learning council advocates with zeal to make reforms rather than just cut programs. The governor said in his inaugural address almost a year ago that he would appoint an early learning council executive director, but so far no appointment has been made.
  • The next steps in the governor's health care reforms, which include creation of new "Coordinated Care Organizations (CCOs)," entities designed to bear the responsibility in local areas for organizing health and mental health care for many Oregonians. CCOs cannot be formed until after the legislature, in February, creates the marching orders, which will include specifications for how the new CCOs bear the risk for the services they provide, a risk previously borne by the state.
  • Much rides on the legislature's decision and, again, money is a major factor. he legislatively approved budget for 2011-13 already includes an expectation that the new CCOs will save $240 million in 2012 by being more efficient and effective. Many observers believe the so-called "savings target" will end up being a cut in state money for Medicaid health insurance, a cut that also will save the federal government about $400 million in matching funds. In response, the governor and his staff have said  they may ask the Obama Administration for a portion of the federal money back to fund Oregon's trailblazing reforms.
  • The elephant at the Capitol in February will be rebalancing the state budget. If legislators were not meeting in February, they would probably be called into "special session" to rebalance the state budget, which continues to suffer from declining projected state tax revenue in a stubborn recession. To prepare, legislators have received from the governor potential cut lists from agencies totaling 10.5 per cent of their general funds in 3.5 per cent increments. Actually how much will be cut remains uncertain and won't be resolved until the next revenue forecast arrives in late January.

New tax revenues are not on the horizon. In the Oregon House, which is split 30-30 between Republicans and Democrats, there is no way to accumulate the number of votes -needed to pass new taxes, just as there is no way to find the necessary 18 votes in the Senate.

So, how will the legislature deal with all of these issues in a short session? No one knows for sure.

One county commissioner the other day suggested that there could be three scenarios. First, legislators would pass "framework" bills, which essentially would be skeleton outlines of the next steps on education, early learning and health care reform, thus leaving the details to the Kitzhaber Administration. Second, legislators could decide that the governor was biting off more than anyone could chew, so they would pass only smaller, incremental reforms and leave the major issues until the longer 2013 legislative session. Or, third, legislators could punt on all of the major issues, indicating that it would make more sense in a longer session to deal with such huge changes in programs that affect all Oregonians.

Here's a bet that legislators will take the first route — keep moving down the road of reform and pass framework bills. The reason? There is no money to keep financing state government as it is, so reform sounds like a better option that just cutting.

Put another way, the governor's strongest ally in the reforms he is proposing is the extremity of the state's financial circumstances. Less money means he may get his way most of the time.

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[The author, CFM partner Dave Fiskum, has lobbied the Oregon Legislature for more than 30 years while he has watched five Oregon governors deal with major policy issues.]