In a rare pre-May forecast press conference, Governor Kitzhaber challenged lawmakers to agree to a grand bargain on PERS and new tax revenue or face a shriveled budget for education. He also called on lawmakers to take a bipartisan look at tax reform.
In his third term, Kitzhaber has become known for his keen negotiations skills that have helped to ensure bipartisan passage of his major policy initiatives during the last two sessions.
His methods have included bipartisan legislative leadership meetings at Mahonia Hall, weekly meetings with presiding officers, one-on-one diplomacy with key members, attending caucuses of both parties and, when necessary, public pressure to break logjams in negotiations. He clearly resorted to the latter yesterday.
Signaling that the legislature is at a crossroads and faces a “partisan impasse,” the governor used his public “bully pulpit” to call on legislative leadership to take on two major challenges:
- A Grand Budget Bargain — including an additional $400+ million in PERS savings and $200 million in tax increases: and
- Tax Restructuring — establish a bipartisan workgroup to examine reductions to small business taxes and a more progressive personal income tax system this session.
Mid-May press headlines have traditionally been reserved for the revenue forecast that will be released May 16 at a joint meeting of House and Senate Revenue committees. The May revenue forecast provides the last pieces of information legislative leaders need to fill remaining budget holes, make last-minute bargains and rush towards adjournment.
In a sign that there's tension growing at the leadership level, the governor broke with tradition in an effort to spark talks among legislative leaders ahead of the forecast.
Legislative leaders have been given until close of business today to respond to the governor's challenge on the grand budget bargain. If the answer is no, Kitzhaber said he will call on legislators to complete the work on the budget with the resources they have in hand.
In another unusual move, the governor indicated that additional revenues would be expected in the May revenue forecast. The forecast, released today, indicated state lawmakers have an additional $270 million to use in bolstering school and human service funding.
The bipartisan workgroup on small business taxes is a separate conversation. The conversation has grown as a result of the support of two Republican senators — Larry George and Brian Boquist. Committing staff and political support to the effort, the governor recommends that the workgroup provide a product to the legislative leadership no later than June 1 for consideration in this session.
Senate Republicans have gained significant political importance this session given the close margin in the Senate. A recent injury to Senator Betsy Johnson, D-Scappoose, which has prevented her from attending floor sessions, has given Senate Republicans tremendous leverage to stop any piece of legislation because majority Democrats are one vote short.
Kitzhaber’s negotiating skills have produced big wins for his health care, education and early learning agenda. Time, and not much of it, will tell whether today’s efforts will produce similar results for another politically charged and high profile agenda item — PERS and revenue reform.