Huge Issues Loom in 2013 Session

Among the looming issues this interim is tax reform, which is sure to revive talk of a state or local sales taxes, a topic with a long history in Oregon.The short 2012 session just ended and there are nine months until the 2013 legislature convenes, but it is still timely to look ahead at the issues that need resolution or are just ripening for action.

At the top of the list is how Governor Kitzhaber's health care transformation strategy will work and whether newly forming coordinated care organizations can squeeze out cost savings in serving Oregon's Medicaid population. The health insurance exchange will get up and running, just as the federal health care reform measure lands in the U.S. Supreme Court, which could toss some or all of the controversial reform legislation.

Despite a slow economic recovery, many parts of Oregon still feel the after-effects of recession and could benefit from state efforts to boost employment. Strong differences exist between Republicans and Democrats on how to stimulate job growth, especially in rural Oregon.

As a result of education reform measures pushed by Kitzhaber, K-12 school districts are signing achievement compacts to promote improved student learning. A question remains whether this reform will under-perform or have unintended consequences as have previous reforms such as No Child Left Behind and Race to the Top.

Lawmakers in February approved a measure that deals with home foreclosures. However, consumer advocates felt it didn't go far enough, while bank and title company officials said it might not work as expected.

Kitzhaber, who will be entering the last two years of his third term, has vowed to give tax reform another shot. This has proven to be as elusive as the pot of gold under the rainbow. While a majority of Oregonians feel the state's current tax system isn't sustainable, there is no clear consensus on how to refine or replace it. A state sales tax is certain to make another stage appearance, with a few clapping and others throwing big red tomatoes. 

Local governments are pressing for expanded access to property tax revenues. They are looking for authority to exceed property tax rate limitations for voter-approved levies. The temporary state hospital tax expires and hospital interests may be less willing to go along with an extension after proceeds were diverted from their original purpose.

Energy policy is yet another big interim initiative of the governor. A task force, which met mostly in the shadows, has unveiled a sprawling set of ideas, but not necessarily a clear direction. Dreams of a growing base of wind and solar power generation have faded as federal and state tax incentives dried up.

Legislation approved in the February session will lead to creation of accountability hubs, which are intended to oversee and coordinate efforts to support families and children under stress. A goal is better and more comprehensive services, but that goal could be thwarted by dwindling resources.

Oregon's prisons remain a concern. Reduced funding will lead to early release of inmates, which runs counter to mandatory minimum sentencing standards imposed on many crimes imposed by voter-approved initiatives.

There is still a lot of debate over a new I-5 bridge crossing. Critics are grumbling that economic projections don't pencil out and that the original design may be too low to allow river traffic to pass underneath. The big elephant in the room is whether tolling will be used to help finance the bridge and, if so, when it will begin.

It seems unlikely the economy will pick up enough in the next few months to balloon state tax revenues, which means state budget-writers will face more prospective cuts or program elimination.

These serious and contentious issues will percolate in the 2012 political campaigns as Republicans and Democrats vie for control in the Oregon House and Senate. The tenor of those election battles may influence whether there is a reprise next year of the civil, respectful tone seen in the 2011 session.