CFM State Affairs

Kicker Refunds Balloon, State General Fund Shrinks

The latest Oregon economic and revenue forecast predicts a ballooning personal income tax kicker and a shrinking state General Fund. The forecast says good economic times remain, but cracks in the economy are showing.

The latest Oregon economic and revenue forecast predicts a ballooning personal income tax kicker and a shrinking state General Fund. The forecast says good economic times remain, but cracks in the economy are showing.

The headlines for the latest economic and revenue forecast zeroed in on larger-than-anticipated income tax kicker refunds. Overlooked was a prediction that Oregon’s General Fund going forward will be “significantly smaller”.

The forecast, which is produced quarterly by state economists, is generally positive. “Oregon continues to hit the sweet spot for now. Growth is strong enough to keep up with an increasing population and deliver economic and income gains to Oregonians. The share of working-age residents with a job is higher than the average state. Both wages and overall household incomes continue to rise at a faster rate.”

That rosy outlook was tempered, however. “The state is not immune from national and international developments. While topline manufacturing indicators in the state look good, cracks may be forming due to the [US-China] trade war.” 

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When the forecast was released this week, most eyeballs focused on the income tax kicker, which is expected to balloon from an estimate in May of $1.4 billion to $1.57 billion, making it one of the largest refunds in state history. 

“Kickers of this size occur about once every decade, typically around the peak of the business cycle,” according to the forecast executive summary. “As was the case with the large kicker generated during the mid-1980s, changes in federal tax policy played a large role in generating above-trend state collections last biennium.”

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Oregonians with higher incomes will get the largest refunds, ranging in thousands of dollars. The average kicker refund, based on an adjusted gross income of $64,300, is projected at $739. Refunds will apply when filing 2019 personal income tax returns.

Kicker rebates are triggered when actual state revenues exceed forecasted revenues in the state’s biennial budget by 2 percent or more. Individual Oregon taxpayers receive refunds. Corporate kicker refunds are diverted to shore up future school funding shortfalls.

The overlooked portion of the forecast traced the shrunken General Fund to the “enactment of a Corporate Activity Tax (House Bill 3427),” which includes “personal tax rate cuts and is expected to reduce business tax liability.” Personal and corporate income tax revenue account for the majority of Oregon’s General Fund.

“While the Corporate Activity Tax will clearly be a net positive for the state budget as a whole, it will reduce General Fund resources since the new collections will not be deposited there,” state economists said.

“Heading into the new biennium, uncertainty about the performance of the nationwide economy has become paramount,” state economists warned. “Growth will certainly slow to a sustainable rate in the coming years, but the path taken to get there is unknown.” 

“Fortunately, Oregon is better positioned than ever before to weather a revenue downturn. Automatic deposits into the Rainy Day Fund and Education Stability Fund have added up over the decade-long economic expansion,” they added. “When the expected ending balance for the current biennium is included, Oregon has more than $2.5 billion in reserves set aside, amounting to more than 12 percent of the two-year budget.”

The quarterly forecasts contain a lot of interesting data about Oregon’s economy. Here are a few nuggets:

  • “Oregon continues to see healthy rates of growth when it comes to employment, income and GDP. However, the state is no longer significantly outpacing the nation like it was a couple years ago. “

  • “Personal income growth remains stronger, meaning Oregon income per capita, per worker and per household is rising faster than nationwide.”

  • “Businesses face a combination of issues. First, sales will continue to grow. Firms will need to invest and hire to chase those increasing sales, market share and profits. Second, the pace of those sales increases will be slower. Migration and job growth are tapering in a mature expansion, meaning there will be more potential customers, but the increases next year will be smaller than this year. Third, the increased uncertainty regarding the economic outlook may have firms wary of investing and hiring as they may be less confident they can recoup the fixed costs of expanding if the underlying sales do not materialize. Fourth, businesses continue to face a relatively tight labor market in which attracting and retaining workers remains a key issue. To fill positions, firms must compete on price and also continue to cast a wider net and to dig deeper into their resume stacks to find candidates they may have previously passed over in a different labor market.”

  • “For households, a slowing economic outlook still brings good news, although a recession clearly does not. For Oregonians not working today, there has not been a labor market this strong since the late 1990s. Job openings remain plentiful and firms are more willing to overlook incomplete skill sets or gaps on resumes in order to hire and expand. Now, a strong economy cannot overcome structural mismatches in terms of skills or geography, but it does ease cyclical and frictional reasons for unemployment. For those already working, a tighter labor market raises wage growth. The outlook calls for 4 percent average wage growth per year, similar to what Oregon has experienced in recent years.

  • “Weekly hours worked in manufacturing are dropping quickly so far in 2019, with Oregon’s decline more than twice the nation’s. This gap between ongoing employment gains and fewer hours worked per employee is not sustainable.”

  • “While Oregon exports are down over the past year or two, they are holding up relatively well when compared to other states. This is in large part due to a few, isolated increases masking weakness elsewhere in the data. In particular, Oregon exports to China are surging due to increases in computer and electronic products and chemicals. So far these have not been impacted by the tariffs.

  • “To the extent that commodity exports are down, then US exporters can and will need to find other international markets to sell their goods. Additionally, given the recent Chinese retaliation of not buying any US agricultural products, these adjustments will clearly need to be accelerating and ongoing to avoid further declines in export activity.”


Brown’s Executive Action Threat on Carbon Reduction Is Real

Governor Brown began exploring executive actions to reduce Oregon carbon emissions long before the 2019 legislature considered and ultimately failed to pass cap-and-trade legislation, according to enterprise reporting by the  Salem Reporter .

Governor Brown began exploring executive actions to reduce Oregon carbon emissions long before the 2019 legislature considered and ultimately failed to pass cap-and-trade legislation, according to enterprise reporting by the Salem Reporter.

The Department of Environmental Quality (DEQ) has been working on executive actions to limit greenhouse gas emissions in Oregon for more than a year, according to an enterprise story published today by the Salem Reporter.

Exploration of options was halted when it appeared the 2019 Oregon legislature was on track to adopt a cap-and-invest bill addressing industrial and transportation emissions. When House Bill 2020 faltered at the end of the legislative session, Governor Brown signaled she would look at executive actions and the DEQ vetting process resumed.

Aubrey Wieber of the Salem Reporter based her story on interviews, including with DEQ Director Richard Whitman, and an examination of public records and emails.

One of the more intriguing details in her story was a communication from Whitman to Brown five days before the legislature adjourned that outlined possible executive actions if the cap-and-invest bill failed to pass. While the bill’s demise has been publicly attributed to a Senate Republican walkout, Capitol insiders are aware Senate Democrats lacked the votes in their own caucus to pass HB 2020.

Whitman told Wieber, “We are on a pretty steady pace working on these issues at this point,” adding the agency is in frequent and often daily contact with Brown and her staff. 

The list of options included on the June 25 internal DEQ document sent to Brown describes a “gradually declining cap on industrial emissions and fossil fuel importers, strengthening Oregon’s low-carbon fuel standard, increasing access to public transit and promoting biking and walking,” Wieber reports.

“DEQ also outlined ways to strengthen regulations on landfills to lower methane emissions, more strictly regulate dairies, expand vehicle inspection programs so that medium-duty trucks are inspected twice per year and require newly built buildings to include electric vehicle charging stations.” 

In earlier communications between DEQ and Brown, there was extensive discussion of suing the federal Environmental Protection Agency “to ensure Oregon maintains the authority to use executive powers to regulate polluters.”

Since her post-session comment about executive action to curb carbon emissions, Brown has remained silent on whether or when she will undertake executive action. A spokesperson said Brown prefers legislative action, but added, “She has instructed her team and agencies to explore all options to achieve Oregon’s emissions reduction goals.” 

Whitman told Wieber the “main focus of the agency’s proposal is on capping industrial emissions,” adding, “While executive action can be extremely powerful, it lacks the nuance afforded by the legislative process. Going the legislative route allows the state to be less restrictive of industry, giving it the best ‘bang for its buck.’”

One major drawback to executive action is DEQ’s inability without legislative approval to impose fees to support a carbon reduction program. Whitman said that’s why the list of options has been narrowed to the “most workable program.”

Any executive action by Brown is likely to spark opposition by industry and legislative Republicans. Wieber quotes Rep. David Brock Smith, D-Port Orford, as hinting DEQ’s budget could become a target, as early as the 2020 legislative session. Brock Smith was vice chair of the House committee that produced HB 2020 and also sits on the committee that oversees DEQ’s budget.

[The Salem Reporter is a web-based news organization that focuses on Salem-area news as well investigative stories about state and national government.]

 

Oregon Continues Bipartisan Tradition of Making Voting Easier

Under the shadow of high-profile legislation, Oregon continued its bipartisan tradition of expanding access to voting, including ballots with pre-paid postage.

Under the shadow of high-profile legislation, Oregon continued its bipartisan tradition of expanding access to voting, including ballots with pre-paid postage.

In the shadow of higher-profile legislation, the 2019 Oregon legislature continued the state’s bipartisan tradition of making it easier to vote.

While other states wrestle with election security and voter suppression, Oregon’s vote-by-mail is relatively immune from cyber-attacks and has routinely promoted higher voter turnout. 

Oregon lawmakers took vote-by-mail one step further by approving Senate Bill 861 that provides for pre-paid postage on ballots. The legislation was supported by the late Secretary of State Dennis Richardson, his successor Bev Clarno, Governor Brown and The Bus Project.

Pre-paid postage is viewed as another way to encourage voting, even though voters now can drop off ballots at local election offices. Some lawmakers questioned the cost of pre-paid ballots, which is estimated to run somewhere between $2-$3 million. Washington and California also have approved pre-paid ballots. 

Clarno carried forward Senate Bill 224, which was introduced at Richardson’s request, to address election issues by preventing voters from being purged from registration rolls because of inactivity and allowing military and overseas voters to request ballots electronically.

House Bill 2015 modified Oregon’s Motor Voter Act, which tied obtaining a driver’s license with automatic voter registration. Under state and federal law, proof of citizenship is required to register to vote. HB 2015 allows individuals without proof of citizenship to obtain a valid driver’s license without automatic voter registration.

The legislature did address one aspect of digital democracy by approving Senate Bill 761 that imposes strict requirements on the use of electronic signature sheets, known as e-sheets, for gathering signatures for initiatives or referenda. Under the measure, e-sheets must contain the full text of an initiative or referendum and require signatures in multiple places.

In her post-session newsletter, Clarno cited her objection to SB 761, which she said would make e-sheets harder to employ to the disadvantage of rural Oregon voters where hand collection of signatures can be prohibitively expensive. Clarno noted the validity rate of measures using e-sheets is higher than paper petitions.

Clarno, a Republican, is a former Central Oregon lawmaker and House Speaker. She ran unsuccessfully for Oregon Treasurer in 1996. She returned to elective office as a state senator in 2000, then resigned in 2003 to take a position with the George W. Bush administration in the US Department of Health and Human Services.

Brown appointed Clarno as secretary of state after Richardson’s death earlier this year. At the time, Brown indicated she wanted to appoint a successor who wouldn’t run for the office in 2020.

So far, there are no declared candidates from either party for secretary of state, though the names that often pops up is current House Speaker Tina Kotek, a Portland Democrat, who came to the legislature in 2007 and has been speaker since the 2013 legislative session, and Representative Dan Rayfield, the Corvallis Democrat who is also Co-Chair of the powerful Ways and Means Committee.

Richardson was a Republican from Southern Oregon who served in the House and ran unsuccessfully for governor in 2014 against then incumbent John Kitzhaber. Richardson’s election in 2016 as secretary marked the first time Oregon elected a Republican to the post since Norma Paulus in 1980. He was the first Republican to win statewide office since 2002 when Gordon Smith was elected to the US Senate. Richardson died at age 69 from a rare form of brain cancer.

 

Senate Republicans Might Reprise Their Walkout Strategy in 2020

The 2019 Oregon legislative session was jolted by two Senate Republic walkouts that wound up deep-sixing three separate bills, including cap-and-trade legislation. Could another walkout occur in the 35-day 2020 legislative session? Maybe. (Photo Credit: Justin Katigbak/Willamette Week)

The 2019 Oregon legislative session was jolted by two Senate Republic walkouts that wound up deep-sixing three separate bills, including cap-and-trade legislation. Could another walkout occur in the 35-day 2020 legislative session? Maybe. (Photo Credit: Justin Katigbak/Willamette Week)

Oregonians, politicians and the news media are still buzzing about the nine-day Senate GOP walkout just before adjournment of the 2019 legislative session. The question now is whether another walkout could happen in the short 2020 legislative session that starts next February if Democrats try again to pass a cap-and-trade bill.

The 12-member Senate GOP caucus staged two walkouts in the 2019 session. The first one, in protest of the $1 billion Student Success Act, didn’t stop the bill they protested, but did sink two other major pieces of legislation dealing with gun regulations and vaccination exemptions.

The second, longer walkout was aimed at sidetracking the cap-and-trade bill. It succeeded. Senate Republicans returned to the Capitol with just enough time to pass budget bills and a few Democratic priority bills before the June 30 midnight deadline. No special session was needed.

Republican leaders rationalized their walkouts as their only way to counter the Democratic supermajority that controlled the Senate 18-12. The walkouts denied Democrats the 20-member quorum required to conduct a floor session, delaying as many as 100 Senate floor votes.

The walkouts drew national media attention, in part because of comments by Senator Brian Boquist that were construed as physical threats. While legislative Democrats and Governor Brown were fuming over the walkout, there appeared to be a fervent wave of support from rural Oregon.

Immediately after sine die of the 2019 legislative session, Brown vowed not to give up on cap-and-trade legislation, even if she had to resort to executive action. Her post-session speech may have increased the odds of a Senate Republican walkout next year. 

Oregon has seen legislative walkouts before. When she was the Senate Democratic Leader in 2001, Brown expressed support for a walkout by House Democrats to protest the way majority Republicans were addressing legislative redistricting. But previous walkouts were more like expressions of discontent than strategic parliamentary maneuvers. Senate Republicans have suddenly discovered they have power they didn’t realize they possessed. Democrats made the same discovery, but belatedly.

What happens next on cap-and-trade, as well as other Democratic priorities, may determine the likelihood of a walkout in the 2020 session. The potential of a walkout in a constitutionally limited 35-day session is its own political deterrent. During a short session, timelines are compressed and a similar nine-day walkout would cripple the Capitol and the ability to accomplish any major priority.

Political commentators tend to focus on the power of majorities in legislatures and in Congress. They overlook the power of minorities, especially ones led by people who can count heads, know the rules and keep their ranks in line. The congressional Freedom Caucus repeatedly demonstrated its power by extracting concessions from the previous House GOP leadership or forcing it to find the votes it needed in the Democratic caucus. Senate Republicans may be looking to do the same thing in the Oregon legislature. 

Without fear of re-election retribution and with the support of major campaign financial backers, Senate Republicans have few to zero roadblocks to employing their walkout strategy again. 

Democrats may have exhausted their ability to agree to more amendments that further water down House Bill 2020 without risking greater opposition from environmental advocates who disagree “something is better than nothing.” They could agree to send a version of cap-and-trade legislation to voters, which might take the issue off the table in the 2020 session.

In a piece from July 4, Oregon Capital Insider author Dick Hughes argued that "reflective listening" is needed by the Democratic supermajority if they hope to avoid a second Senate Republican walkout and rally of truckers, farmers and loggers in efforts to pass a new version of HB 2020 in the short session.

The reason the 2017 transportation package was successful, Hughes said, was that legislative leaders established a bipartisan process early on and developed ideas from both sides of the aisle. The measure received bipartisan votes and wasn’t referred to voters. 

Is there such a path forward for major carbon policy? Rep. Cliff Bentz, R-Ontario, has dropped hints there is if Republicans are given a chance to influence the shape of the legislation. There isn’t a lot of productive time between now and the 2020 short session for a bipartisan reset. There may not even be a bipartisan appetite to try, which could make another walkout a distinct parliamentary possibility.

 

Walkouts, Threats and Negotiations Punctuate Final Legislative Days

Log truck drivers swarmed into Salem to protest legislative passage of a cap and trade proposal, which they say will drive them out of business without perceptibly reduce carbon emissions. The protest stoked a threat by Senate Republicans to stage a second walkout during the 2019 legislative session to delay a vote on the controversial environmental proposal that already has passed the House. [Photo Credit: Claire Withycombe/Capital Capital Bureau]

Log truck drivers swarmed into Salem to protest legislative passage of a cap and trade proposal, which they say will drive them out of business without perceptibly reduce carbon emissions. The protest stoked a threat by Senate Republicans to stage a second walkout during the 2019 legislative session to delay a vote on the controversial environmental proposal that already has passed the House. [Photo Credit: Claire Withycombe/Capital Capital Bureau]

Legislative sessions are easy to start, but a pain to end. Witness what’s happening in Salem as Senate Republicans orchestrated their second walkout and Democratic Governor Brown followed through on her threat to call state police to return lawmakers to the Capitol. She also promised to call a post-July 4 special session if necessary.

The original Senate Republican walkout, which lasted several days, was intended to delay a Senate vote on the $2 billion Student Success Act and its commercial activities tax. The latest Senate GOP threat is aimed at delaying or derailing the cap and trade proposal (House Bill 2020), which they believe will harm Oregon industries such as logging without any perceptible impact on combating climate change. 

The constitutional provision allowing annual sessions requires the 2019 Oregon legislature to adjourn by the end of June 30. A Republican walkout this week may slow down Senate floor votes by denying a quorum. Democrats hold an 18-12 majority, but a quorum requires 20 senators.

The earlier walkout was settled by a negotiation engineered by Brown, who sacrificed gun registration and pro-vaccination legislation to convince Senate Republicans to return and allow the Student Success Act to pass on a partisan basis. This time, Brown has signaled a different approach – calling out the Oregon State Police or dragging lawmakers back into session after July 4.

The prospect of being “arrested” and returned to the state Capitol prompted a sharp outburst by GOP Senator Brian Boquist, who warned on video the governor should send bachelors and well-armed officers to apprehend him. Boquist called himself a “political prisoner.”

Senate GOP Leader Herman Baertschiger served up a similar warning, with a different twist. He vowed to go to federal court, claiming being dragged back to the Capitol would violate his First Amendment free speech rights.

To say the least, it was not a typical day in a legislative session.

Politics, of course, is a lot like kabuki theater. Drama is what you see, but it may mask what’s really going on. Reports were rampant that Senate leaders from both parties were talking about possible amendments to the cap and trade bill, which has already been amended nearly 100 times and passed in its current form in the House by a 36-24 margin.

A walkout by Senate Republicans could jeopardize the policy gains from the first walkout. Advocates of gun registration and pro-vaccination legislation already pounded on the opportunity to revive their bills.

The final days of any legislative session tend to be chaotic, despite the best intentions of well-meaning legislative leaders. All the big issues bottled up during the session or the ones facing 11th-hour negotiating deadlines are suddenly alive. These tend to be issues that can’t just be swept under the rug, so some resolution is necessary.

To outside eyes, the spectacle can seem bizarre and brazen. It is, but it also is how the process grinds to a conclusion, which rarely makes everyone happy, but is enough to allow enough people to vote to go home.

We haven’t seen the final shape of big issues such as cap and trade and a tobacco tax, let alone the infamous Christmas Tree spending bill will enough sugar plums to satisfy exhausted legislators long enough to vote to adjourn. The next few days will be noteworthy for political science nerds and nonsense to most citizens.

The best consolation you can offer is that it will end, eventually. And, the legislature will be back in town in six months.

 

Time Again for Political Football with the Oregon Kicker

A historically large income tax kicker has tempted Oregon officials to offer up ideas of how to divert and spend some of it on transportation, rural housing, broadband expansion and PERS.

A historically large income tax kicker has tempted Oregon officials to offer up ideas of how to divert and spend some of it on transportation, rural housing, broadband expansion and PERS.

The Oregon income tax kicker has been a political football since its inception in 1980. It has gone from checks in the mail to a tax credit and a cunning way to control the size of government to a potential cash register for an expanding government liability.

Governor Kate Brown initiated the latest play for kicker funds last week with a proposal to keep $500 million of a projected $1.4 billion in personal income tax refunds that Oregonians will receive when they file their tax returns next year. Brown says half of the amount would pay down the PERS unfunded liability, $200 million would pay for rural housing and $29 million would go to expand rural broadband.

Brown’s proposal didn’t contain a lot of specifics, which reflects that it is more of a sales pitch right now than a well-tuned legislative initiative. According to OPB political reporter Dick VanderHart, Brown sounded out her plan with Senate and House Republicans, some of whom would be needed to reach the two-thirds requirement in the Oregon Constitution to divert kicker refunds. Their initial response wasn’t too encouraging – or surprising.

House Speaker Tina Kotek earlier suggested a portion of kicker refund revenue should be retained and pay for various transportation projects. Brown was cool to that idea, indicating any retained money from the kicker should go to hold down PERS costs to public employers.

Brown admitted her proposal is a tough sell. However, she drafted it in a way that most Oregon taxpayers wouldn’t feel the pinch. Under her proposal, kicker refunds would be capped at $1,000 per tax filer, which means Oregonians who declare $55,000 in taxable income wouldn’t see any reduction in their kicker refund. The average kicker refund is estimated at around $338.

The income tax kicker refund is unique to Oregon and was sold originally as a way to hold down government spending in the good times when higher-than-expected revenue poured into state coffers. Here is an explanation of when a kicker refund is triggered and how it is calculated.  https://youtu.be/c439JJmsipM

The income tax kicker refund is unique to Oregon and was sold originally as a way to hold down government spending in the good times when higher-than-expected revenue poured into state coffers. Here is an explanation of when a kicker refund is triggered and how it is calculated. https://youtu.be/c439JJmsipM

Some 331,000 Oregon taxpayers would see their refunds reduced. The biggest rollers in the state may receive kicker refunds as high as $14,000.

The $1.4 billion kicker is a tempting target to spend rather than return. However, rounding up even Democratic votes might be challenging after tough votes to approve a $1 billion per year commercial activities tax to fund the Student Success Act and a PERS measure that included a requirement for public employees to contribute to their own retirement accounts. Tough votes loom on a much-amended cap-and-trade proposal and a potential funding measure to sustain the Oregon Health Plan. Add to that an earlier session vote to divert $108 million of kicker rebate funds to bolster the state General Fund. 

The income tax kicker is unique to Oregon. It was created on a belief that you could capitalize politically on an economist inclination, which some call prudent, to underestimate personal and corporate income tax revenue. The way the kicker law works is that if tax revenue exceeds 2 percent of projections, all the revenue above the projection must be returned to taxpayers based on what they paid in taxes. 

Former Oregon Senate President Gordon Smith recognized the political potential of a kicker based on an economic formula, with no real basis in economics, and sealed it in the Oregon Constitution. To cement the idea into Oregonian lore, Smith insisted kicker refunds be sent to taxpayers in checks they could fondle, sign and deposit.

The kicker underwent some rethinking as school funding suffered, college tuition soared and the public pocketbook went wanting during economic downturns. The corporate income tax kicker was the first political casualty, with its revenue siphoned off to a rainy day fund, which happens to total currently around $3.5 billion.

The personal income tax kicker commands more voter loyalty, so political leaders over the last four decades have been chary to challenge refunds when times are good enough to generate them. That seems to be changing as the collective public memory of the kicker fades.

A confusing explanation of what produced the historically large projected kicker refund doesn’t make it seem all that sacred. A chunk of over-realized revenue results from a business tax break that Brown and the legislature ended. The GOP-backed federal tax cut wasn’t kind to many Oregon taxpayers, which contributed to reduced taxpayer refunds on state income tax returns. A strong economy played a role, too.

 

PERS Bill Moves on Fast Track to Senate and House Floors

Tackling the still-growing Public Employees Retirement System unfunded liability is one of the thorniest political issues facing Oregon lawmakers. What appears to be their best shot this session is headed to the Senate and House floors. The bill is more patchwork than policy reform.

Tackling the still-growing Public Employees Retirement System unfunded liability is one of the thorniest political issues facing Oregon lawmakers. What appears to be their best shot this session is headed to the Senate and House floors. The bill is more patchwork than policy reform.

A PERS bill is moving in the Oregon legislature that is more patchwork than policy reform, but it may constitute all that can pass in the 2019 session. The fast-tracked legislation could reach the House and Senate floors as early as next week.

Senate Bill 1049 is unofficially, but politically tied to the Student Success Act, which generates an additional $1 billion per year to boost education funding and imposes a commercial activities tax on larger corporations. The critical 18th vote provided by Senator Betsy Johnson, D-Scappoose, was conditioned on legislative action this session on what she termed “substantive” reform of the Public Employees Retirement System. Johnson voted for SB 1049 in the Joint Ways and Means Committee.

The core provision in SB 1049 involves extending the minimum payment schedule for the $27 billion unfunded liability for another eight to 10 years, which accounts for the largest savings achieved by the legislation. Detractors called that another example of kicking the can down the road as opposed to actual reform.

“The bill does not meaningfully impact the system’s deficit or move Oregon any closer to solving its underlying pension problem,” writes The Oregonian’s Ted Sickinger, who closely tracks PERS issues.

SB 1049 includes a cost-sharing provision that would redirect a portion of employee pension contributions made to a supplemental savings plan that resembles a 401(k) plan. An amended version of the plan that was voted on left out an earlier provision that would have reduced the interest used to calculate the pension system’s money-match. The bill reverses a PERS decision and would give employees discretion on how to allocate investments in their own accounts.

Lawmakers added a provision to tap future net revenues from sports betting for an employer incentive fund to make lump sum payments to pay down liability. Lawmakers also tossed in a one-time $100 million contribution.

There was no mention of diverting personal income tax kicker rebates to reduce the PERS deficit.

Amendments to create a new tier of public employees who would receive a 401(k) plan in lieu of pension benefits didn’t pass in committee. 

Like most bills dealing with PERS, no one was really happy. Public employee union officials indicated they would explore a court challenge to cost-sharing provisions. Business advocates and some public employers didn’t think the measure went far enough. Legislators fretted over having to vote on the bill, fearing political consequences down the road.

“Not a single lawmaker questioned or expressed any apprehension about further underfunding the pension system and extending the deficit for another decade,” Sickinger reported. “That’s the bill’s main thrust – a strategy that could lead to further destabilization of the pension fund and land the issue back in lawmakers’ laps if investment returns don’t live up to expectations.”

In an even harsher judgment, Sickinger wrote, “Several committee members repeated the myth that greedy Wall Street bankers and the 2008 recession are to blame for PERS problems, rather than misguided and financially self-interested decisions by earlier legislatures and PERS boards that actually created the system’s structural deficit.” 

Governor Brown’s task force failed to coalesce around major proposals to reduce the PERS unfunded liability. Trial balloons on ideas such as raiding SAIF reserve funds didn’t gain any political traction. 

The PERS unfunded liability has continued to grow despite a strong economy and in the face of stock market volatility.

 

Political Poker Game Underway on Taxes, PERS and Cap and Trade

Willamette Week’s Nigel Jaquiss reports there is a high-stakes political poker game underway in Salem and Senator Betsy Johnson, who represents the 18th vote for a Senate supermajority, holds the most important cards. [Photo Credit: Willamette Week]

Willamette Week’s Nigel Jaquiss reports there is a high-stakes political poker game underway in Salem and Senator Betsy Johnson, who represents the 18th vote for a Senate supermajority, holds the most important cards. [Photo Credit: Willamette Week]

A billion-dollar boost for education, a new tax on large businesses and a cap-and-trade scheme may all boil down to how one Oregon senator votes, according to Willamette Week’s Nigel Jaquiss.

“Senator Betsy Johnson (D-Scappoose) holds almost all the cards” in a big-stakes political poker game that could determine the fate of the three highest-profile legislative measures in the 2019 Oregon legislative session, Jaquiss writes this week.

A keen-eyed, long-time legislative observer, Jaquiss says Johnson’s position as the critical 18th Democratic vote in the Senate gives her a lot of leverage. A three-fifths supermajority is required to pass tax-raising measures. Johnson also is one of two Senate co-chairs of the Joint Ways and Means Committee, which okays state spending authority. 

Senator Betsy Johnson, D-Scappoose, may be the key vote that determines the 2019 legislative future for the Student Success Act, PERS funding reforms and cap and trade.

Senator Betsy Johnson, D-Scappoose, may be the key vote that determines the 2019 legislative future for the Student Success Act, PERS funding reforms and cap and trade.

In Jaquiss’ telling, Johnson, whom he describes as a “business-friendly Democrat,” is reluctant to bolster education funding with a commercial activities tax without “significant PERS cost cuts.” This roughly parallels the view of Senate Republicans who staged a walkout this week, denying the Senate a quorum to take floor votes, including the vote on education funding bill. The 12 Senate Republicans feel left out of the final compromise on the tax measure, which has already passed the House, and want to slow it down to allow more time to negotiate an agreement on PERS.

Jaquiss says Johnson also isn’t keen on the Clean Energy Jobs bill that sets up a cap-and-trade system, apparently agreeing with opponents that it will result in higher costs for Oregon consumers. It’s little surprise – and probably not a coincidence – that the state’s leading business advocacy group, Oregon Business & Industry, just gave Johnson its first Jobs Champion Award.

As the crucial Senate floor vote for the Student Success package, Johnson could use her leverage on a PERS deal or to scuttle cap and trade, but probably not both, Jaquiss claims. Her decision may be informed by which option has the strongest political legs. 

In his article, Jaquiss says the other power player in this legislative poker game is House Speaker Tina Kotek, D-Portland. She has a comfortable supermajority in the House (the Student Success Act passed by a 37-23 vote) – and gubernatorial aspirations. Wading into a contentious fight over PERS isn’t on the priority list, but she may not be able to avoid it. Kotek may have to do what it takes to smooth the way for Johnson’s vote on education funding. 

The idea floating around Capitol hallways to deal with the large and growing PERS unfunded liability is to require teachers and possibly all public employees to begin contributing to their own retirement funds. Governor Brown, who is term-limited and under pressure to address PERS funding, could accept that, Jaquiss says, but it would be a tougher draw for Kotek who enjoys high level of trust from Oregon unions. 

Keeping with the poker motif, Jaquiss says Senate Republicans see a delay on the education funding bill as a way to call the bluff of Democrats, forcing backstairs conversations into the open and either gain PERS concessions or a death blow to cap and trade.

Senate Republicans can’t hide out forever, so a deal or no-deal should emerge soon. The Student Success Act is a safe bet to pass. Everything else is 50-50.

 

Silverton Lawmaker Reports on Issues Close to Home

A GOP lawmaker from Silverton gives a mid-session status report to his constituents that focuses less on partisan issues and more on issues with local impact, such as oil train safety, operation of farm equipment on state highways and mental health providers reporting on patients who pose an imminent threat to themselves.

A GOP lawmaker from Silverton gives a mid-session status report to his constituents that focuses less on partisan issues and more on issues with local impact, such as oil train safety, operation of farm equipment on state highways and mental health providers reporting on patients who pose an imminent threat to themselves.

Rep. Rick Lewis, R-Silverton, is a member of the super-minority caucus in the Oregon House. But the former mayor and police chief of his home town hasn’t let that get in the way of pushing bills for his constituents.

In his April 17 newsletter to the folks back home, Lewis starts off by expressing concern about the state’s long-term fiscal sustainability, then quickly moves on to discuss what he has been doing in the first half of the 2019 legislative session that impacts his mid-Willamette Valley constituency. 

His most notable achievement is serving as co-chair of the Oil Train Safety work group, which began to meet in the spring of 2018. Lewis reports the work group produced two legislative concepts resulting in House 2209, requiring railroads that own or operate hazard train routes in Oregon to prepare oil spill contingency plans approved by the Department of Environmental Quality. HB 2209 passed out of committee on a unanimous vote.

Lewis also served as co-chair for a work group on House Bill 2201 that would establish a Veteran Educational Bridge Grant Program within the Oregon Department of Veterans’ Affairs. The program, according to Lewis, would provide assistance to veterans who don’t qualify for other kinds of assistance, such as veterans who could lose their financial aid because they are unable to complete a degree program due to the unavailability of required courses.

Lewis told constituents House Bill 2236, for which he was the chief sponsor, cleared the Oregon House. The bill, he says, clarifies the operation of farm equipment at low speeds on state highways and removes confusion when equipment moves across county lines that have had different regulations.

Rep. Rick Lewis, like many Oregon lawmakers, spends most of his time in Salem working on lower-profile issues of importance to the state and his local community.

Rep. Rick Lewis, like many Oregon lawmakers, spends most of his time in Salem working on lower-profile issues of importance to the state and his local community.

On behalf of his farm-centric community, Lewis expressed hope that House Bill 2264, which exempts farm machinery and equipment from property taxation, would be scheduled for a work session and pass out of House Revenue. 

Lewis said he was unsuccessful in pushing through House Bill 3406 that would have reimbursed small cities and counties if they waive system development charges for affordable housing. He indicated he would re-introduce his measure in the 2020 session.

Another failure Lewis noted was House Bill 3404, which he sponsored to clarify under what situations mental health providers would be required to report imminent threats made by their patients. The bill also would have granted civil and criminal immunity for providers who made reports in good faith.

The Lewis newsletter is not untypical for Oregon lawmakers who mostly work outside the polarizing bubble of partisanship on issues that concern everyday Oregonians. It is harder for legislators in the minority to move bills, but as Lewis’ report shows, it isn’t impossible.

News reports of the legislature, especially as the session winds down with high-profile issues in the balance, tend to highlight controversy. At the mid-point of the session, it is useful to give some light to the bipartisan and serious work that occurs without a lot of fanfare.

Student Success Plan, Tax to Pay for It Take Shape

Increased investment in early childhood education is one of the goals of the Student Success Plan that has been rolled out by a joint legislative committee. The rollout also included details on a commercial activities tax that could raise the $2 billion called for in the education plan.

Increased investment in early childhood education is one of the goals of the Student Success Plan that has been rolled out by a joint legislative committee. The rollout also included details on a commercial activities tax that could raise the $2 billion called for in the education plan.

The Joint Committee on School Success rolled out its “Student Success” plan that spells out how $2 billion in new revenue would be invested, where the money would come from and how it won’t be spent.

The leaders of the joint committee, which spent 14 months touring the state and visiting 77 schools, briefed reporters on the major components of their plan. As reported by OPB’s Rob Manning, the spending targets are:

  • $400 million per two-year budget cycle on early childhood priorities, including full funding for Early Childhood Special Education.

  • $600 million per biennium on “statewide investments” such as dropout prevention and supports for students with disabilities.

  • $1 billion per biennium for a “school improvement” fund, described as “non-competitive grants” toward specific goals, such as smaller class sizes, a longer school year and additional health professionals in schools.

The $2 billion they seek would likely come from a commercial activities tax tiered by the size of business earnings. Two options were presented, including one that would allow businesses to deduct labor expenses in exchange for a higher tax rate. Individual income tax rates would be adjusted slightly downward to account for pass-through price increases resulting from the new tax.

Rep. Greg Smith, R-Umatilla, a vice chair of the committee, spoke in favor of the new tax. He speculated other Republicans would join him to boost education funding.

“I think that there are Republicans who want to make strategic investments in education,” Manning quotes Smith as saying. “Once they have the opportunity to see what the revenue package looks like both on the personal income tax side and the commercial activity tax side, I believe there may be votes there.”

Committee leaders politely dismissed the idea that any of the $2 billion would go to higher education, even though Governor Kate Brown has hinted it might. “The goal of this committee’s work has been pre-K to 12 from the start, and that’s because in 1990, when Measure 5 was passed, we had a significant shift in how funding worked,” according to Co-chair Rep. Barbara Smith Warner, D-Portland. 

Committee leaders acknowledged conversations to address the growing unfunded PERS liability, but noted none of the proposed commercial activities tax would go to PERS. 

Many legislative hurdles remain from a briefing to final passage of an ambitious education improvement plan, a new corporate tax and tinkering with personal income tax rates. Those conversations about PERS, which now include former Democratic Governor Ted Kulongoski, cast a long political and fiscal shadow over the plan and new revenue.

Brown has resisted engaging in ways to modify PERS benefits, focusing instead on ways to secure sizable chunks of money to whittle down the unfunded liability, such as the possible sale of SAIF. Kulongoski and former GOP legislator Chris Telfer are the chief sponsors of a pair of initiatives for the 2020 general election ballot that would reduce some public employee retirement benefits and divert some benefits to a 401(k) savings plan.

Tim Nesbitt, a former Oregon AFL-CIO president, says he has received a grant from the Oregon Business Council to form a broad-based coalition in support of the initiatives. Nesbitt said he hopes the prospect of a ballot measure fight will spur action in the 2019 legislative session.

Oregon labor officials have testified the two initiatives would fail to make a dent in the unfunded liability and likely would be declared unconstitutional. They insisted that boosting funding for education shouldn’t be an excuse for cutting benefits for public employees. 

 

Glimmer of Hope Surfaces on I-5 Bridge Project Restart

A glimmer of hope has appeared that Washington and Oregon may take the first steps to resume work on replacing I-5 Columbia River Bridge by restarting bi-state project office.

A glimmer of hope has appeared that Washington and Oregon may take the first steps to resume work on replacing I-5 Columbia River Bridge by restarting bi-state project office.

Someday, the I-5 Columbia River Bridge will be replaced. And Washington State hopes that someday is sooner rather than later.

The Washington Legislature generated some fresh enthusiasm when it included $450 million in a proposed transportation investment package to cover the state’s projected share of the cost to replace the bridge. Plus, Washington Governor Jay Inslee included $17.5 million to re-open a project office in his proposed 2019-2020 transportation budget.

The Southwest Washington legislative delegation has tried to stoke the appropriations fires and managed to make the bridge replacement that state’s number one priority in the propose transportation investment package that passed out of the Washington Senate Transportation Committee. However, with a portion of funding for such a packaged tied to creating a carbon fee in Washington, building the necessary support to pass it this year looks more like embers than sparks.

Washington looks poised to retain at least $8.5 million for a project office. While less than early-session expectations, opening a project office would begin laying the groundwork for replacing the bridge. Washington’s Department of Transportation, along with its Oregon counterpart, local cities and community partners, would start re-evaluating permits and design, develop a fresh budget and re-engage with stakeholders on both sides of the river.

Light rail, the bogeyman that helped sink a bi-state deal several years ago, remains a lightning rod. In his budget proposal, Inslee included a light rail provision, even though regional advocates encouraged calling for “mass transit“ to allow for further evaluation. Any mention of light rail has disappeared.

Meanwhile, Oregon, the putative partner in a bridge replacement deal, has been more or less quiet. There have been back-channel conversations between Olympia and Salem, but no real commitments. Majority Democrats in Salem are consumed with a cap-and-trade proposal and quest to raise $2 billion in new revenue for public education. A major transportation funding package is not anywhere near the adult table.

Oregon House Speaker Tina Kotek remains the most ardent advocate for replacing the bridge, which is part of her North Portland legislative district. She probably has support in the office of Oregon Governor Kate Brown and a good chunk of lawmakers. But without a strong, definitive move by Washington officials there is little reason to start beating the drums in Salem. That definitive move appears to be on the horizon.

 

Climate Kids Lawsuit Could Overshadow Legislative Action

A group of 21 young plaintiffs, 11 of them from Oregon, are challenging the federal government to take responsibility for a “climate system capable of sustaining human life.” Their lawsuit has so far withstood five attempts to bock or dismiss it. They are inching closer to an actual trial that could prove a turning point on public acceptance of climate change and the urgent need for a credible response. [Photo Credit: Robin Loznak/ZUMA]

A group of 21 young plaintiffs, 11 of them from Oregon, are challenging the federal government to take responsibility for a “climate system capable of sustaining human life.” Their lawsuit has so far withstood five attempts to bock or dismiss it. They are inching closer to an actual trial that could prove a turning point on public acceptance of climate change and the urgent need for a credible response. [Photo Credit: Robin Loznak/ZUMA]

The efforts by Oregon Governor Kate and a Democratically controlled legislature to pass a measure to limit greenhouse gas emissions may be overshadowed by a more sweeping climate lawsuit initiated in 2016 largely on behalf of young Oregonians. 

The so-called Climate Kids have filed a lawsuit claiming a constitutional right “to life, liberty and property” under a government-backed “climate system capable of sustaining human life.” The lawsuit bears the name of Kelsey Juliana, who is a now a 22-year-old University of Oregon student. Juliana was interviewed on 60 Minutes over the weekend and declared, "My generation and all the generations to come have everything to lose if we don't act on climate change right now."

The longshot lawsuit, initially considered fanciful, has survived five attempts to block it in US District Court in Oregon, the Ninth Circuit Court of Appeals and the Supreme Court. Despite efforts by the fossil fuel industry and the Trump administration, the lawsuit continues to move toward an actual trial. 

“Exercising my ‘reasoned judgment,’ I have no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society.” US District of Oregon Judge Ann Aiken

“Exercising my ‘reasoned judgment,’ I have no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society.” US District of Oregon Judge Ann Aiken

The Climate Kids and their Oregon-based attorneys insist they have compiled what they believe is overwhelming evidence. A press release from Julia Olson, executive director and chief legal counsel of Our Children’s Trust, accuses the “federal government of creating a national energy system that causes climate change, is depriving them of their constitutional rights to life, liberty, and property and [failing] to protect essential public trust resources. We look forward to presenting the scientific evidence of the harms and dangers these children face as a result of the actions their government has taken to cause the climate crisis.”

Julia Olson, executive director of Oregon-based Our Children’s Trust, is co-counsel on the Climate Kids lawsuit arguing younger Americans have a constitutional right to a climate system that can sustain human life.

Julia Olson, executive director of Oregon-based Our Children’s Trust, is co-counsel on the Climate Kids lawsuit arguing younger Americans have a constitutional right to a climate system that can sustain human life.

Olson told 60 Minutes the evidence is staggering. The Supreme Court, in its unsigned decision to let the lawsuit proceed, called its breadth “striking.”

Juliana is one of 21 youth plaintiffs who range in age from 11 to 22 years old. The ages of the plaintiffs are welded to the core of the constitutional argument. One pleading on behalf of the youths said, “As the government continues to neglect the consequences of climate change, they say, their future selves – and their future children – will suffer.” Eleven of the plaintiffs live in Oregon. Other plaintiffs hail from Colorado, Florida, New York, Hawaii, Arizona, Alaska, Washington, Pennsylvania and Louisiana.

An extensive list of supporters has accreted as challenges to the lawsuit have proceeded. They included well known environmental groups such as Greenpeace and the Sierra Club, interfaith organizations and legal scholars. The League of Women Voters submitted an amicus brief that asserted it is a proper role for courts to act as a check and balance on political branches to address “irreversible impacts” that affect younger generations of Americans and generations to follow. 

Two of the underlying legal arguments that have emerged in Juliana v. United States involve “atmospheric trust litigation” based on a public trust doctrine, which has been applied to protect shorelines and other valuable natural resources.

Ultimately, the goal of the Climate Kids lawsuit are environmental policies that would accelerate efforts to reduce damaging greenhouse gas emissions and eventually abandon a carbon-based economy. Opponents variously argue that is an unattainable objective in any near-term time frame. Political opponents claim the lawsuit, if successful, would subordinate climate policy set by the President and Congress to a court ruling.

Assuming the lawsuit actually makes it to trial, the evidence presented could mark a turning point in broader public acceptance of the reality of climate change and the need for urgent action. The trial is likely to be linked with the Green New Deal that has been introduced in Congress and to propel more state environmental activism, especially in states like Oregon where the trial would be held and covered extensively.

 

Lawmakers Take Big First Step in a Busy Health Care Session

Health care issues will play a dominant role in the 2019 Oregon legislative session. One of the most significant health care bills that will help close the budget gap for Oregon Medicaid’s program moved through two committees last week. And a bill to start an analysis of state-sponsored health insurance for all Oregonians was introduced with 40 legislative cosponsors.

Health care issues will play a dominant role in the 2019 Oregon legislative session. One of the most significant health care bills that will help close the budget gap for Oregon Medicaid’s program moved through two committees last week. And a bill to start an analysis of state-sponsored health insurance for all Oregonians was introduced with 40 legislative cosponsors.

Oregon lawmakers took the first step last week to secure funding for the Oregon Health Plan and the state’s reinsurance program that helps pay for expensive health care claims. The revenue plan outlined in HB 2010, which passed out of the Joint Ways and Means Committee last Friday, will generate more than $400 million toward the anticipated hole in the state’s Medicaid budget.

The funding plan, which health care industry officials negotiated and support, extends a 6 percent hospital tax and a 2 percent tax on insurance plans. The plan introduces a 2 percent tax on “stop loss coverage” for large, self-insured companies. The insurance tax is expected to generate $320 million and the hospital tax $98 million.

Unlike in previous legislative sessions, this funding plan will extend for six years, not just a single biennium.

Other components of Governor Brown’s Medicaid funding package not included in HB 2010, but which will eventually face debate in the Capitol, include a $2 per pack increase on the state’s tobacco tax, a tax on employers with employees covered by Medicaid and a state General Fund contribution. Many observers believe the $95 million projected from the tobacco tax could be in jeopardy because it will likely be referred to voters to approve.

Republicans on the House Health Care Committee, which heard the bill earlier last week, offered amendments to exempt K-12 school district, college students and small businesses from Medicaid-related taxes. Chair Mitch Greenlick counseled against the amendments, which he said could upset a delicately balanced funding plan agreement. The amendments were defeated and two Republicans on the policy committee voted for final passage of the measure, sending it to a Friday hearing in the Joint Ways and Means Committee. 

Patching the Medicaid funding gap is one of several major funding proposals the 2019 Oregon legislature will face. Brown has called on lawmakers to unearth $2 billion in additional tax revenue to boost public education funding. The governor and Democratic legislative leaders also are committed to adopt some form of a cap and trade system that will impose costs on manufacturers and the transportation sector as a means to curb greenhouse gas emissions.

The Medicaid funding package is flanked by another health care initiative – the Health Care for All Oregon plan. Under Senate Bill 770, a board would be created to fill in details of what a plan would look like that replaces private and state employee insurance coverage, as well as estimate what such a plan would cost to implement.

Senator James Manning, D-Eugene, chief sponsor of the measure, says, “This is the first step. It’s not going to happen overnight. This bill provides an opportunity to get a fiscal analysis and develop a work group to drill down into the nuts and bolts of how we get there.”

With secure funding, the state Medicaid program, which serves more than 1 million Oregonians, will press for additional reforms carried out by coordinated care organizations (CCOs) throughout the state. Lori Coyner, who has resumed her job as the Medicaid director that she left in 2017, will be responsible for overseeing $5 billion in spending, holding annual cost increases to 3.4 percent and managing what is nicknamed CCO 2.0 over the next five years.

In an interview with the Lund Report, Coyner said her priorities include streamlining business processes, improving health equity, building stronger ties with tribes and addressing social determinants of health such as education, housing and transportation. This might involve spending dollars on non-medical costs, such as home air filters for families with asthmatic children. There also are efforts to tie affordable housing with social services. 

“Another big priority is looking at the behavioral health system,” Coyner added. “We are hoping to get a new behavioral health director and work closely with [CCOs] to advance integration for members with mental health challenges and addiction issues. We made big strides in CCO 1.0 in that area, but there is a lot more that can be done.”

 

Democrats Address Climate Change with Carbon Caps, Modernized Infrastructure

Democrats in the Oregon legislature and Congress will be pushing legislation to cap carbon emissions, including from transportation, which is the largest source of greenhouse gas emissions. Oregon lawmakers will consider a cap and trade proposal, while Oregon Congressman Peter DeFazio presses for a $500 billion federal investment in modernized infrastructure.

Democrats in the Oregon legislature and Congress will be pushing legislation to cap carbon emissions, including from transportation, which is the largest source of greenhouse gas emissions. Oregon lawmakers will consider a cap and trade proposal, while Oregon Congressman Peter DeFazio presses for a $500 billion federal investment in modernized infrastructure.

The Oregon cap and trade legislation was unveiled last week.  Oregon Public Broadcasting  provided a glimpse into its details.

The Oregon cap and trade legislation was unveiled last week. Oregon Public Broadcasting provided a glimpse into its details.

(Updated February 1, 2019)

While the big event in the 2019 Oregon legislative session is sure to be a $2 billion revenue package for schools and an industry-supported Medicaid package, the first major legislative thrust by Democrats will be a cap and trade bill designed to put a lid on carbon emissions. A key Oregonian in Congress is also pushing for a major response to climate change.

The bill is expected to surface by the end of the week. Its chief architect, Senator Michael Dembrow, D-Portland, says the measure will be very similar to a previously introduced bill, but with more clarity on issues such as oversight, mitigation for vulnerable industries and how quickly the emission cap will decline. Republicans are grumbling they haven’t seen evolving drafts since late last year.

Not surprisingly, Dembrow predicts a “noisy few weeks” when the Joint Committee on Carbon Reduction, which he co-chairs, considers the controversial measure, called the Clean Energy Jobs Bill.

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Environmental groups expect a cap and trade bill will pass this session. Governor Brown and Democratic legislators vigorously campaigned in support of climate change legislation. Brown's budget framework, released late last year, detailed the creation of a Carbon Policy Office, with a $1.4 million budget, that has been charged with exploring how Oregon can reduce its greenhouse gas emissions while still growing the state’s economy.

State Senator Michael Dembrow, D-Portland, and Oregon Congressman Peter DeFazio will be on point with legislation to address climate change. Dembrow co-chairs the committee to take up a cap and trade system that seeks to limit carbon emissions, including from transportation fuels. DeFazio is floating a measure to invest $500 billion to modernize the nation’s transportation system and reduce carbon emissions, while increasing resiliency in highways, tunnels and bridges.

State Senator Michael Dembrow, D-Portland, and Oregon Congressman Peter DeFazio will be on point with legislation to address climate change. Dembrow co-chairs the committee to take up a cap and trade system that seeks to limit carbon emissions, including from transportation fuels. DeFazio is floating a measure to invest $500 billion to modernize the nation’s transportation system and reduce carbon emissions, while increasing resiliency in highways, tunnels and bridges.

The basic idea is to set a fixed limit on greenhouse gas emissions and issue allowances that can be traded in an open market, which currently includes seven states and four Canadian provinces. The greenhouse gas emission limit would ratchet down over time.

The Environmental Defense Fund anticipates Oregon’s cap and trade bill will parallel a similar structure in California that extends to transportation fuels as well as regulated electricity and natural gas utilities.

As Oregon lawmakers hack away on climate change legislation, Oregon Congressman Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, is preparing to push for a $500 billion investment to address crumbling US infrastructure, support “green” infrastructure that is more resilient to climate change and develop cleaner fuels. Among other funding, DeFazio proposes issuing 30-year bonds paid for by indexing the federal gas tax to inflation, which he says could generate between $17 to $20 billion per year to invest.

He wants the House to pass a version of his legislation in the next six months and it appears House Democratic leaders support his push.

DeFazio told Curbed in an interview there is a $102 billion backlog to repair America’s metropolitan transit systems and that critical transportation routes such as the Holland Tunnel in New York and the I-5 Columbia River Bridge could be wiped out by flooding or earthquakes, causing economic catastrophes.

Curbed observed, “[DeFazio] takes control of the Transportation and Infrastructure Committee during a pivotal time when technology advances, long-term funding issues and climate change demand a comprehensive, forward-thinking plan.”

In quintessential DeFazio fashion, he said, “I’m going to approach it from a very hard-hearted way: Boy, you’re stupid if you don’t make these investments.”

 

Oregon, Washington May Provide Presidential Hopefuls

Oregon Senator Jeff Merkley and Washington Governor Jay Inslee are seriously weighing Democratic presidential campaigns in 2020. Both are from the progressive lane of the Democratic Party, have earned national recognition for their key issues and have campaigned in early-voting states such as Iowa and New Hampshire.

Oregon Senator Jeff Merkley and Washington Governor Jay Inslee are seriously weighing Democratic presidential campaigns in 2020. Both are from the progressive lane of the Democratic Party, have earned national recognition for their key issues and have campaigned in early-voting states such as Iowa and New Hampshire.

Oregon’s and Washington’s role in recent presidential elections has been relegated to ATMs. Candidates swoop in, attend high-priced fundraisers and slip out of town, often without even a perfunctory press interview. That may change in 2020.

Oregon Senator Jeff Merkley and Washington Governor Jay Inslee have dropped huge hints they are considering entering the 2020 Democratic presidential sweepstakes. Though both would be considered today as political longshots, each has a distinct political issue to push. Merkley is focused on voting rights, Inslee on responding to climate change, as issue he has championed for years, including the book he coauthored, Apollo’s Fire

Merkley has earned national recognition for going to Texas to expose the internment at the border of asylum-seeking Latin American migrants and their children. Inslee gained recognition for leading the Democratic Governors Association as it reclaimed a number of statehouses in the 2018 midterm election. 

Both hail from the progressive wing of the Democratic Party, which could be a crowded lane in the 2020 Democratic primary with candidates such as Senators Elizabeth Warren, Bernie Sanders, Cory Booker and Kamala Harris. Merkley and Inslee have been point persons confronting President Trump on key issues such as immigration, environmental protection and trade policy. Both have hit the campaign hustings, appearing side by side at a campaign event in Johnson City, Iowa and in New Hampshire, both early-voting primary states.

One advantage Inslee has over better-known candidates, and Merkley, is his executive experience (Inslee served in Congress before his election as governor). Now serving his second term, Inslee can point to achievements on voting rights, a higher minimum wage, ensuring net neutrality and major transportation investments.

As Jennifer Rubin, an opinion writer for the Washington Post, sees it: “[Inslee] might consider stressing his entire record as evidence of his ability to successfully govern, which includes climate change policies, and his role in challenging Trump’s immigration policies. Almost as an afterthought, he notes that renewable-energy legislation helped launched a multibillion-dollar wind industry and helped his state lead in GDP growth and wages. That seems to be his greatest selling point – creating a progressive haven while growing the economy, raising wages and saving the planet.”

Another advantage of potential Merkley and Inslee candidacies is that neither are in their 70s, as are Warren, Sanders, Joe Biden – and Donald Trump. Merkley is 62 and Inslee is 67. They also are fresh faces on the national political landscape, which might appeal to newly registered Democratic voters that helped Democrats regain control of the House.

Merkley faces a big decision. If he runs for President, he can’t under Oregon law run simultaneously for re-election to the Senate. He has told reporters he will make a final decision in the early part of this year. Meanwhile, Merkley has staged what amounts to a marathon of townhall meetings in Oregon before the new Congress convened this week. It is unclear whether he has taken steps to recruit a campaign staff or start fundraising in earnest. Political observers suggest it may take anywhere from $40 to $60 million for a Democratic presidential candidate to make it to Super Tuesday primaries in March, 2020.

Washington Governor Jay Inslee, like his potential Pacific Northwest presidential aspirant Jeff Merkley, has gone to the US-Mexico border to denounce Trump administration immigration policies and establish their credentials as credible national contenders.

Washington Governor Jay Inslee, like his potential Pacific Northwest presidential aspirant Jeff Merkley, has gone to the US-Mexico border to denounce Trump administration immigration policies and establish their credentials as credible national contenders.

Inslee received encouragement to throw his hat in the presidential ring in 2016 as one of the few Democratic governors to survive. He has campaigned around the country for Democratic gubernatorial candidates in 2018, giving him more exposure than usually accrues to a governor from the Pacific Northwest. Inslee is given credit for helping seven Democrats capture statehouses and assisting some Democratic incumbents such as Oregon Governor Kate Brown fend off well-financed GOP challengers.

There are indications Inslee is lining up donors to his political action committee and preparing to form a presidential exploratory committee, which is something Warren did this week as she moved closer to becoming an announced candidate. He also has amassed a list of more than 200,00 climate change supporters nationwide that could serve as a jumping off point for his candidacy.

The presidential primaries will have some other new twists. California and Texas have moved up their primary election dates in a bid to have a greater say about who emerges as party nominees. As big states with sprawling, expensive media markets, they pose special challenges for lesser known candidates without big campaign war chests. 

Another challenge is the emergence of Beto O’Rourke, who lost his bid to unseat Texas Senator Ted Cruz while gaining a rabid national following and lengthy small-donor contributor list, and Harris, who represents California in the US Senate and received positive national exposure for her sharp questioning of Supreme Court nominee Brett Kavanaugh.

The best thing going for Merkley and/or Inslee candidacies is a clear focus, which will be essential in a field of up to 20 candidates and a Democratic debate schedule that begins as early as this summer. Democratic voters – and GOP political strategists – will be watching closely to see who stands out from the pack based on substance and style and who has the best chance to go toe-to-toe with Trump in the general election.

 

A Challenge and a Legacy Lie Ahead for Legislative Democrats

Oregon’s Democratically controlled 2019 legislature will have its work cut out for it with a $2 billion revenue challenge for education, an $800 million hole to patch for Medicaid and passage of legacy legislation to curb greenhouse gas emissions through a cap-and-trade program.

Oregon’s Democratically controlled 2019 legislature will have its work cut out for it with a $2 billion revenue challenge for education, an $800 million hole to patch for Medicaid and passage of legacy legislation to curb greenhouse gas emissions through a cap-and-trade program.

The Democratically controlled 2019 Oregon legislative session will address a “once in a generation” challenge to boost education funding by $2 billion and a potential legacy-making bill dealing with climate change.

Expectations are high heading into the session, which begins in January. Neither will be a cake-walk to achieve, despite Democratic supermajorities in the House and Senate.

Some of the complicating factors are:

  • Oregon lawmakers also have to find more than $800 million to sustain the state’s Medicaid program.

  • The Public Employees Retirement System unfunded liability is expected to grow by possibly as much as $4 billion, with no strategy in place to reduce it.

  • There are signs the US economic recovery is facing headwinds caused by an escalating global trade war, political unrest in Europe and a weakening economy in China.

Passing major tax legislation – and avoiding a referral to voters – is never easy, whether for schools or cleaning up the environment. For example, despite polls showing general support for climate legislation, Washington state voters have twice rejected carbon tax proposals. Oregon’s approach, which involves capping greenhouse gas emissions and allowing carbon trading in a state or regional marketplace, is different, but will still be cast by opponents as a tax.

Governor Brown has called her $2 billion challenge for education an opportunity that lawmakers can’t pass up because of the state’s robust economy and the needed Democratic votes in the House and Senate to approve tax bills. Brown also has called the Clean Energy Jobs bill “absolutely a legacy issue.”

Senate President Peter Courtney has endorsed the legacy label for the Clean Energy Jobs bill. "As a 75-year older person – you know I'm going to go to the children and grandchildren – I cannot think of a more serious issue," he said.

While it might be legacy legislation, it also has been introduced and failed to pass in the previous two legislative sessions. Part of the reason is its inherent complexity. Ted Sickinger filed a report for The Oregonian that outlined some of the complexity, which includes exactly what emissions will be capped and what emissions will be exempted.

In the 2019 session, advocates for the Clean Energy Jobs bill have apparently cut a deal with utilities that say their ratepayers are already footing the bill for greenhouse gas emission reductions baked into their future energy plans. Even that compromise isn’t without some debate over whether the utility plans should accelerate emission reductions. Timber and agriculture also may be exempted.

Another complicating factor is “leakage,” which boils down to manufacturing operations relocating to another state to avoid the cost of a cap-and-trade system. Republican Senator Cliff Bentz points to Ore-Ida Foods in Ontario. "I do not want to drive it 150 yards away into Idaho," Sickinger reported. "It will be devastating."

A report unveiled last week confirms Bentz’s fear that the potential for leakage in the manufacturing and industrial sectors is substantial, which if it happened to any degree would throw shade on the legacy of the legislation. “It would also eliminate a big chunk of allowance revenue [advocacy] groups are expecting to reinvest in carbon reduction and climate change adaptation programs,” Sickinger said. 

Rural interests have expressed concern that the increased price of fuel for cars and trucks will disproportionately hurt them at the pump. Then there is a constitutional question about whether any tax revenue collected from cars and trucks can escape the Oregon Highway Trust Fund. In anticipation of that question, Senator Michael Dembrow wants to include a provision to fast-track a challenge to the Oregon Supreme Court.

There is the need to put the program, if created, some place in the state bureaucracy. In her recommended 2019-2021 budget, Brown calls for elimination of the Department of Energy. She proposed creation of a new agency – the Oregon Climate Authority, which would assume the role of the existing Oregon Global Warming Commission. Creating a new agency and identifying who will sit on its advisory board can produce legendary backroom legacies.

Finally, in a system that involves carbon credits, you need a marketplace to trade them. Backers of the legislation and some industry groups favor linking the Oregon cap-and-trade program to the Western Climate Initiative, led by California. Bentz worries Oregon will be like a flea on a dog’s tail without much influence on the direction of the marketplace. 

Neither the $2 billion education challenge or the Clean Energy Jobs bill figure to be among the early bills to move in the 2019 session. Their destiny inevitably will be as part of 11th-hour legislative maneuvers to clear a path to adjournment, probably sometime next July. That’s often how legacies are born.

 

 

Raising $2 Billion Won’t Be a Slam Dunk

Democrats hold all the main levers of power in Salem, including supermajorities in the Oregon House and Senate that could pass tax hikes without any Republican votes. But meeting Governor Brown’s $2 billion revenue challenge won’t be easy and certainly won’t be a slam dunk.

Democrats hold all the main levers of power in Salem, including supermajorities in the Oregon House and Senate that could pass tax hikes without any Republican votes. But meeting Governor Brown’s $2 billion revenue challenge won’t be easy and certainly won’t be a slam dunk.

Democrats hold supermajorities in the House and Senate to pass revenue-raising measures without Republican votes. Business interests may be relegated to the political sidelines. Yet, Governor Brown’s $2 billion revenue challenge in the 2019-2021 biennium seems tenuous.

In her budget message, Brown didn’t specify how she wanted to raise an additional $2 billion in revenue to fund public education. However, she has been very clear she isn’t interested in tying a revenue increase to reduction in PERS benefits, which business interests have advocated. The implication is that legislative Democrats have the votes and can decide on the details.

It may not be that simple. 

For starters, the PERS unfunded liability is likely to be larger. As The Oregonian’s Ted Sickinger reported, PERS investments so far this year have fallen significantly short of the assumed 7.2 percent return rate, which actuaries say could balloon the unfunded liability by as much as $4 billion. 

That won’t affect the current public employer contribution rate, which is already fixed for the next two years and cost an additional $1.1 billion. The PERS actuary predicts even steeper contribution rate increases beginning in 2021. Such a prospect may propel public employers to press harder for legislative solutions.

Jody Wiser of Tax Fairness Oregon has suggested paying down the PERS unfunded liability with a one-time diversion of the personal income tax kicker, pegged at $724 million. Voting to redirect a kicker payment to PERS is not impossible to imagine in a Democratically controlled legislature, but it still wouldn’t be an easy vote. Most of the kicker benefits flow to middle- and upper-income Oregon taxpayers, the people who typically write campaign checks to legislators.

Democrats have a comfortable supermajority in the Oregon House, but a less reliable one in the Oregon Senate. Senator Betsy Johnson, D-Scappoose, isn’t always a sure bet to go along with her 17 other Democratic colleagues on tax issues. As one of the two Senate co-chairs of the Joint Ways and Means Committee, Johnson will be part of the Democratic leadership team, but also hold more political leverage. Johnson is one of those votes you have to earn, not just count on.

Governor Brown touted her $2 billion revenue challenge by saying, “Our current strong economy gives us the best chance in a generation to address persistent, structural challenges so we can achieve our full potential.” Brown’s challenge drew this response from House Minority Leader Carl Wilson, R-Grants Pass, “This is not a challenge to the legislature; it is a challenge to the wallets and pocketbooks of hardworking Oregonians.”

Governor Brown touted her $2 billion revenue challenge by saying, “Our current strong economy gives us the best chance in a generation to address persistent, structural challenges so we can achieve our full potential.” Brown’s challenge drew this response from House Minority Leader Carl Wilson, R-Grants Pass, “This is not a challenge to the legislature; it is a challenge to the wallets and pocketbooks of hardworking Oregonians.”

Perhaps the biggest challenge to the $2 billion revenue challenge is the lack of a specific plan. Democrats pushed in the 2017 session a corporate tax restructuring proposal, but the proposal or something like it wouldn’t generate $2 billion. That means a tax plan would most likely need to affect business and personal income taxpayers.

A business tax hike might be a lighter lift after the congressional GOP tax cut that included several business tax breaks. But the federal legislation contained personal income tax provisions that limit state and local tax deductions, which will mean higher federal taxable income starting in 2018 for a chunk of Oregon taxpayers. Again, not insurmountable, but not necessarily easy.

Designing a tax proposal, especially one as large as $2 billion in Oregon’s context, will be messy. Tax ideas will be floated and dropped. The final product may not be a single tax increase, but a series of tax and fee increases. This revenue-raiser will be in addition to taxes and fees levied to fill the budget gap for Oregon’s Medicaid program.

How the $2 billion will be spent also will be the source of endless debate. A special committee traveled the state during the interim gathering ideas on how to improve public education in Oregon. It came up with a long list – and didn’t include suggestions for higher education.  

The slim 22-member House GOP caucus, with Rep. Carl Wilson, R-Grants Pass, as its new “superminority” leader, expects to be largely spectators on tax legislation this session. However, that doesn’t rule out a role as spoilers who seize every opportunity to take political pot shots at Democratically backed tax proposals – and rising PERS contributions by cities, counties and school districts.

There is always a possibility of a bipartisan revenue package, which might avoid a voter referral that would be costly and delay any revenue increases. Compromising on a $2 billion tax package would pose political risks for both Democrats and Republicans, but also afford potential political benefits.

Republican legislative control in a blue state seems remote, so negotiating for some “victories” as part of a tax package could be viewed by GOP voters as turning lemons into lemonade. Democrats could win accolades for leadership by including some GOP priorities instead of plowing them over in the legislative process.

One thing is sure. Raising $2 billion in the next biennium is not a slam dunk because there will be votes on one or more tax measures to raise that sum, huge debates over where the money should go and a dark shadow cast by PERS.

 

Brown’s Budget Focuses on Education, Human Services

Fresh off her successful re-election, Governor Kate Brown unveils her $23.6 billion General Fund budget that includes a $2 billion revenue challenge to state lawmakers to eliminate structural deficits in public education.

Fresh off her successful re-election, Governor Kate Brown unveils her $23.6 billion General Fund budget that includes a $2 billion revenue challenge to state lawmakers to eliminate structural deficits in public education.

Governor Kate Brown released her 2019-2021 budget recommendations that roll out ideas to shore up state health care funding, continue to invest in affordable housing and pay for initiatives she announced in her re-election campaign.

Proposed budgets are also notable for what they don’t include. Brown’s $23.6 billion budget proposal omits any mention of Public Employees Retirement System (PERS) cost-cutting or investing to restart bi-state conversations about an I-5 Columbia River Bridge replacement.

Her proposed budget did contain a $2 billion revenue challenge to legislators to bolster Oregon’s public education system. The challenge coincided with the rollout of the Coalition for the Common Good, consisting of Oregon public employee unions, a group of long-term care providers and Nike, in support of a major tax package.

“We want to bring a sole focus into revenue reform,” said James Carlson, president of the Oregon Health Care Association. “The reality is we can’t afford to waste another five years chasing a deal that may or may not happen” on cutting government costs.

Major business groups are positioned to resist a major tax overhaul without steps to reduce the $22 million unfunded PERS liability, which poses a drain on local government and school district budgets.

The $2 billion in new revenue would go to extend the school year, decrease class sizes, expand access to preschool and decrease college tuition at public universities. Brown faced sharp criticism in her re-election campaign for Oregon’s low high school graduation rate and failure to provide all of the funding voters authorized to expand career and technical education statewide.

Brown’s budget is heavy on aspiration and revenue projections. It also is very readable, has a reasonable amount of detail and is backed up by economic and revenue analysis. For example, it shows that $19 billion in revenue comes from Oregon personal income taxes, which represents 80 percent of the budget. Corporate income taxes and lottery proceeds contribute 4 and 5 percent, respectively. Roughly 50 percent of Brown’s proposed spending would go to education and 27 percent to human services.

Even though state lawmakers will have around $1 billion more in revenue than the previous biennium, Brown included tax increases in her budget, much of it to plug a funding hole for Medicaid. She proposed raising tobacco taxes by $2 and expanding taxes or assessments on hospitals, insurers and some employers.

In her budget, Brown proposes to shut down the Oregon Department of Energy and allow the state’s Chief Education Office to end. She asks for creation of an Oregon Climate Authority that would administer a “well-designed, market-based program to achieve our state climate emissions reduction goals at the least possible cost, while protecting our manufacturing industry and mitigating impacts on low-income and rural communities, communities of color, and Tribes.” 

Brown devotes substantial funding to her Children’s Agenda, including $285.8 million to provide preschool for an additional 10,000 children, $20 million for housing stability for homeless families, $13.8 million to integrate disorder treatment and behavioral health programs for families and $10 to increase “quality, affordable” child care. Brown wants to ensure 100 percent of Oregon children have health care access and proposes $47.1 million for a comprehensive child welfare system “based on positive human development” and that reduces the need for foster care.

Another campaign promise that showed up on Brown’s budget is incorporating standards from the federal Clean Air and Clean Water acts into state law. She also wants to fund an effort to eliminate a backlog in pending air quality permits.

Brown recommended expanding Oregon’s automatic voter registration system by including other public interactions with state agencies, such as applying for a hunting license, as triggers and sending voters ballots with return envelopes with pre-paid postage. 

After a gubernatorial election that broke state spending records and involved independent expenditures funded with dark money contributions, Brown committed to work on campaign finance reform.

The budget proposal sets aside money for earthquake preparedness, firearm safety, a university program dealing with threat assessment and immigrant defense. Some $5 million is earmarked for funding rural broadband infrastructure and $10 million for remediation of rural brownfields so they can be redeveloped.

Brown titled her budget proposal, “Turning Point: An Agenda for Oregon’s Future.” Here is the opening paragraph of the budget document:

“Oregon is at a turning point. Hundreds of thousands of people have moved here in the past 20 years, and a million more are on their way. We’ve done some good things over the years, but our state is changing, and changing rapidly. With the aging of Oregon’s baby boomer generation, and the impacts of recent dramatic federal tax changes and burgeoning federal deficits exacerbating these changes, one thing is clear: we can no longer do things the way we have in the past. We must grow up as a state, and we need to decide – together – what we want to be over the next 20 years. The challenges of affordability, of educating our kids, of mitigating the effects of climate change, and of maintaining a strong democracy will not get better unless we change our approach.”

She says Oregon must renew faith in democracy, spend money wisely, address affordability, prepare for the future and “finally fix our underfunded education system.”

 

An Unexpected Defeat and a Promising Victory

GOP State Rep. Rich Vial, who didn’t have an opponent until July, may have been surprised on election night when he was defeated by political newcomer Courtney Neron. Both have interesting back stories that show political candidates have lives beyond politics.

GOP State Rep. Rich Vial, who didn’t have an opponent until July, may have been surprised on election night when he was defeated by political newcomer Courtney Neron. Both have interesting back stories that show political candidates have lives beyond politics.

First-term State Rep. Rich Vial, R-Scholls, wasn’t on many media ‘watch’ lists in the 2018 election and didn’t have an opponent until as late as July, but he was on the short list of defeated legislative incumbents the day after the election.

First-time candidate Courtney Neron, a mother of two and former high school Spanish and French teacher, rode a blue wave of support for Democratic women candidates to defeat Vial, whose campaign outspent her seven to one. Neron won by a 51 to 48 percent margin and her election contributed to House Democrats exceeding a three-fifths supermajority in the 2019 legislative session. 

Neron was selected to run for the House District 26 seat after Ryan Spiker, who won the Democratic primary in May, withdrew for health reasons in June.

Unlike Rep. Julie Parrish, R-West Linn, who also was unseated in the election, Vial wasn’t a high-profile or partisan political figure in Salem. A lawyer, family farmer and avid ‘birder,” Vial went to Salem, in his words, “to deal with serious and complex problems that affect Oregonians.” 

In his farewell legislative newsletter, Vial wished everyone a happy Veterans Day, thanked constituents for the chance in serve in the legislature and made a plea to end “gridlock and bitterness.”

Former high school Spanish and French teacher Courtney Neron was pressed into service to run as the Democratic candidate opposing a first-term Republican House member. With strong Democratic support based on her activism as a volunteer, Neron rode Oregon’s blue wave to victory and will represent House District 26 in the 2019 Oregon legislature. [Photo Credit: Corey Buchanan/Wilsonville Spokesman]

Former high school Spanish and French teacher Courtney Neron was pressed into service to run as the Democratic candidate opposing a first-term Republican House member. With strong Democratic support based on her activism as a volunteer, Neron rode Oregon’s blue wave to victory and will represent House District 26 in the 2019 Oregon legislature. [Photo Credit: Corey Buchanan/Wilsonville Spokesman]

“Dealing with serious and complex policies that affect Oregonians, including education, health care and criminal justice, as well as land use, housing and transportation, has been both sobering and humbling,” Vial wrote. “It has also been an inspirational and gratifying journey.” 

“Moving forward, it is my hope that our elected officials strive to overcome the tribalism and partisanship that has so deeply divided our communities and our government, both here in Oregon and around the country,” he continued. “One of my personal goals as a legislator has been to rise above the partisan mentality in our government that has led to gridlock and bitterness at a time when we most need cooperation and compassion.”

Vial added, “I continue to hope that we will move beyond this polarization, reject radical ideology and return to civility, genuine dialogue and a focus on doing what is right, rather than what is politically expedient. In doing so, we must recognize that we have so much more in common than we are different.”

Often lost in political campaigns are the human lives beyond candidacies. In his initial legislative newsletter, Vial described his “uniquely large family” that includes six biological children and “dozens” of children they parented. Seven Vietnamese refugees became permanent parts of the Vial household. He has more than 42 grandchildren.

Neron has an interesting back story, too, that includes living in France, Mexico and Germany before settling into a home with her husband and two children in Wilsonville. She attended the University of Oregon, where she met her husband, and earned a graduate degree from Pacific University.  Neron has taught in Yamhill-Carlton, Tualatin and Tigard. She resigned her teaching position to run for the legislature.

One of Neron’s top issues as an Oregon lawmaker will be working for smaller class sizes, which she says are critical to greater student success in classrooms. Her other priorities are “safer communities, logical transportation solutions and necessary environmental protections.”

 

Brown, Democrats Ride Strong Wave of Voter Turnout

Oregon Governor Kate Brown overcame a trail of administrative miscues and an aggressive campaign by challenger Knute Buehler to win re-election to a full four-year term. High voter turnout also swept out three Republican House incumbents and gave Democrats supermajorities in both the House and Senate. [Photo Credit: Steve Dykes, AP]

Oregon Governor Kate Brown overcame a trail of administrative miscues and an aggressive campaign by challenger Knute Buehler to win re-election to a full four-year term. High voter turnout also swept out three Republican House incumbents and gave Democrats supermajorities in both the House and Senate. [Photo Credit: Steve Dykes, AP]

Governor Kate Brown turned back a spirited challenge from Republican Knute Buehler and Democrats earned super-majorities in both the Oregon House and Senate by unseating three sitting House GOP members.

Oregonians rejected ballot measures to end the state’s sanctuary status, ban public funding for abortions and block taxation on groceries. Voters approved a measure to allow local governments to use public money with private developers to build affordable housing. In Washington, voters defeated a carbon tax proposal.

In key local races, Kathryn Harrington won as Washington County Chair and Jo Ann Hardesty glided to victory on the Portland City Commission, becoming the first African-American woman to sit on the commission. Oregon City Mayor Dan Holladay won re-election. A majority of local ballot measures passed. A full list of election results can be found here

The Brown-Buehler contest set campaign spending records in Oregon and may be the spark for campaign finance reform in the 2019 legislative session. Despite running an effective campaign, Buehler’s loss further dented the notion that a moderate Republican could defeat a Democrat in a race for governor in Oregon.

There may not have been a blue wave throughout the nation, but strong turnout by Democratic voters contributed to the defeats of incumbent GOP Reps. Julie Parrish (West Linn), Rich Vial (Sherwood) and Jeff Helfrich (Hood River). House Democrats increased their margin of control to 38-22, up from their 35-25 margin in the previous session. It takes 36 votes to reach a House supermajority required to pass revenue-raising measures.

Democrats managed to flip one seat in the Senate where Jeff Golden prevailed in a seat held last session by GOP Senator Alan DeBoer who didn’t seek re-election. That one seat was enough to give Democrats a Senate supermajority of 18-12.

No changes are anticipated in Democratic leadership. Senate President Peter Courtney easily won re-election to a sixth term and has led the Senate since the 2003 session. Speaker Tina Kotek was elected to the Oregon House in 2006 and became Speaker in the 2013 legislative session.

Brown’s seemingly comfortable 5-point lead over Buehler didn’t necessarily reflect the bruising intensity of the gubernatorial campaign and the closeness of the contest, which drew national attention because the race was unexpectedly tight. The race also attracted gobs of out-of-state money as Brown and Buehler combined to spend a record $30 million.

In her post-election comments, Brown said her priorities in the next legislative session will be campaign finance reform, affordable housing and boosting Oregon’s low high school graduation rate, something Buehler poked at during the campaign. During her campaign, Brown announced a plan to incorporate federal clean air and clean water protections into Oregon law.

Other issues that will demand attention in the upcoming session include how to keep paying for Oregon’s Medicaid program, bolstering community mental health resources and improving child welfare programs.

There will be continuing pressure to address the unfunded liability of the Oregon Public Employees Retirement System and realign the state’s corporate tax system. It is unlikely remnants of the culture wars – immigration, abortion, transgender rights – will rear their heads in the legislature during the next two years.

A well-coordinated campaign apparatus consisting of labor, environment and progressive groups contributed to Brown’s re-election and the defeat of several ballot measures. Congresswoman Nancy Pelosi, expected to return as Speaker of the US House, credited a similar coordinated effort with the discipline and financing to regain control of the House and win governorships across the country, including in Trump country. 

Washington Initiative 1631, dubbed the Green New Deal, lost after large industrial corporations poured $31 million into a campaign to defeat it. If passed, I-1631 would have imposed a new carbon fee to fund conservation projects, renewable energy farms and struggling communities. The measure was endorsed by Governor Jay Inslee who called it “well-balanced, thoughtful policy.”