Knute Buehler

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.”

 

 

PERS: The Defining ‘Hot-Button’ Issue in the Governor’s Race

There have been grand bargains, court judgments, work groups, dire warnings, threats and inflated claims. Now there is a gubernatorial race that might turn on frustration over how to reform the Public Employees Retirement System. [Illustration Credit: Joan McGuire/Oregon Business]

There have been grand bargains, court judgments, work groups, dire warnings, threats and inflated claims. Now there is a gubernatorial race that might turn on frustration over how to reform the Public Employees Retirement System. [Illustration Credit: Joan McGuire/Oregon Business]

Ted Sickinger of The Oregonian has written a series of revealing articles about the Public Employees Retirement System (PERS), which his latest story calls the “defining issue” of the 2018 Oregon gubernatorial race.

Ted Sickinger is a long-time member of The Oregonian’s investigative team who has written extensively about the Oregon Public Employees Retirement Fund, from its arcane actuarial realities to the political firestorms it has ignited.  https://muckrack.com/ted-sickinger/articles .

Ted Sickinger is a long-time member of The Oregonian’s investigative team who has written extensively about the Oregon Public Employees Retirement Fund, from its arcane actuarial realities to the political firestorms it has ignited. https://muckrack.com/ted-sickinger/articles.

“Perhaps few issues more starkly delineate the views of Kate Brown and Knute Buehler in this fall’s gubernatorial election than Oregon’s public pension system,” Sickinger wrote. 

“Though PERS has been a hot-button issue in the state for decades, the political pressure may never have been higher,” he continued. “Schools, municipalities and government agencies are panicking as their required PERS contributions spiral to historic highs to help dig the system out of its $22 billion unfunded liability. There is no rescue in sight, and contribution rates are slated to jump again in July, pulling another $550 million a year out of public budgets statewide.”

Republican challenger Buehler has used the issue as a political club to criticize Governor Brown’s leadership. Brown has searched for ways to buy down the unfunded PERS liability and insists she won’t punish hardworking public employees. 

As Sickinger describes it, Buehler has promoted a set of PERS reforms closely paralleling those backed by Oregon’s business community. Brown dismisses Buehler’s “threats and bluster” and says she will concentrate on “actual solutions that solve the problem.” 

In reality, the window of possible changes isn’t very wide. “There is a limited menu of changes to the pension system considered economically meaningful and legally viable in light of past decisions by the Oregonian Supreme Court,” Sickinger says. “None would erase the pension deficit, though it is possible to make cost reductions that would help [public] employers.”

Sickinger walks through ideas on the table – public employee cost-sharing, which Oregon public employees already do, a $100,000 salary cap to limit large pension payouts and a transition to a 401(k) plan. 

Sickinger’s article touches on incentives and investments, including Brown-backed legislation to entice public employers to make an extra contribution to PERS and have the contributions matched by 25 cents on the dollar. Buehler calls the idea “political theater” with minimal impact on the unfunded liability.

Brown touts professional changes in the state treasurer’s office to achieve a higher rate of return. Buehler dismisses this, claiming the Oregon PERS portfolio has been one of the best performing funds in the nation.

Regardless of your politics or gubernatorial preference, Sickinger’s reporting on a major state issue is informative and cast illumination on claims, counter-claims and outright inaccuracies. 

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For starters, there were 145,963 Oregon PERS retirees through December 2017 – 127,687 of whom are considered Tier 1, the group with the most court-tested retirement benefits. Another 67,840 Oregon public employees are eligible to retire – 22,300 of whom are in Tier 1.

For the rest of the story, read Sickinger’s story, including a YouTube video on how Oregon got $22 billion in the hole.

 

How Oregon Might Look with a GOP Governor

Polls show the Oregon gubernatorial race is close enough heading into the November 6 election to wonder what a Republican governor in reliably blue-state Oregon would look like. (Photo Credit: E.J. Harris/East Oregonian)

Polls show the Oregon gubernatorial race is close enough heading into the November 6 election to wonder what a Republican governor in reliably blue-state Oregon would look like. (Photo Credit: E.J. Harris/East Oregonian)

Polls show the Oregon gubernatorial race is tighter than expected, at least by Democrats, and suggests it’s possible a Republican could capture the governor’s chair for the first time since 1978.

Buehler’s challenge to incumbent Governor Kate Brown is serious enough to ask what Oregon politics would look like if the state had a Republican governor while Democrats retained control of the Oregon House and Senate. Here are some thoughts:

Oregon Land Board

The three-member board that oversees state lands, from forests to submersible lands, would have two votes sympathetic to commercial interests – Governor Buehler and GOP Secretary of State Dennis Richardson. Some of Buehler’s biggest campaign contributors have come from leaders in the forest products industry, which could tip decisions in a different direction, such as the previously proposed sale of the Elliott State Forest.

Raising taxes and PERS

On the campaign trail, Buehler says he will block any tax increases until the legislature enacts cost-saving reforms to the Public Employees Retirement System. This has been a stand-off waiting to happen. Business interests – and more quietly school boards – would welcome this kind of pressure to force a compromise that reduces the unfunded PERS liability. A task force named by Brown spent months searching for ways to cut into the deficit and came away with a scant list of possibilities. Buehler may not fare any better, but he might bring fresh energy to the challenge.

State agency management

A Buehler victory would mean wholesale changes at the top of state agencies. Buehler has called out management lapses under Brown and he wouldn’t miss the chance to replace Brown appointees, especially since many Republicans may line up at his door seeking those jobs. 

Health care and human services

Under Democrats, Oregon carved out a niche in health care and long-term care delivery. These innovations have long enough roots that can’t be ripped out, but Buehler, who is a doctor, would covet the chance to put his own mark on Oregon’s health care system. He would likely face strong legislative opposition to Trump-like limitations on Medicaid and he might choose instead to focus on shoring up or even reinventing the state’s embattled child welfare system.

Homelessness

A politically opportune opening for Buehler would be combating the homelessness issue by significantly increasing community-based mental health resources, promoting innovative approaches to substance abuse and expanding options for victims of domestic abuse. In campaign ads, he has promised some “tough love,” which presumably means a coordinated effort to end camping in parks and on streets by providing more temporary shelters and affordable housing connected with services. Homelessness has emerged as a raw-nerve issue that has some urban Democrats weighing a vote against the incumbent they have supported in the past.

Redistricting

The quiet issue in the corner of this election is congressional and legislative redistricting, which will occur after the 2020 Census. GOP control of the governorship and secretary of state could give Republicans a bigger grip on how maps are redrawn. That could be especially significant if Oregon earns a sixth congressional district, which would be carved out of existing districts held by Democrats and potentially make one or more seats competitive in the 2022 election. Redistricting could also make a few House and Senate districts more competitive, making Democratic legislative control less a fait accompli. 

Legislative process
A Republican governor and Democratic legislative leaders could be like mixing oil and water. However, there has been a history in Oregon of bipartisan collaboration between moderate Republicans and Democrats. That is more likely if Buehler sticks to his moderate positioning and isn’t tempted to channel Trump policies on deregulation and tax policy. In fact, a Republican governor could be the galvanizing factor that breaks some logjams on policy issues in Salem by requiring bipartisan compromises.

Political Style
Brown has admitted she has a reserved, personable style that may not resonate with everyone, especially in the shadow of more flamboyant politicians, even though it has produced significant successes such as a higher minimum wage, major transportation funding package and a clean air initiative.

Buehler’s political persona isn’t over the top, but he has campaigned as a problem-solver willing to butt heads in Salem to get things done. His projection of himself as an action figure contrasts with the quieter approach of Brown and might be a better match for the political moment of this election, even if it results in inevitable public confrontations with Democratic legislative leaders in 2019.

 

Gubernatorial Slam Dunk May Not Be a Slam Dunk

A gubernatorial election in reliably blue Oregon in a midterm election with an activated Democratic base should be a slam dunk for a Democratic incumbent. However, the race so far seems anything but a slam dunk.

A gubernatorial election in reliably blue Oregon in a midterm election with an activated Democratic base should be a slam dunk for a Democratic incumbent. However, the race so far seems anything but a slam dunk.

It’s hard to watch television without seeing a barrage of spots touting or trashing Oregon’s gubernatorial candidates. Even the Washington Post has taken notice.

Oregon is considered a comfortably blue state with an urban, liberal corridor from Portland to Eugene that virtually guarantees Democrats victories in statewide elections. In a midterm election when Democratic activism seems to be surging, Oregon Governor Kate Brown’s re-election would seem like a political slam dunk. And yet, it may not be.

Brown faces a challenge from Knute Buehler, who swatted away more ideologically conservative competitors in the May primary and has positioned himself in the general election as a pro-choice, moderate Republican committed to solving the homeless crisis and improving health care.

Aided by business-backed Priority Oregon, Buehler is conducting the equivalent of saturation bombing on television, pummeling Brown for a “failing” state education system, numerous administrative missteps and weak leadership.

Brown has begun pushing back. She cites her leadership that preserved Oregon’s health plan for lower-income Oregon families. And she has taken a shot at Buehler’s legislative record on preserving Oregon’s health plan and attempting to reduce the price of prescription drugs. Planned Parenthood is running TV ads in support of Brown that challenge Buehler’s pro-choice claim.

Under the smoke of political gunfire, there is a palpable sense that Buehler is succeeding in Step One of any successful challenge to an incumbent – create doubt and someone to blame. Many people worry about low K-12 graduation rates, are disquieted by the growing specter of homelessness and tremble at rising drug prices. Buehler doesn’t exactly pin the blame for all that on Brown; he simply claims she isn’t doing enough to make a difference.

Step two in a successful incumbent challenge is to gain respect as a reasonable alternative. Tim Craig, national correspondent for the Washington Post, provides an interest anecdote suggesting Buehler may be making progress on Step Two.

“After handing out pamphlets touting his support for abortion rights and same-sex marriage, Knute Buehler stepped to the microphone at a recent campaign event and promised that ‘opportunity will ‘replace poverty’ and ‘hope will replace despair’ in the state. And if elected, Buehler added, he would govern with an ‘open mind and a caring heart.’”

“As Buehler spoke in this working-class Portland neighborhood, Rachelle Dixon slipped into the audience, frequently nodding her approval. That was notable, considering that Dixon is the vice chairwoman of the Multnomah County Democrats, in a year in which Democrats hope to punish Republicans up and down the ballot because of disillusionment with President Trump.’

“There are Republicans I know for sure, ‘I would never vote for this person,’ said Dixon, 51. ‘But when I look at this man and his voting record, I don’t say, ‘Gosh, I’d be scared to be in the room with this guy.’”

Not exactly an endorsement, but also not the kind of rebuke you might expect from a Democratic partisan. 

A robust state economy, with a low unemployment rate, would ordinarily be a major selling point for an incumbent governor. However, Brown hasn’t tried to take credit for the good economic times. 

Buehler hasn’t, at least so far, made the economy a major theme in his challenge, even though it’s clear state business leaders smell blood and are salivating at the chance to have a Republican occupy the governor’s chair in Oregon for the first time since Vic Atiyeh left the office in 1987. Nike founder Phil Knight has reportedly contributed a total of $1.5 million to Buehler’s gubernatorial campaign.

Buehler’s election is far from certain – and possibly not plausible amid the turmoil that has ripped the GOP into pro-Trump and anti-Trump camps. Buehler has tried to steer clear of the wreckage, but that may grow more difficult as the November election approaches, exposés about the White House continue to surface and additional indictments are handed down. 

Brown faces her own intra-party challenges. As witnessed in primary elections in New York and last week in Massachusetts, the progressive wing of the Democratic party has unseated long-time Democratic incumbents with solid records and seniority. Restive progressives expressed impatience with what they called the status quo. Brown could suffer some of that same political fatigue.

The Brown campaign does appear to understand it is in an unexpected political dogfight, especially considering the state’s gaping Democratic registered voter edge. Like an experienced political incumbent, Brown has begun to raise doubts about Buehler, who is still trying to boost his voter recognition. She challenges his pro-choice bona fides and warns that “progressive voter values” could be at risk if Buehler wins.

“All the progressive work we have done, from minimum wage to women’s reproductive health to racial justice issues, will grind to a halt if my opponent gets elected,” Brown is quoted as saying in the Washington Post article.

Political observers suggest Brown has conceded Republican strongholds in Eastern and Southern Oregon and will rely on retaining Democratic votes in the Willamette Valley. That accounts for why Buehler and his supporters have zeroed in on issues of concern to urban voters such as homelessness, drug prices and abortion rights.

By all accounts, it is Brown’s race to lose. Those are always dangerous races to run.

Brown to Face Buehler in November

State Rep. Knute Buehler overcame more conservative GOP candidates to win the right to challenge incumbent Democratic Governor Kate Brown this fall in what could emerge as a marquee matchup this fall when a “Blue Wave” is anticipated nationally in the mid-term election after Donald Trump’s captured the White House in 2016.

State Rep. Knute Buehler overcame more conservative GOP candidates to win the right to challenge incumbent Democratic Governor Kate Brown this fall in what could emerge as a marquee matchup this fall when a “Blue Wave” is anticipated nationally in the mid-term election after Donald Trump’s captured the White House in 2016.

Oregon’s primary election didn’t excite voters as reflected by historically low turnout, but it did set the stage for what could be engaging contests in November.

Knute Buehler overcame a handful of more conservative GOP candidates to grab the Republican gubernatorial nomination, giving him a chance to carry on his vigorous campaign to unseat incumbent Democratic Governor Kate Brown.

Both wasted little time launching their general election campaigns. Before the votes were tallied Tuesday, Brown called for three formal debates and urged as many joint appearances as possible hosted by media outlets. Buehler scheduled a press conference Wednesday morning at the headquarters of Portland Public Schools to lambast a teachers’ union for “protecting a predator” who allegedly abused children and was transferred from school to school.

JoAnn Hardesty and Loretta Smith face a runoff in the fall for a Portland City Commission position, ensuring the election of the first African-American woman on the council.

Metro Councilor Kathryn Harrington and Bob Terry will vie in November for the Washington County chair position. Terry is currently the Commission’s vice chair. Former lawmaker Ryan Deckert, whom some observers saw as the frontrunner, finished third in Tuesday’s voting.

All five Oregon congressional incumbents easily won their largely ceremonial primary contests. None seem in trouble in the general election, though Republican Congressman Greg Walden may face a spirited challenge from Jamie McLeod-Skinner, who defeated six other Democratic candidates to win the chance to poke at Walden for his support of Trump administration policies. Oregon Democrats have set up a website called “Repeal Walden,” a gibe at his leading role in the failed congressional attempt to repeal Obamacare.

Some races were settled in Tuesday’s voting. Shemia Fagan unseated five-term Democratic Senator Rod Monroe in a race that centered on affordable housing policies. With no Republican on the ballot in the East Portland Senate district, Fagan is basically a shoo-in this fall and will help tilt the Senate Democratic Caucus more to the left.

Former Eugene lawmaker Val Hoyle defeated long-time Tualatin Mayor Lou Ogden to win the Oregon Labor Commissioner post, replacing Brad Avakian who didn’t seek re-election. Hoyle previously lost in her bid to become secretary of state, but now will become only the second woman to hold the Labor position in the 115-year history of the Bureau of Labor and Industries.

Lynn Peterson, a transportation planner and former chair of the Clackamas County Commission, cruised to an easy victory to become Metro president, replacing Tom Hughes who has served the maximum of two terms in the post. Nonprofit executive Juan Carlos Gonzalez received 55 percent of the vote to capture the Metro Council representing the western part of urbanized Washington County that Harrington has represented.

Kevin Barton handily defeated Max Wall for Washington County district attorney in what was one of the more visible local races. Barton, who is chief deputy district attorney, withstood a barrage of TV advertising from Wall, a former Polk County prosecutor and now a Beaverton criminal defense attorney. Election filings show the two candidates raised and spent around $900,000 in the campaign.

Pam Treece, executive director of the Westside Economic Alliance, defeated incumbent Washington County Commissioner Greg Malinowski. Former Hillsboro Mayor Jerry Willey won the Commission seat vacated by Terry.

Senate President Peter Courtney easily shrugged off a primary challenge, the first in a decade. Democrats hope to pick up a pivotal 18th Senate seat in Southern Oregon is a district where GOP Senator Alan DeBoer chose not to seek re-election. They also hope they can capture the Hood River House seat previously held by Rep. Mark Johnson who resigned to head the newly merged Oregon Business & Industry.

Oregon was one of four states holding a primary election Tuesday. Voting in Pennsylvania was marked by the primary victories of left-leaning candidates, including two members of the Democratic Socialists of America who won nominations in two Pittsburgh congressional districts. All of Pennsylvania’s 20 House seats are held by males, but that is expected to change with as many as four seats up for grabs for female candidates.

In Idaho, Democrat Paulette Jordan defeated an establishment candidate, running on a platform of protecting public lands, Medicaid expansion and relaxed marijuana laws. If Jordan prevails in November, she would be the state’s first Native American governor.

National Democrats are hailing Tuesday’s voting, noting larger turnouts and more voter enthusiasm for its candidates. The result of the voting, however, only produced one House Democratic gain in a special Pennsylvania congressional election.

Buehler Amps Up His Incumbent Challenge

Bend Republican Knute Buehler casts himself as the best GOP hope to unseat Democratic incumbent Governor Kate Brown, but he will have to overcome political conservatives in his own party in Tuesday’s Oregon primary election to get the chance to test Brown this fall. [Photo Credit: AP]

Bend Republican Knute Buehler casts himself as the best GOP hope to unseat Democratic incumbent Governor Kate Brown, but he will have to overcome political conservatives in his own party in Tuesday’s Oregon primary election to get the chance to test Brown this fall. [Photo Credit: AP]

The classic way for a challenger to take down an incumbent is to 1) raise doubts about the incumbent’s performance and 2) position yourself as a preferred alternative.

Rep. Knute Buehler (R-Bend), the presumptive front-running GOP gubernatorial challenger, has been taking whacks at Governor Kate Brown for months and insisting he could do better. But his political challenge runs deeper. Buehler has to prove in next week’s GOP primary that he is a more attractive candidate than his more politically conservative fellow Republicans.

Buehler has raised and spent vastly more money than his GOP competitors, called out one opponent for having 21 tax liens against him and generally avoided mixing it up with fellow candidates in the hustings. This week, Buehler came up with a new tactic: a dress rehearsal for GOP voters on how he would campaign against Brown if he wins the GOP nomination.

Buehler tried to upstage Brown at her media event in Eugene to tout her support for improved foster care in Oregon. Buehler, who has been a fierce critic of Brown’s leadership on foster care, scheduled his own media event at the same location, blasted Brown’s performance and recalled his legislative proposal to increase spending on foster care in Oregon by $50 million.

The political troll of Brown was itself a prime example of what challengers have to do to unseat incumbents. But the timing and intensity of Buehler’s media event was probably intended to impress undecided GOP voters that the Bend Republican will do more than recite conservative doctrine if he is the Republican who wins the job.

Buehler has taken pains to create a political image outside the shadow of Donald Trump on the fairly safe grounds that Oregon is anything but Trump-friendly. His purported variance from conservative orthodoxy, including on emotion-charged issues such as abortion, haven’t necessarily swayed a segment of Oregon’s conservative political base. That’s why Oregon Right to Life threw its support behind Sam Carpenter, the opponent Buehler pointed out who has all those tax liens.

Since primary elections in Oregon and generally are bastions for the partisan faithful, Buehler could wind up next Tuesday as the candidate with the best chance to test Brown, but who can’t win his own primary. His best hope is to convince Republicans that having a chance to win in November is more rewarding than basking in the defeat of a political moderate in May.

His struggle to convince GOP conservatives was evident when he barely squeaked out a victory in a straw ballot among generally more moderate Washington County Republicans. It should be noted that only 75 Republicans showed up for the unusual pre-primary event.

And that’s the problem with the formula for defeating incumbents. It takes one more element to pull off the upset. After beating up the incumbent and touting your own competence, you need to make sure voter turnout favors your candidacy. That may not be the case on Tuesday for Buehler.

In what is viewed as a lackluster primary, turnout could be relatively low, which could mean a higher percentage of bedrock conservative voters. Much of Buehler’s general election appeal is to the growing group of non-affiliated Oregon voters. Unfortunately for Buehler, independent voters won’t get the chance to weigh in his primary gubernatorial bid.

Meanwhile, Brown faces only token opposition in the Democratic primary and will enter the general election with her campaign war chest intact and robust. Buehler may represent her toughest opponent, but only if he earns the GOP nomination on Tuesday.

 

2018 Oregon General Election Could Be Dark and Spicy

Oregon has prided itself on polite politics and transparent campaign finance. But that reputation could be tested in this election cycle with bruising political battles and a rise of dark money financing for ballot measures.

Oregon has prided itself on polite politics and transparent campaign finance. But that reputation could be tested in this election cycle with bruising political battles and a rise of dark money financing for ballot measures.

Oregon has a reputation for polite, transparent politics. That reputation may change in this election cycle because of “hardball tactics” by Priority Oregon, a pro-business organization committed to challenging the hegemony of Democrats in the state.

Formed a year ago, Priority Oregon entered the political field by opposing efforts by legislators in 2017 to craft a gross receipts tax that would have assessed businesses on sales versus profits. Now it is spearheading four initiatives that take aim at unions, state spending and legislative approval of tax increases.

OPB’s Jeff Mapes has reported business lobbyists describing Priority Oregon as “designed to take a more hard-nosed approach to politics, unencumbered by the mainstream business community’s need to maintain ties to the Democrats who largely run state government.” Priority Oregon’s task is apparently not to make nice with Democrats.

So far, Priority Oregon also isn’t making it clear who is funding its political activities. In his story, Mapes said, “While sharpening its rhetoric, the group seems to be protecting its backers from any blowback.”

So-called dark money is no stranger to politics, but isn’t common in Oregon, where public disclosure is the rule and the routine practice. Erica Hetfeld, who is heading Priority Oregon, has promised the group will be more visible this election cycle, but not necessarily more transparent. Priority Oregon was established as a nonprofit 501(c)(4) entity that is allowed to engage in public activities without the same disclosure requirements as a political action committee.

Financial disclosure forms filed with the Elections Division indicate the Oregon Farm Bureau, Associated Oregon Loggers and Automobile Dealers Association of Portland have contributed to political action committees aligned with Priority Oregon-backed ballot measures, which are collecting signatures. Initiative backers must turn in the required number of signatures by July 6 to qualify for the November Oregon general election ballot.

Political Action Committees supporting Initiative Petition 31, which would require legislative supermajorities for any state tax revenue increases, and several other petitions (IP 34, 36 and 33), have collectively spent $146,000 during this election cycle with Ballot Access, LLC to collect signatures, according to state records.

Initiative Petition 34, which would make Oregon a right-to-work state, seems relatively quiet awaiting a ruling by the US Supreme Court in the matter of Janus v. AFSCME. The court heard arguments February 26 on the potentially precedent-splintering case. If that decision results in a victory for Union supporters, you can expect fundraising and advocacy to increase.

Initiative Petition 36 would create a state government spending limit and require excess revenue to reduce the Public Employees Retirement System unfunded liability. 

Another major effort expected on the ballot in November, Initiative Petition 37 would ban a tax on groceries.  IP 37, as you might imagine, has attracted substantial financial support from major grocers like Costco and Albertsons-Safeway. In addition, it's spent over $300,000 for petition signature gatherers and management support from conservative firm Morning in America since December of 2017.

More rough-and-tumble politics also is expected in the gubernatorial race. Democratic Governor Kate Brown is running for a full 4-year term and may face Republican Knute Buehler who has positioned himself as a politically moderate alternative. Like a running back on a bad football team, Buehler’s biggest challenge may be getting past the line of scrimmage in the GOP primary that often is dominated by more conservative voters. While Buehler has raised more campaign funds than his conservative fellow candidates, their views may be more in line with current thinking within the Republican Party.

There is an interesting twist to Buehler’s campaign. Rebecca Tweed, his campaign manager, also runs Grow Oregon, which major business leaders created in 2012 to counter the success of Our Oregon, a union-backed political group that advocates for tax hikes in the name of economic and social fairness. Grow Oregon and Our Oregon are both nonprofits, not PACs. Before leaving for Priority Oregon, Hetfeld was director of Grow Oregon.

It is a recipe for a ripe family feud with plenty of money spread around to make a lot of noise. Toss in a few additional spicy ballot measures that are circulating for signatures and you could have one of the hottest elections in some time. Some of the measures in circulation include restoring legislative term limits, requiring publicly traded corporations to disclose their state taxes, requiring proof of citizenship to vote and repeal of Oregon’s sanctuary state law.

 

A Look at the Relatively Quiet Oregon Gubernatorial Race

Oregon’s 2018 gubernatorial election has been relatively quiet so far, with Governor Kate Brown biding her time until the fall general election and front-running GOP challenger Knute Buehler trying to find a way to win the primary without getting beaten up on the campaign trail.

Oregon’s 2018 gubernatorial election has been relatively quiet so far, with Governor Kate Brown biding her time until the fall general election and front-running GOP challenger Knute Buehler trying to find a way to win the primary without getting beaten up on the campaign trail.

Oregon’s gubernatorial race continues to be a low-key affair with the election now just six weeks away and ballots due to arrive in mailboxes before then.

Democratic Governor Kate Brown doesn’t face any credible primary opposition and seems to be waiting to see who Oregon Republicans will choose to face her in the fall general election.

Rep. Knute Buehler from Bend has raised the most money among GOP candidates and struck a moderate political posture on abortion and guns, making him potentially a strong candidate to woo independent and alienated Democratic voters in November. However, Buehler, an orthopedic surgeon, has to win the May 15 primary against more right-leaning opponents, including former Blue Angels Commander Greg Wooldridge, who has been endorsed by Oregon Right to Life, and Bend businessman Sam Carpenter, who is an unapologetic supporter of President Trump.

The annual Republican Dorchester Conference straw ballot early in March favored Wooldridge over Buehler. Buehler downplayed the result, saying he had little time to mix and mingle with Dorchester conferees because he was in Salem for the short Oregon legislative session that adjourned just when the conference was beginning. Others viewed Buehler’s loss as his weakness with what have come to be called Trump voters.

Since then, Oregon Public Broadcasting reports Buehler has skipped several candidate forums attended by his GOP gubernatorial rivals, which has raised questions. “People are asking why. You know, it’s peculiar,” Baker County GOP Chairwoman Suzan Ellis Jones told OPB. Wooldridge’s campaign team has been blunter. “What is he hiding from. If he’s not willing to meet people face-to-face, I’m not sure he’s really ready to represent the people of Oregon,” said Russ Walker, a Woolridge campaign strategist.

There are 10 Republicans vying to take on Brown. Buehler has reported a campaign war chest of more than $3 million, while Wooldridge and Carpenter are the only other two hopefuls who have raised more than $100,000. Nobody’s campaign has taken to the airwaves so far.

Buehler is betting his experience serving two terms in the Oregon legislature, fundraising connections and moderate policy positions on reproductive rights and gun control will convince Republicans that he is the only GOP candidate with a chance to defeat Brown and become the first Republican since Vic Atiyeh to sit in the governor’s chair. Most of Buehler’s statements have come in the form of criticizing Brown.

Buehler reportedly bypassed challenging Brown in 2016, when she ran to fill the remaining two years of former Governor John Kitzhaber’s fourth term, because Democratic turnout was expected to be high in a presidential election year. However, 2018 may not be all that different as Democrats have energized their political base in response to actions by Trump, such as undermining Obamacare, challenging legalization of marijuana and dismantling environmental regulations. The Trump tax plan that will limit federal tax deductions for state and local taxes and Trump’s tariffs on trade with China have irritated upper-income Oregonians and alarmed farmers. Trump’s overall favorability rating in Oregon hovers below 40 percent.

Voters along the I-5 corridor from Eugene to Portland are reliably Democratic, but there will likely be more Democratic electoral efforts in rural Oregon aimed at Greg Walden, Oregon’s lone GOP congressman. The Republican gubernatorial nominee, whoever it is, may be forced to spend time and resources to defend the Red State part of Oregon.

In the general election, Brown will be attacked as a weak leader who has presided over state agency foul-ups and resulted in a fairly high turnover rate of agency leaders. Brown will cite her leadership in a major transportation funding measure, a hike in the state minimum wage and create of a state-sponsored retirement savings plan.

Buehler probably will need to dig into his campaign fund to raise his visibility before the primary, while Brown probably will hold off any major media outreach until the general election campaign is underway. She has the luxury of using the next few months to bolster her $3.2 million campaign bank account.

That means for now, Oregonians can enjoy the relative quietude of the gubernatorial race. It promises to get a lot noisier and nastier.

 

Lawmakers Still Puzzling over Purpose of Short Session

The 2018 Oregon legislative short session is over, but lawmakers are still trying to figure out how to use the even-year session fruitfully amid its unavoidable frenetic pace

The 2018 Oregon legislative short session is over, but lawmakers are still trying to figure out how to use the even-year session fruitfully amid its unavoidable frenetic pace

Oregon lawmakers continue to struggle to find the right mix for the short, even-year legislative session. They adjourned last Saturday after leaving a much-ballyhooed cap-and-invest bill sitting in committee along with a constitutional amendment to treat health care as a right.

Yet, lawmakers did notch notable accomplishments by tightening gun restrictions on domestic abusers, updating the state’s advance directives statute, requiring more transparency on drug pricing and changing the governance structure of Salem-Keizer Transit in return for future access to a local payroll tax.

And lawmakers didn’t totally avoid controversy. With largely Democratic votes, the legislature approved a bill that disconnected from the recently adopted federal tax cut to prevent Oregon small businesses from taking advantage of a previous Oregon tax concession and a new lower 20 percent federal tax rate. There were rumblings Governor Kate Brown might veto the state tax measure, which drew strong opposition from business groups.

The short session also served as a shadow boxing venue for Brown, who is seeking re-election this fall, and her most prominent GOP challenger, Rep. Knute Buehler of Bend. During the session, Buehler laid out his planks of his campaign platform, such as additional investments in child welfare and taking stronger measures to curb the opioid epidemic in Oregon. Brown responded by asking for $14.5 million more for child welfare case workers and pushing her own priority opioid measure.

The shadow boxing hasn’t stopped with legislative adjournment. Buehler called on Brown to veto the Democratic tax bill scrapping a small business tax break. If Brown vetoes the legislation, Buehler will claim credit. If she doesn’t veto the bill, he will condemn her for denying a tax break to small businesses.

The short session was shorter than the 35 days constitutionally allowed. Republicans wanted to head to the beach for the annual Dorchester Conference. Others sped north on the freeway to attend a retirement roast for veteran homebuilder lobbyist and stand-up comic Jon Chandler. Still others braced for filing deadline Tuesday.

As predicted after Senate Democrats hoisted the white flag on cap-and-invest legislation before the short session started, there wasn’t a lot of drama in the Capitol hallways. There was a lot of pressure, however. Short sessions resemble the flurry typical in the last month of a regular legislative session. One lawmaker observed, “In a regular session, there are deadlines followed by time to get work done. In the short session, there are just deadlines.”

Perhaps notwithstanding Brown’s potential veto of tax legislation, GOP Senator Brian Boquist is entertaining a legal challenge clarifying what legislation is truly a “revenue raiser” and on whether a measure to disconnect from the federal tax code that generates new revenue can be approved without a three-fifths majority vote.

In all likelihood, the dawning of primary election season will overshadow what did or didn’t happen in the short session. The primary will be held May 15, which is less than 10 weeks from now – plenty of time for campaign coffees, lawn signs and mailers.

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Dale Penn II is a partner and leader of the CFM’s state affairs team. He has been deeply involved in government relations and regulatory affairs in Oregon for more than 12 years and was active on behalf of a range of clients in the 2018 Oregon legislative session.

 

Short 2018 Session May Have Less Drama

No single issue is likely to dominate the Oregon 2018 legislative session that begins Monday, but lawmakers will still be busy with issues ranging from reconnecting to the federal tax code to gun restrictions. And there will be some political jockeying in advance of the Oregon primary in May and general election this fall.

No single issue is likely to dominate the Oregon 2018 legislative session that begins Monday, but lawmakers will still be busy with issues ranging from reconnecting to the federal tax code to gun restrictions. And there will be some political jockeying in advance of the Oregon primary in May and general election this fall.

Voter approval of Measure 101 and Senate Democratic cold water on cap-and-invest legislation may remove much of the anticipated drama at the 2018 Oregon legislative session, which convenes Monday. Of course, any legislative session during an election year can have outsized political tensions.

Without a focus on patching a big budget hole or trying to thread the needle for a compromise on cap-and-invest provisions, there isn’t an apparent single issue that will dominate the session with an adjournment deadline of March 11.

One of the sleeper bills likely to draw attention is legislation to connect Oregon’s personal and corporate income tax system with federal tax changes enacted by Congress late last year. Oregon lawmakers have tended to favor connecting Oregon’s tax provisions with their federal counterparts for the ease of taxpayer filing. But there may be other considerations this time around, including how the new federal limitation on state and local tax deductions will affect Oregon taxpayers.

The Oregon business community wants to see substantial progress on reducing the unfunded liability of the Public Employees Retirement System, but that appears unlikely in the short 2018 session and during an election year. Governor Brown will ask lawmakers to create an Employer Incentive Fund to provide matching money for public employers that accelerate their contributions to PERS. The pressure to act also was relieved by the Oregon State Treasury’s announcement that the PERS fund posted a 15.3 percent gain in 2017, which is good news, but not enough to stem rising costs.

Other priorities for Brown in the short session include a measure to encourage construction industry startups in rural areas that can access low-rate loans from Business Oregon to build affordable housing. Licensing requirements also would be relaxed and grants would be available to defray the costs of apprentices.

Brown wants all licensed opioid prescribers in Oregon to register with a Prescription Drug Monitoring Program to generate information about opioid use and identify illegal prescribers. Her proposal also would provide for mentors in emergency departments to counsel people who have overdosed.

Another Brown priority is to create a reverse auction for state procurement as a way to squeeze more value and less cost for state expenditures. Her concept is to generate more competition among state vendors who benefit from the $8 billion Brown says state agencies spend every biennium. 

The governor is seeking a bill to prohibit people convicted of domestic violence or stalking from purchasing firearms. Oregon lawmakers approved legislation last year to empower courts to order the confiscation of guns owned by people deemed at risk of suicide or hurting others.

Passage of Measure 101, which secures funding for Oregon’s Medicaid program through this biennium, prompted Rep. Mitch Greenlick, D-Portland, to propose a constitutional amendment that declares health care is a right of every Oregonian. He has attracted 40 cosponsors for his referral that would appear on November 2018 general election ballot.

Likely GOP gubernatorial frontrunner Knute Buehler, R-Bend, is pushing legislation to force coordinated care organizations to repay up to $74 million in Medicaid overpayments and address transparency and management issues by the Oregon Health Authority. Buehler has called for bipartisan action, but his measure will invariably have a vapor trail of politics following it.

Some familiar legislative faces will be missing. Long-time Senate Minority Leader Ted Ferrioli and Senator Richard Devlin, the Democrat’s budget guru, have moved on to appointed posts on the Northwest Power Council. Cliff Bentz, who has served in the Oregon House since the 2009 session, assumed Ferrioli’s seat and Senator Jackie Winters was chosen to succeed Ferrioli as minority leader. Rob Wagner, a Lake Oswego School Board member, was appointed to fill Devlin’s seat.

PERS Task Force Ideas Fall Short of Brown’s Goal

The task force appointed by Governor Brown will submit its suggestions soon to shrink the Oregon PERS unfunded liability, but during the time the task force met the liability hole grew bigger.  Photo Credit: The Oregonian

The task force appointed by Governor Brown will submit its suggestions soon to shrink the Oregon PERS unfunded liability, but during the time the task force met the liability hole grew bigger.

Photo Credit: The Oregonian

The task force named last May by Governor Brown to identify ways to slice the unfunded liability of PERS will soon submit its ideas, but don’t expect them to be easy to implement or add up to the $5 billion goal Brown set.

One of the most promising concepts floated by the task force emerged at its last meeting and doesn’t have anything to do with selling surplus state property or imposing fees here and there. That idea involves an incentive structure to the 900 or so PERS employers to increase their contributions to pay down the unfunded liability.

None of the ideas coming from the task force could be described as a slam dunk.

  • Imposing an additional tax on PERS retirees receiving more than $60,000 annually in benefits (likely to face an uphill court battle);
  • Increasing permit and fee prices (likely politically feasible, but the amount of money it raises would be minimal); and
  • Transferring some of the $1.6 billion surplus in the State Accident Insurance Fund (a possibility, but it is unclear how much of the surplus could be transferred without adversely affecting SAIF).

Complicating the exercise, the PERS board in July lowered the assumed rate of return on investments, which had the effect of increasing the unfunded liability by another $2.4 billion to almost $25 billion. Business interests pushing for PERS reforms said the investment rate change “unmasked the severity of the problem.” PERS employers, which include school districts, will be expected to pay an additional $900 million over the next two years.

As reported by The Oregonian’s Ted Sickinger, Brown’s 7-member task force, which has met four times, looked under state seat cushions for spare change to shrink the PERS unfunded liability without directly addressing PERS benefits. The search included selling surplus properties, privatizing state agencies and putting a surcharge on liquor sales. None of those ideas gained much traction in task force deliberations.

In the absence of a silver bullet idea, task force members privately said the sum total of their ideas might only reach around $1 billion, far short of Brown’s goal. Even $1 billion may be difficult to achieve since the task force is submitting suggestions, not recommendations by its November 1 deadline. The suggested incentive to PERS employers to increase contributions to qualify for some sort of state matching funds may wind up attracting the most interest, though it would require lawmakers to scratch together the state revenue to provide matching funds.

There is little doubt the PERS unfunded liability will be a major issue in the 2018 gubernatorial election. GOP frontrunner Knute Buehler regularly criticizes Brown for her failure to offer ideas on how to address the PERS liability and put state budgeting on a sustainable basis.

Majority legislative Democrats, supported by Brown, appear poised to push cap-and-invest legislation in the short 2018 session that begins in February, which could generate an additional $1.4 billion in state revenue. Legislative Counsel has opined that the cap-and-invest measure is not a tax and therefore doesn’t require of a three-fifths majority to pass in the House and Senate.

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Zack Reeves is a state affairs associate who represents CFM clients in the Oregon legislature. He began working as a legislative staffer in 2011 and has developed a wide range of contacts and experience on a broad spectrum of legislation. Before politics, Zack worked as a reporter and copy editor.

More Fuel for Oregon Revenue Debate

Oregon public schools received a substantial boost in revenue this year, but not enough to avoid teacher cutbacks and larger class sizes in the shadow of rising pension payments, which will add more fuel to the already raging debate over raising corporate taxes and changing the Public Employees Retirement System.

Oregon public schools received a substantial boost in revenue this year, but not enough to avoid teacher cutbacks and larger class sizes in the shadow of rising pension payments, which will add more fuel to the already raging debate over raising corporate taxes and changing the Public Employees Retirement System.

Oregon public schools are receiving more state funding, but a significant chunk of the increase is going to pay for teacher pensions, not teachers in classrooms. The situation will add fuel to both sides of the debate over the need for additional tax revenue.

School advocates will say it is proof more revenue is needed to cover the costs of public education. Business leaders will say it underscores the need to make changes in the Public Employees Retirement System.

The Oregonians’ Gordon Friedman filed a story indicating Oregon’s public schools will receive $400 million more than in previous years. But the bump is not enough, school officials contend, to avoid teacher layoffs, larger class sizes and program cutbacks.

Friedman provides specific examples:

  • Portland Public Schools will receive a $29 million funding boost, but $18 million of that increase will go for pensions and higher salaries. The district will employ 55 fewer teachers in its 77 schools this fall.
  • Salem-Keizer School District will get $31 million more, but its pension costs will rise by $10 million, resulting in 67 teaching positions being axed.
  • Beaverton School District will see a $21 million increase, but its pension cost will balloon by $14 million. Its budget-balancing challenge is aggravated by the opening of a new high schools. The District has elected to trim library staff, professional development and classroom supplies.

School officials expect more of the same in the next school year, even though the legislatively approved $8.2 billion K-12 budget a represents an 11 percent increase over the previous biennium. Legislative fiscal analysts predicted the $8.2 billion budget, which included an estimate of pension costs rising by 45 percent, should have been adequate. School officials disagreed and said $8.4 billion was needed to maintain the status quo in their local district budgets.

Specific numbers aside, the specter of a larger budget for K-12 schools and continuing teacher and programmatic cutbacks is the stuff that will further animate the debate over corporate taxation and PERS spending reductions. You get the flavor of the debate by how school advocates refer to corporate tax reform and business groups demand PERS reform.

There isn’t going to be any respite from having that debate continue before the Oregon legislature convenes for a short session early next year. There are two huge drivers of the conversation:

  • The Oregon Education Association is pushing an initiative to raise corporate taxation – a so-called Measure 97 light. The teacher union was forced to withdraw its initial ballot measure because of a constitutional question, but it has pledged to refile a corrected version. If it qualifies for the ballot, Oregon voters would decide its fate in the November 2018 general election.
  • Rep. Julie Parrish, R-West Linn, is pursuing a referral of the legislatively approved Medicaid funding package, which she calls a sales tax on health care. Because of controversial legislation approved in the 2017 session, voters would decide on whether to toss the tax package in a special election next January, just before lawmakers return to Salem.

The OEA-backed initiative will cause combatants to return to their political trenches and prepare for another expensive campaign. The prospect of a Medicaid tax referral has already splintered the business community, especially in the health care sector.

There have been calls for a legislative special session this fall to work out a compromise. Some school officials say the school funding issue is serious enough to act now, not wait until 2019. Newly declared GOP gubernatorial candidate Knute Buehler urged a special session to ”improve” the state’s Medicaid program, most likely in the form of ensuring that ineligible enrollees are removed.

The stakes are obviously high. If voters strike down the Medicaid tax package, lawmakers will once again face a massive budget hole. The net effect would be to turn the K-12 school budget-corporate tax debate into a three-way slugfest.

Hope isn’t high for a grand bargain to resolve this festering issue. The operating assumption of the moment is that a work group needs to be formed, statewide listening sessions held and compromises considered on corporate tax changes – a model that worked to produce a major transportation funding package that won legislative approval and won’t face a referral, as previous measures have. This process wouldn’t fully unfold until the 2019 legislative session – and after the 2018 general election and potentially a vote on the OEA tax initiative.

Without leaderships and a clear focus on an alternative, Oregonians can expect a lot of shoving and pushing – and apparently more teacher layoffs.