08 Aug

One more dead end for revenue reform suggests a different route

It took 10 years of legislative effort, Mark Hass points out, to get Oregon to a policy of full-day kindergarten.

So, the Beaverton state senator insists, to have another legislative session slip by without revenue reform is no cause for despair.

Still, like a kindergartener who keeps eating the crayons, it’s not exactly encouraging.
For decades, one of the rituals of the opening of the Oregon legislature, along with electing leaders and assigning parking spaces, has been the announcement of the difference between what the state expects to collect and what it would cost to keep doing what it’s been doing. The egislature then has six months, calling on luck, imagination and occasionally skill, to make up the difference – although over the years of the legislature’s maneuvers, Oregon schools have also seen a widening difference between the school programs and class sizes the state used to have and what it manages to finance now.

Not to say fewer crayons.

This past session, Hass, chairman of the Senate Finance and Revenue Committee, and the leadership across the building in the House set out to make revenue reform happen. There were large Democratic majorities, if not quite supermajorities; unhappy memories on all sides of last fall’s multi-multi-million-dollar initiative battle over the business receipts tax Measure 97; and, as usual, a budget shortfall, this time estimated at $1.6 billion.

And, as usual, revenue reform didn’t happen.

There are limited places that more state revenue could come from. Oregon’s personal income tax is already at nosebleed levels, paying for virtually all the state budget – with the help of a vital, let’s-not-talk-about-it pipeline from the state’s jingling video poker machines.

Initiative measures of the 1990s constitutionally cut property taxes without replacing the money, giving Oregon shortfalls ever since.

Sales tax? Wash your mouth out with soap.

That leaves a business tax – and businesses, Hass points out, have gone from covering 18 percent of the state budget in the 1990s to paying 6 percent today.

During the Measure 97 battle last fall, there were hints that if voters defeated its sizable gross receipts tax, there might be interest in a more moderate version. Rep. Barbara Smith Warner, D-Portland, of the House Revenue Committee, points out that in Ohio, a similar tax – at a considerably lower rate than Measure 97 – was enacted by a Republican legislature and a Republican governor.

But when the legislature gathered, all that anyone remembered was the bitterness of the initiative fight, and who won.

“The reason we had so much opposition,” says Hass, “was the hangover from Measure 97.”

Of course, the winter was a time of other weirdness. Smith Warner recalls, “The Trump election threw everything into disarray,” and in the legislature it doesn’t take much to achieve that.

And the legislature did have other things on its mind. It passed a provider tax to bolster the Oregon Health Plan (and keep the federal dollars flowing), and an $8 billion transportation tax and investment package – something that the legislature has been trying to do for years, or even longer than it takes to get across the Interstate Bridge. Crucially, the package managed to get the necessary Republican support.

And the legislature once again managed to close up the budget gap and get out of the building, a tactic involving some cuts, some rearrangements, and a better-than-expected revenue forecast, the legislature’s version of Batman’s utility belt. So the state’s fiscal problem is resolved – until the shortfall forecast before the next legislature.

At the end of the session last month, House Speaker Tina Kotek, D-Portland, declared, “We fought like hell to get to a long-term budget deal so we could finally stabilize our finances and make meaningful investments in Oregon’s schools. We couldn’t get it done, but we did lay the groundwork for success in 2019” – but it’s not clear just why the prospects would look better then.

Still, the 2017 legislature did manage the major transportation package, which could be an inspiration – and maybe a model.

“In 2015, the legislature fumbled the bill over a transportation tax. So we started a process, a task force holding hearings around the state,” points out Hass.

We could do that again. I’m happy to do it that way.”

That approach still might not work. Revenue reform has a long tradition of not working in Oregon, and there’s a good chance of more initiative measures next November, to redraw the angry lines and pump money into the cash registers of television stations.

But the early launching of an effort seems a minimal requirement for a reform drive that might succeed. Because one thing we’ve learned over a quarter-century is that this problem can’t be solved in the last weeks of a legislative session.

You end up with a strategy written in crayon.

NOTE: This columnn appeared in the Sunday Oregonian, 8/2/17.

08 Aug

Oregon dismay at GOP health care bill loud enough to hear in D.C.

BEAVERTON – In a giant jammed gymnasium, stuffed full of Oregonians drawn to a town hall by the prospect of Congress dismantling health care, questioners rarely asked about the actual bill, the one that seemed to be slowly decomposing over the July 4 break.

Opposition was so complete it barely needed to be mentioned.

Of course, questioners would thank Sen. Ron Wyden and Rep. Suzanne Bonamici for their opposition to the bill, before asking them about something like outdoor policy. And Wyden and Bonamici themselves would bring the subject back to topics like pre-existing conditions, or sections redirecting Medicaid toward a cliff.

The Senate Republican bill, warned Bonamici, would take health coverage from 511,000 Oregonians, a statement that drew a roar of dismay and an urgent waving of green cards given out by the group Indivisible to encourage listeners to show support for the speakers. The same outcry, audible and visible, greeted Wyden’s warning that the bill would throw out Obamacare’s rules on what insurance had to cover.

Since arriving in the Senate two decades ago, Wyden has followed a policy of holding one town hall every year in each of Oregon’s 36 counties. But on this Thursday in early July, he was already holding his 51st town hall of the year, with two more to come before he returned to D.C. at the end of the recess.

And, he insisted in an interview after the rally, the message from town halls in Republican territory like Redmond and Newberg wasn’t greatly different from the message in steadily bluer Beaverton. “I’ve never seen a situation,” Wyden declared, “when the urban and rural parts of Oregon reacted the same way.”

(A part of the feeling may be the calculation that Oregon’s deep-red, mostly east of the Cascades 2nd district, represented by House Republican leadership member Greg Walden, is one of the top districts in the country for insurance gains under Obamacare, with an estimated 64,000 locals gaining coverage. Rural hospitals and health clinics are being particularly kept afloat by the legislation, which may not produce Beaverton-level roars but can make a small-town hall welcoming to Wyden – and somewhat obstreperous for Walden.)

The responses made it hard to remember the summer of 2009, when it seemed Bonamici’s predecessor, Rep. David Wu, would barely escape alive from town halls where he defended his support of Obamacare, and local police were needed to keep irate audiences in their seats. Either global warming has changed Oregonians’ summer attitudes, or after several years in operation, the program has actually gotten more popular.)

It’s a long way from even the most crowded and boisterous Oregon rally to the U.S. Capitol, but Wyden insisted to the crowd that they covered the distance. “Without this outcry,” he told the Beaverton audience, “sometime last month, around two or three in the morning, the Senate would have passed (Majority Leader) Mitch McConnell’s bill.”

It still might happen. Last week, McConnell declared that to try and pass a bill, he would keep the Senate in session two weeks past its scheduled August recess date. That will no doubt mess up Wyden’s town hall schedule, but it was unclear whether it would let McConnell nail down the 50 out of 52 Republican senators he needed.

Last Thursday, hours after McConnell unveiled the newest version of his bill – and right after Wyden joined Minority Leader Charles Schumer and Washington Sen. Patty Murray in a press conference to declare that Democratic opposition was unchanged – the Oregon senator calculated that the situation hadn’t changed.

“The recess,” he reported, “was not kind to Mitch McConnell.”

The message had gotten back, Wyden explained, even though, “I don’t think there was a large number of Republican senators holding open-to-all town meetings.”

McConnell’s new version did not change the sharp cutbacks on Medicaid – a particular problem for Oregon, which has seized expanded Medicaid opportunities – and he added Texas Sen. Ted Cruz’s plan to let insurance companies offer plans with minimal coverage, which Wyden assessed would “blow a hole in the system.”

By Thursday afternoon, GOP senators Rand Paul on the right and Susan Collins in the middle had declared they were still not happy, two other Republican senators had proposed their own plan, and Wyden noted that North Dakota’s John Hoeven and Kansas’s Jerry Moran had expressed doubts: “These are not senators who have gone out of their way to break from their party.”

The thing to watch, Wyden warns, is the “$100 billion taxpayer-paid slush fund” in the bill, resources that he says McConnell is brandishing in his talks with senators.

Still, the tide may be going the wrong way. Last week, hospital groups, insurance groups, disease advocacy organizations and elderly advocates became even louder in attacks on the bill. And, although unrelated to health care, Wyden noted that the week’s burst of Russian stories “didn’t bring a lot of authority to the brand.”

Even with the expanded schedule, he concludes, “Two weeks in August is not going to fix this deeply flawed bill.”

And it will still leave time for some more town halls.

NOTE: This column appeared in The Sunday Oregonian, 7/16/17.