Gov. Brown maps out how Legislature will balance budget

Transportation plans would tax new bicycles

SALEM, Ore. -- Gov. Kate Brown, with four weeks left in the Legislative session, said it’s time to stop the bare-knuckle politicking and move major bills including a hospital tax, a transportation package and a cost containment initiative.

“There’s a lot of hostage taking or at least threats of hostage taking happening in the legislative process on a number of issues. That is not abnormal for the end of a legislative session. I do not support those tactics,” she said Thursday.

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The Legislature needs the pieces to fall into place in order to plug a $1.4 billion hole in the 2017-2019 budget. The governing body is constitutionally required to adjourn by July 10.

Brown won’t say yet whether she’d call a special session if lawmakers miss the deadline.

“It’s time for us to move forward,” she said.

Gross receipts tax

A major sticking point is the Democrats’ desire to pass a gross receipts tax on business in lieu of the current corporate income tax. A major business group complained that there wasn’t enough time to vet the tax.

So, Sen. Mark Hass, D-Beaverton, and House Speaker Tina Kotek proposed boosting the corporate income tax for one year — from 6.6 percent to 8 percent on the first $1 million, and from 7.6 percent to 9 percent on additional income — to make the state budget whole and then adopt a gross receipts tax starting as soon as 2019.

Brown appears to have been lobbyist-in-chief on the tax proposal.

She said she’s met “extensively” with the business community, including with the Bend Chamber of Commerce, the Westside Economic Alliance, the Technology Association of Oregon — as well as Amazon, Nike and Intel.

“It’s key that we do this right and bring a portion of the business community with us,” she said.

Brown said she’s met with nearly every legislator and with most of the freshmen twice.

Still, “I honestly don’t know whether the votes are there at this point in time,” she said.

But Kotek predicted some Republicans will step forward.

"Support will keep growing for one main reason: the need and desire for statesmanship on both sides of the aisle," she said in a written statement.

"We’re so close to a real, comprehensive solution this session – one that has been influenced by years of advocacy from all sides of Oregon’s political spectrum, including business and labor leaders, Republicans and Democrats. It’s time to get the work done.

"This is a moment that requires statesmanship, and I believe we have leaders in every caucus – that’s why I’m still hopeful that despite the rhetoric, some of my Republican colleagues will come forward and help us seize this opportunity.”

But Rep. Cliff Bentz, R-Ontario, said Republicans remain opposed to the gross receipts tax.

"House Republicans are not willing to ask Oregonians to hand over more of their money to bail out a broken system, which is what this latest plan would do.

"We will continue to work in good faith to develop a solution to our state’s budget challenges that includes an emphasis on sustained economic growth, structural spending reforms that result in real and significant savings, and targeted investments in education and workforce development programs. We continue to believe this can be accomplished before the end of the legislative session,” he said in a prepared statement.

Hospital tax

The hospital tax — to raise $575 million in the next biennium — is more certain to pass, Brown said. The majority Democrats in the House and Senate need one Republican in each body to move the measure. Brown said she’s “fairly confident” the votes will materialize.

“No one in the healthcare community, not the hospitals, not the (coordinated care organizations), not the insurers, is interested in kicking Oregonians off the Oregon Health Plan, and Legislators are not interested in reducing benefits,” she said.

About 300,000 Oregon working poor, who gained Medicaid coverage through the Affordable Care Act, stand to lose coverage if the Legislature doesn’t pass the hospital tax or some other even less likely revenue measure.

Cost containment and PERS

Brown said she’s “thoroughly committed” to a cost containment bill that would save $691 million in coming years by reining in state spending on employee health care, supplies, vacant positions and other nips and tucks.

Some lawmakers say it’s “too hot,” others say “too cold,” the governor said. “That tells me it’s just about right. It’s time to move this bill and get it to my desk,” she said.

Brown said she means to sign the cost-cutting bill even if the Legislature doesn’t pass the gross receipts tax; a companion bill that would rein in the cost of the Public Employees Retirement System is another matter entirely.

PERS reform won’t move without the gross receipts tax. “Legislative leadership and I have been clear that they need to move together,” she said.

Transportation

Finally, Brown is adamant the transportation bill must move. “We need to be investing in our roads and bridges,” she said.

She is critical of the Service Employees International Union 503 members who recently threatened to block the transportation bill if the gross receipts tax didn’t progress.

“I was absolutely clear that I am opposed to this kind of strategy,” the governor said. “It’s like cutting off your nose to spite your face.”

Brown, however, said she’s unwilling to retreat on clean fuels standards to win Republican votes for the transportation package.

The governor said she approved of the Senate passing an $8.2 billion state school fund Thursday — on a 25-5 vote — even though she would like to add millions more to the budget in order to reduce class sizes, which can be done, she said, in the so-called “Christmas tree” bill at the end of the session. The reason it’s called Christmas tree is that it’s the last chance for lawmakers to hang expensive new programs, like ornaments, upon it.

 

© 2017 KGW-TV


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