What’s Happening (OSCC Political Observations)
Leadership is aiming toward a June 21 adjournment. Committees are rapidly finishing their work, particularly on the budget. The end game negotiations are largely concluded, and now that the PERS cost reduction bill passed, there seems to be an interesting mix of fatigue and resignation coupled with the excitement of seeing the finish line.
But there are a couple of major issues OSCC will be engaged in until the end.
What Happened Last Week?
- PERS cost savings legislation passes. SB 1049 passed the Senate with a bare 16-vote majority and then followed with passage in the House with a bare 31-vote majority, but only after Speaker Kotek stood ‘at ease’ on the House floor and called Democrats into her office to twist enough arms to secure the 31 votes she needed.
It was perhaps the most impressive display of political clout that we’ve seen all session. The Speaker literally marshaled all 31 votes she needed from her own caucus (no Republicans voted for the bill), and in the process infuriated her caucus’ biggest constituency and benefactor (public employee unions). It was truly impressive.
As a refresher on the substance of SB 1049:
- Tier 1 and Tier 2 members, who are public employees who entered the PERS system before 2004, would have 2.5% of their salaries diverted from their individual retirement accounts into paying off the system’s debt.
- Workers hired 2004 of later (PERS Tier 3 and Tier 4), would face a lower diversion – 0.75% of their salaries.
- The biggest cost savings comes from the re-amortization of the pension debt. Over 2/3 of the savings comes from this re-financing provision.
- A reduction in assumed interest rate for retirees who use the “money match” method of calculating their pension benefits.
- SAIF is largely held harmless.
- About $600 million in pension cost savings per biennium across state government and schools.
Activity on Major Issues
There are three major issues still active that will greatly impact OSCC members and local economies.
- Cap-and-Trade (HB 2020). Cap-and-Trade is moving again. We are expecting a Ways & Means sub-committee vote on Wednesday night. We are expecting a Ways & Means full committee vote as early as Friday morning. Business groups have been promised a full committee vote on the business amendments to the bill.
The politics of HB 2020 are still complex and may yet throw a monkey wrench into the session. Passage is still uncertain in the Senate. Many business organizations, including OSCC, view the legislation as an existential threat to our manufacturing community, particularly on the heels of the newly-minted $2.8 billion gross receipts tax.
- Lawsuit Damages. (HB 2014) HB 2014 would repeal Oregon’s legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers. We are currently in a pitched battle on this issue in the Senate as we are fighting for the votes to stop this bill. We expect a Senate vote this morning.
Paid Family Leave (HB 2005) OSCC is still awaiting amendments for a new paid family leave bill that would implement a new 12-week paid family leave program for all businesses down to the first employee. We don’t have final language on the proposal, but we can share a sheet that shows the features of the new proposal.
Remember, several business organizations have asked for passage of this proposal, thereby increasing the likelihood of passage. The theory was that if business did not support a paid family leave proposal in the 2019 session, we would be confronted with a ballot measure in 2020 that would propose a far more costly and unwieldy system