What’s Happening (OSCC Political Observations)
The deadline for all policy bills has passed. Policy committees are now closed.
All legislation passed from this point forward will have to come from either the Rules, Revenue, or Ways & Means Committees. As we indicated last week, this signals that the 2019 session is in the final homestretch and that the decision-making will come down to just a handful of legislators in leadership. Most legislators will have little or nothing to do from this point forward other than casting votes on the floor.
Leadership is aiming toward a June 21 adjournment.
Activity on Major Issues
- PERS Reform took center stage last week. SB 1049 passed the Senate with a bare 16 vote majority. Democrats needed 3 Republican votes to pass the bill. SB 1049 contains the following provisions:
- 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 or later (PERS Tier 3 and Tier 4), would face a lower diversion – 0.75% of their salaries.
- The biggest cost savings comes from a re-amortization of 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.
The future of SB 1049 in the House is uncertain. Although it is only a modest cost-saving measure, the unions will mount a full scale opposition campaign in the House that will make passage difficult. We do NOT expect a House vote in the coming days.
What happened last week?
- Prevailing wages in enterprise zones (HB 2408). In a positive development, HB 2408 was killed late last week in the deal-making surrounding Measure 11 reform for juvenile offenders (SB 1008). House Republicans negotiated for a handful of bills in order to provide Democrats with the 4 votes they needed to secure passage of SB 1008. One of the issues that Republicans negotiated for was the death of HB 2408.
OSCC opposed HB 2408, which would have required that prevailing wages be paid on all private enterprise zone projects valued at $20 million or more. The bill would have effectively killed one of Oregon’s last remaining effective economic development tools.
- Cap-and-Trade (HB 2020). No activity on Cap-and-Trade last week. We are still waiting for the industry-approved amendments that OSCC and other business groups will be supporting as the bill sits in the Ways & Means Committee.
- Lawsuit Damages (HB 2014). The Senate Judiciary Committee approved HB 2014 last week, as expected, on a party-line vote. 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.
Other key issues coming up this week.
- Paid Family Leave (HB 2005). We are 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. (Please pay attention to “2019 Compromise” column.)
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.