What’s Happening (OSCC Political Observations)
The legislature continues to be a very tumultuous and uncertain place. The Senate is currently mired in a leadership struggle as a handful of progressive Democrats and some Republicans are looking to topple Senate President Peter Courtney. This leadership struggle is taking up precious bandwidth in the Senate and is bogging down the process as Senators are more focused on the leadership issues than anything else.
The death of Secretary of State Dennis Richardson this past week also cast a pall over the session, both emotionally and from a process standpoint. The Governor has the lawful ability to appoint a successor to the late Secretary Richardson, and has stated her intention to find a ‘placeholder’ who will promise not to run for election in 2020.
This upcoming week is going to represent a major milestone in the 2019 session as the ‘Co-Chairs Budget’ will be released. This is the legislative response to the Governor’s budget that shows how state budget writers would craft the state budget with available resources. It is the first key budget blueprint that shows how the state’s money would be allocated without any additional tax increases. The ‘Co-Chairs Budget’ provides the budgetary foundation for all additional tax and revenue discussions. Usually, it will spawn advocacy for additional taxes and budget investments.
Activity on Major Issues
- Cap & Trade hearings provided a dose of reality. Hearings in the past week in Newport, Baker City, The Dalles, and Bend provided lawmakers with the stark reality that not all Oregonians are clamoring to pay more for their gasoline, natural gas or electricity to put only a very miniscule dent in Oregon’s greenhouse gas reductions. In what was expected to be a showcase for the organizing strength of the environmental activists, something else happened….regular working Oregonians showed up and voiced their displeasure with HB 2020 and its associated costs.
- Medicaid taxes passed. Final passage of the first major Medicaid funding bill, HB 2010, happened this past week. The bill raised over $500 million and will go a long way to closing the state’s $623 million budget gap. OSCC issued a floor letter on HB 2010. Our intention was to make sure that legislators understood that HB 2010 will raise over $291 million per biennium from local businesses. It was the first major business cost increase from the 2019 session.
- Rent control passed. The statewide rent control bill, SB 608, also passed the House and became law as Governor Brown quickly signed the bill. It is the first statewide rent control bill in the nation and limits annual rent increases to 7% plus CPI on buildings over 15 years old.
- OSCC opposed HB 3022 which overturns Oregon’s landmark workers’ compensation reforms. OSCC testified against HB 3022 last week, a bill that would have reversed many key, cost-saving provisions in Oregon’s workers’ compensation system. Before 1990, Oregon had the highest frequency of workplace injury claims, third highest medical costs, and sixth highest premium costs. Today, we have some of the lowest rates in the country and safety programs that help reduce workplace injuries. Oregon’s workers’ compensation insurance system is one of the last remaining competitive advantages for Oregon companies and OSCC will vigilantly safeguard the system from being compromised.
- Oregon revenue forecast added another $67 million to state coffers for the upcoming 2019-21 budget cycle. The state is experiencing a rush of short-term revenue that will slightly ease the budget crunch for the upcoming budget cycle. The “kicker” rebate projection was also increased to a whopping $748 million.
Other Key Issues Coming up This Week
- Independent Contractors. (HB 2498) On Monday afternoon, the House Rules Committee will consider importing California’s troubled Dynamex decision. In April 2018, the California Supreme Court determined that independent contractors must meet a new strict “ABC” test in order to maintain their status. That decision impacted 2 million independent contractors in California, making them employees! Now Oregon is looking to follow suit. HB 2498 would add a new test to Oregon’s independent contractors: “Do you provide a service different from the business you are working for?” If the answer is “no,” HB 2498 would reclassify you as an employee of the business. Implications are broad-doctors, hairstylists, insurance agents, realtors, and many others will be impacted if HB 2498 passes.
- Lawsuit Damages. (HB 2014) This bill is scheduled for a public hearing in the House Committee on Judiciary this Tuesday. 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 have traditionally opposed this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.
- Transient Lodging Taxes for workforce housing. (SB 595) This may clear its first hurdle this week in the Senate Housing Committee. SB 595 would allow local governments to use previously dedicated TLT funds and apply them to local workforce housing development. Currently, 70% of these revenues are statutorily dedicated to tourism and tourism promotion. If the committee approves the bill, it will be forwarded to the Senate Finance & Revenue Committee.
- OregonSaves penalties. (SB 164) This bill is scheduled for a work session on Thursday. SB 164 would add penalties to the Oregon Retirement Savings Program, which passed in 2015. OSCC worked with the Treasury and other business stakeholders to address our concerns with the initial bill, and these changes will be reflected in a -2 amendment.