Dear OSCC Members and Colleagues -
We continue to believe that the legislature has no real political pathway to balance the budget and finish its business in time for the July 10th constitutional deadline.
There are not the votes to pass major "cuts" budgets. There are not the votes to pass meaningful cost savings legislation. There are not the votes to pass increased taxes.
We have heard that the Democratic leadership has a major PERS reform bill they are willing to pass, but only if Republicans supply votes for tax increases. Republicans aren't interested.
Everything just feels stuck.
But in the meantime, OSCC recognizes and applauds the effort of Senate President Peter Courtney, who has made a determined effort to keep partisan bills off the Senate floor in the waning days - which generally has benefited business.
Two major things happened in the past week:
First, the business community - organized under the banner of the "Brighter Oregon" coalition - testified for the first time in the Joint Tax Reform Committee on its views on taxes and revenue. Tillamook Creamery CEO Patrick Criteser represented the business community and testified to the business community's willingness to come to the table with increased revenues if the legislature did the hard work of balancing the current budget with available revenues.
Second, the union-backed Our Oregon coalition, which sponsored the failed Measure 97, unveiled three more potential ballot measures for the November 2017 ballot. One measure would implement another major gross receipts tax - a "Son of 97." Another measure would require public disclosure of corporate tax information. A third measure would eliminate the 3/5th supermajority vote of the legislature needed to raise taxes.
Fortunately, business groups have the Measure 97 infrastructure intact to respond quickly to these ballot initiatives should the unions decide to pursue them.
Key Labor Bills:
BOLI Overtime Fix: OSCC continues to exert its influence on HB 3458, which fixes a new BOLI interpretation that requires food processors to pay both daily and weekly overtime when applicable. But the house bill requires too high of a price to fix this BOLI interpretation by placing a hard limit of a 60 hours workweek cap for all manufacturers. We have heard clearly from businesses across the state that a 60 hour workweek cap will irreparably harm operations of many chamber members.
The bill is effectively blocked right now due to concerns about the 60 hour workweek limit, but we do hope that legislative leaders will pass the underlying bill without the cap. The underlying bill which strictly fixes BOLI's interpretation (SB 984) has already passed the Senate unanimously. But it appears House leadership won't support the bill unless it contains some provisions favored by the unions.
Predictive Scheduling: OSCC believes that SB 828, which implements predictive scheduling for food service, retail and hospitality businesses, will start to gain traction again before the end of session. Business groups are hoping to leverage the bill to get a permanent statewide ban on local scheduling mandates. Unions are coalescing to try and pass this bill as it is their last major opportunity to pass 'pro-worker' legislation. The bill is undergoing several changes to gain the necessary business and union support. The latest version of the bill applies only to companies with 500 or more employees.
As a backdrop to the discussion, the unions have even filed two prospective ballot measures on the issue, presumably to pressure lawmakers into passing something now. The ballot measures filed by the unions are much more intrusive and harmful to business.
Cleaner Air Oregon: HB 2269 would increase Title V and ACDP fees to fund the new DEQ 'Cleaner Air Oregon' regulatory scheme. OSCC testified in opposition to HB 2269. We do have the votes to defeat this legislation at present as the current regulations being proposed by DEQ will kill off many local employers who won't be able to comply with the new emissions standards. We believe there will be amendments to the bill which will force DEQ to work cooperatively with the business community instead of just running us over. OSCC is cautiously optimistic we could get a workable outcome here.
Diesel engine regulations: SB 1008 is the diesel engine regulatory bill that keeps resurrecting as environmental groups desperately seek some sort of victory in 2017. The bill is the subject of new negotiations. As it stands now, the bill requires the state to do an inventory of all off-road diesel engines in Oregon and requires that the data be aggregated. But this clearly isn't enough to satisfy environmental groups. OSCC is actively monitoring the issue. We believe that several moderate Democrats will not allow the bill to become any more intrusive than it already is.
Liability Costs / Damage Awards: The trial lawyers' third attempt at trying to increase damage awards for negligence and personal injury lawsuits is going about as well as the previous two attempts. Having been defeated with SB 487, then SB 737 , the trial lawyers stuffed their amendments into HB 2807 and passed the bill out of the Senate Judiciary Committee on a partisan vote. HB 2807 increases non-economic damage limits from $500,000 to $10 million. OSCC believes we have the votes to defeat this bill for yet a third time.
Tax legislation of concern to OSCC members includes HB 2067, which blacklists certain countries as 'tax havens' and increases the tax burden on Oregon companies with affiliates located in these tax havens. HB 2067 blacklists some countries such as the Netherlands and Switzerland that have significant investment in Oregon. HB 2067 was sent back to committee this past week when it was clear it did not have the votes to pass the House. Amendments could be forthcoming.
HB 2019, which requires the public disclosure of Oregon taxes of any company that avails itself of at least $5,000 in Oregon tax credits, is also a bill that OSCC is actively engaged in. OSCC joins its business association partners in opposition to this intrusive bill. It is clearly meant to harass companies for whom the unions don't believe pay their "fair share."
HB 2064 could be used to allow diversions of TRT revenues to local "tourism related" projects in lieu of tourism promotion. Local governments, especially cities, have been seeking this change for several years, but have been successfully rebuffed by the tourism industry, particularly the state restaurant and lodging association. OSCC will be watching for amendments to HB 2064. We expect that House Revenue Committee chair Phil Barnhart will continue to make some noise on the issue, but we don't expect it has the momentum to make it through the legislative process.
HB 2391: Hospital taxes. This is the bill to watch for the taxes that will be needed to fund the state Medicaid shortfalls. The current tax scheme proposed by HB 2391 includes some provisions that business will generally support - increasing the Hospital Tax from 5.3% to 6.0% and adding rural hospitals into the tax scheme at a 4% rate. But there are also some elements not supported by business, including a 1.5% premium tax on health insurance plans. The total package raises about $575 million in new revenue.
Alison Hart, Executive Director
JL Wilson, Legislative Counsel