What's Happening (OSCC Political Observations)
What a week!
First off, Senate President Peter Courtney takes a 10-day 'medical leave' to deal with the stress of the session and its impact on his Grave's Disease. There is wide speculation that he may not return. We aren't able to separate fact from fiction at this point, so our assumption is that he will return. If he does not return, the trajectory of the session and the Democrats' ability to pass major progressive legislative priorities is certainly imperiled.
The second major event of the week was the release of the Ways & Means Co-Chairs' 2019-21 budget blueprint. The budget proposal only left K-12 and Medicaid harmless. All other state programs, including early education, higher education, and CTE were cut short of 'current service levels.' The hue and cry that ensued, primarily from the government employee unions and higher education advocates, added more fuel and momentum for additional business taxes.
Finally, we have grown increasingly concerned that SAIF Corporation will indeed be targeted for a raid of its workers' compensation claims reserves to buy down PERS rates for K-12. We have reached this conclusion as it has become clear that any increase in business taxes will be absorbed almost totally by increased PERS costs within two short years. This would make it much less likely that business and/or voters would approve of any additional taxes.
We are getting the distinct impression that Democratic leadership will try and force a choice to buy down PERS rates: either suspend the $748 million personal 'kicker' and divert it to paying down PERS rates for K-12 schools or face the prospect of taking a similar amount out of SAIF's reserves.
Activity on Major Issues
- Cap & Trade. (HB 2020) We are expecting brand new amendments, and perhaps a total re-write of the bill, to be unveiled the week of March 18th. We are not anticipating major improvements to the bill, but because the amendments are being closely guarded, we are unsure of what the new amendments will include.
- Independent Contractors. (HB 2498) OSCC was very successful in getting quick grassroots feedback into the House Rules Committee in opposition to HB 2498. As a quick reminder, HB 2498 would have turned Oregon's independent contracting laws upside down, jeopardizing thousands of jobs. OSCC joined several other business organizations to testify last Monday. We were joined by Keizer Chamber's Dan Kohler, who spoke about about the detrimental impacts to insurance, funeral home, and salon contractors. The Committee is weighing options as it considers a different path forward. Thank you to Bend Chamber and all who weighed in!
- Corporate Tax Increases. It is becoming clearer that the Revenue Subcommittee of the Joint Student Success Committee is starting to hone in on a new Commercial Activities Tax (CAT) as the basis for adding new revenue to the state's K-12 system. There is an outside chance the committee may support a Business Activity Tax (which allows deductions for capital expenditures), but early indications are that Democratic leadership is favoring the CAT, which in its current modeling, would be a straight 0.48% tax against a company's topline sales. This would be in addition to Oregon's corporate income tax. The subcommittee is clearly trying to raise a net $1 billion extra per year from Oregon companies.
- Lawsuit Damages. (HB 2014) OSCC testified alongside local physicians and health care providers against HB 2014 in the House Committee on Judiciary. 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.
Other Key Issues Coming up This Week
- Employment contracts. (HB 2489) OSCC is closely watching HB 2489, which would substantially shift the relationship between employers and employees in Oregon. The bill eliminates an employer's ability to enforce agreements if they aren't written and disallows employment contracts of longer than two years. A preliminary hearing is scheduled this week in House Business and Labor.
- OregonSaves penalties. (SB 164) This bill is tentatively 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 -3 amendment.
- Age discrimination. (HB 2818) The House Committee on Business and Labor is planning to host a hearing on HB 2818 on Wednesday. This bill makes it clear that employers may not screen job applicants based on age and adds new and substantial penalties to violation of age discrimination laws.