This report provides a summary of recent actions and proposals on a wide range of issues, including a rundown of some key bills under consideration as the legislature gradually nears it July 10 deadline for adjournment. As the legislature nears adjournment, leaders are taking a number of steps to speed things up.  On Monday, Senate President Courtney announced that committees are now on “one-hour notice,” meaning that instead of waiting the normal 48 hours after posting an agenda, committees may now meet with an hour’s notice. This Friday, June 2 marks the last day committees in each chamber may approve bills from the other chamber. Following the committee deadline, policy committees may hold informational hearings, but their work in approving any further legislation is concluded. The only committees remaining in operation for the purpose of considering legislation will be the Joint Ways & Means Committee and the Revenue Committees and Rules Committees in the House and Senate.

Revenue Issues

The state’s most recent quarterly revenue forecast, issued on May 16, indicated that while still growing, Oregon’s economy is slowing down. The forecast for the 2015-17 biennium shows that revenues are expected to exceed the 2% “kicker” threshold by some $69 million, resulting in some $400 million in revenues received this biennium to be refunded to Oregon taxpayers.

Because higher income Oregonians pay more income taxes, the state’s kicker works in reverse–creating significant benefits for those with high incomes, while providing few benefits for those with low incomes. Kicker checks for 80% of Oregon taxpayers will fall below the average refund of $210. The top 20% of Oregonians will receive checks well over double the average check amount. The top 5% of income earners are projected to receive refunds well over five times the average check. Refunds for the top 1% of taxpayers will be over $4,000, while the bottom 20% of taxpayers will receive a $5 refund.

The May forecast is used to calibrate the state’s budget for the 2017-19 biennium. Given the forecast for the current biennium, legislators will need to set aside some $400 million for the kicker, while developing a state budget that still faces a $1.4 billion shortfall.

Legislators have fewer than seven weeks before the deadline to adjourn, which has resulted in both renewed calls for revenue reform and an increasing realization that there may not be time to strike a deal on a new tax structure. The debate over revenue reform is not only about whether it is needed but also about how broadly a new corporate gross receipts tax might affect business, how it might be designed to minimize the effect on businesses with narrow profit margins, how to adjust for possible imbalanced impacts on low-income Oregonians, and how to avoid “pyramiding” by which the same product is taxed multiple times.

It may not be possible for legislative leaders to garner the bi-partisan three-fifths majority need to approve a tax overhaul, causing a number of legislators to observe that a special legislative session may be needed. To avoid lengthy and disruptive deliberations, in the past, special sessions have relied on a significant amount of preparatory deal-making before legislators or the Governor calls them into session.

In view of the impending deadline for the 2017 session, last week the seven university presidents sent a letter urging the Governor and legislative leaders “to confront the painful and costly realities of inadequate revenue streams and debilitating cost drivers.”

We ask that you carefully consider and agree upon a path forward for the future, making the difficult, but necessary choices to raise revenue to invest in higher education while curbing unsustainable costs at the same time, and grow the economy. We need you to look for solutions that are politically viable and can withstand scrutiny from civic leaders, elected officials, courts, and voters. We will join you in supporting these actions.

The Oregonian editorialized that “the time has come” for a “less volatile revenue stream that can help pay down the massive unfunded pension liability created by years of bad legislative and administrative decisions.” The paper cited a proposal by Sen. Mark Hass (D-Beaverton) as “more fair and attainable than other proposals.”

Legislators appear to be making more progress in developing a health care provider tax and agreements over the taxes and fees needed to finance a statewide transportation package but it is not evident that any Republicans are ready to support a general revenue package, or what budget reductions or “cost containment” actions are needed to obtain Republican support for a tax increase.

In the meantime, the Joint Ways and Means Committee is starting to approve non-controversial state agency budgets, particularly for those agencies that rely on fees and other funds for a majority of their financing.

Higher Education Bills

Legislators are making progress on most higher education policy bills, while hitting snags on others.

Forest products harvest tax: The House Revenue Committee is expected to consider amendments to HB 2270, which renews the forest products harvest tax. The amendments would both eliminate provisions that require legislative approval to renew the tax each biennium and reduce funding for the Oregon Forest Resources Institute in order to pay for firefighting costs.

Credit for Advanced Placement scores: This week, the House Higher Education Committee will consider amendments to SB 207, which, as passed by the Senate, would require universities to accept scores of 3 on advanced placement tests for college credit. Community colleges and universities are seeking provisions that ensure faculty retain control over the process by which credits for post-secondary education are considered and awarded.

Financial aid information: The House Higher Education Committee approved SB 253, which requires universities to provide information about debt burdens to students. Universities have sought clarifications in the bill that would enable institutions to provide a generic table of loan repayment information based on a model from Nebraska.

Faculty bargaining units: The Senate Education Committee is considering amendments to HB 3107, which would enable supervisors to participate in unions on university campuses. Clarifying amendments ensure that supervisors would be in separate bargaining units.

Information on high school graduates: The House did not concur with amendments to HB 2147, which would require post-secondary institutions to provide ODE and the HECC information on Oregon high school graduates. The House and Senate have appointed Conference Committee members to iron out their differences.

Cultural competency: The Senate Education Committee is slated to consider HB 2864, which establishes expectations for higher education institutions to develop and implement programs that seek to improve the cultural inclusion climate for students, faculty, staff and administration from diverse backgrounds.

Impact of legislative mandates: The Senate Education Committee will be considering HB 3288, which would require public universities to report on the impact of legislative mandates as well as causes for increased administrative positions. Universities are seeking amendments to revise the “whereas” clauses in the bill.

Funding for higher education programs serving veterans: Universities continue to work with bill sponsors and Oregon Department of Veterans Affairs on SB 143 to identify uses for funds approved under Ballot Measure 96. Amendments to the bill would enable one-time funds for universities and community colleges that have established veterans programs. Institutions have indicated ongoing funding is needed to provide consistent and meaningful support for veterans.

Oregon Talent Council: The Senate Education Committee has approved HB 3437, which would wind down the Oregon Talent Council and shift responsibilities for developing a talent plan to the renamed State Workforce and Talent Development Board. The Joint Ways & Means Committee will need to approve $1 million in funding for the grant program that was previously administered by the Talent Council.

Foster children in higher education: The House Higher Education Committee approved SB 395, which would require the HECC to work with DHS and public universities and community colleges to determine the number and graduation rates of former foster children.

A number of bills have been approved by relevant policy committees and are awaiting consideration in the Joint Ways & Means Committee because they involve funding issues. These include:

• SB 201 Retroactive Fix for Out-of-State University Employees
• SB 214 Establishes Alternative Retirement Plans for Postdoctoral Scholars
• SB 805 Provides a $9.4 million increase for the OSU Statewide Public Service Programs – Extension, Agricultural Experiment Station, and Forest Research Laboratory – to meet their continuing service level.
• SB 285 Provides $4.6 million as a state match for a USDOE wave energy grant awarded to OSU.
• HB 2582 Establishes a University Research “Fighting Fund”
• HB 2729A Textbook Affordability (Open Educational Resources)
• HB 2782 Provides $69.5 million in capital funding for the expansion of the OSU-Cascades Campus.

Advocacy Efforts

OSU-Cascades: Last Wednesday, May 24, the Senate Committee on Business & Transportation heard from a contingency of economic development advocates from Central Oregon in support of the full expansion of the OSU-Cascades campus. To view the hearing, click here.

Beaver Caucus: On Tuesday, May 23, a team of volunteer advocates including students, a former state legislator, alumni, and industry representatives participated in lobbying meetings with legislators. They advocated for increased financial support for all seven public universities, expansion of the OSU-Cascades campus, and restoration of funding for the OSU Statewide Public Service Programs – the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory. Find more information about the Beaver Caucus here.

If you have questions or concerns, contact Jock Mills.

See this and other updates at blogs.oregonstate.edu/government