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What’s Brewing: “Legislative Outlook 2017” Recap

 

The season’s first What’s Brewing forum presented by the Bend Chamber kicked off at the Deschutes Brewing Tap Room on January 24. The topic for the sold-out event was Legislative Outlook 2017 and panelists included our local state delegates in Salem; Senator Tim Knopp and Representatives Knute Buehler and Gene Whisnant. They fielded a wide range of questions from the audience. The evening’s hot button issues included revenue reform, the land-use process, health care and transportation.

Moderated by Jamie Christman, EVP Community Affairs at the Bend Chamber and Bend Chamber Advocacy Council member Scott Ramsay, the audience was taken on a wild ride of the ins and outs of the current legislative session and a bit of is also happening in Washington D.C.

In the opening statements from the panel, Senator Knopp tackled the question about Oregon’s $1.2-$2 billion budget shortfall highlighted by Governor Kate Brown.

“It’s odd because we have record revenue, record low unemployment and the economy is doing pretty well. If you have record revenue and your spending is exceeding that, it seems like you have a spending problem.”

Representative Buehler echoed Knopp’s concern and added the deficit problem has been building over the last 20 years. Thanks to structural deficits in the form of PERS and other promises to Oregonians, it was just a matter of time before the shortfall was going to reach this point.

“There are solutions, but that will take people getting into the room and honestly having a discussion about how to fix the problems, focusing on the policy as much as possible, and putting politics aside,” shared Buehler.

Representative Whisnant pointed out that what the governor calls a “budget” is not viewed as such in Salem. It’s called a “framework budget”. The framework only indicates what is allotted to different categories, and Whisnant used K-12 education as an example:

“The current service level is below $8 billion. The co-chairs put in $7.8 billion, so the subcommittee has the task to come up with $212 million to make that balance.”

In order to pay for the shortfall, the Legislature is coming up with bills that will generate the needed revenue.  Whisnant also pointed to the many bills proposing broad cuts from what Oregonian’s can deduct from their taxes.

“[That includes] the mortgage interest deduction, lending mortgage interest deductions, limiting property tax deductions, limiting itemized deductions, and corporate income tax going up.  In addition there will be a tax increase on cigarettes, beer, and soda. The “Son of 97” will also be added to that list,” explained Whisnant.

The first question asked by the audience was whether or not Oregon will ever have a balanced budget.

Whisnant told the audience the Legislature is making too many assumptions when it comes to the Public Employee Retirement System (PERS) and allowing the issue to be kicked down the road.

“You have read in the paper that we have $22 billion in unfunded liabilities in the PERS fund. The problem is, in the budget process you are allowed to say that the fund is earning 7.5% interest return every year – in the last budget it was actually 2% less.  It’s over 5% on $60 billion that we’re assuming is in that balanced budget.”

Bend Chamber’s new president, Katy Brooks, wanted to know if the panel could give the business community advice on how to get behind an initiative or a policy that would articulate they are willing to fund things like the local school bond.

“I think the business community has to tell their story a little bit better on what they will support,” said Knopp. “It is important for the business community to let the public know that they do support increased revenue when it goes to something tangible, where they can see a benefit.”

City of Bend lobbyist Erik Kancler.

Eric Kancler who is contracted as the lobbyist in Salem for the City of Bend pointed out that one of his main priorities is to advocate for a transportation package and asked the panel what it will take to pass a bill.

Buehler said there is a broad agreement in the Republican caucus, in both the House and the Senate, for transportation infrastructure spending and that means increasing the gas taxes. But the Republicans don’t feel comfortable doing that right now due to the passage of the Low Carbon Fuel Standard legislation.

“It was a bad piece of legislation,” said Buehler. “It effectively increases the gas tax by almost 60%. In order for the transportation bill to go through this time, this piece of legislation needs to be modified considerably to make it more fiscally responsible.”

Senator Knopp agreed with the argument to modify the Low Carbon Fuel Standard legislation, adding that without discussion, a transportation package will be a heavy lift.

“There is a possibility for a transportation package, but those in power have to find consensus and work with those of us who are in the minority, otherwise it is going to be rough.”

“There is a possibility for a transportation package, but those in power have to find consensus and work with those of us who are in the minority, otherwise it is going to be rough.”

Framing his question that he attended the event as a private citizen, not as a city councilor, Bill Moseley weighed in on the transportation concerns Kancler raised. Voicing some frustration, he pointed out that several projects in Bend were heavily influenced by the out-of-area committee, the Land Conservation and Development Committee (LCDC), .

“We eliminated a turn lane on Franklin, going southbound on Third Street for the purpose of increasing congestion on our street so people may bike and walk more, because the state’s goal in the legislature is to reduce American’s utilization of vehicles,” said Moseley. “All these measured actions make it more difficult for municipal government to have its freedom to build out its road system, especially in a growing community.”

Whisnant agreed with Moseley and hinted that the LCDC is the most powerful commission in the state.

“I know enough to say that the LCDC is representing the Valley and not the state. Until that changes and we get better, more common sense land use, I don’t know how much money we are going to see,” said Whisnant.  “Last session does offer a little bit more money in that the lodging tax in the state was increased.  After they pay for the world track event at the University of Oregon, there will be money to help, not just money for advertising, but for roads.”

“Obviously there’s a group that wants to enforce their vision about the way our community should look,” added Knopp. “I’ve got a real problem with the state mandating how a city grows. We’re the ones that live here. We have a duly elected city council and county commission, and we have planning commissions for both that are appointed.  It seems to me that the citizens of the area where we live should be able to determine how we are going to live.”

As the event proceeded, the topics moved outside of Salem and touched upon what is happening in Washington D.C. and the impact of the new administration when it comes to the Affordable Care Act (ACA) or “ObamaCare”.  One of the most immediate issues is moving the fiscal responsibilities for ACA from the federal government to the states.

“I think everybody recognizes that the ACA is spiraling out of control and it is going to implode,” said Knopp. “Republicans want to repeal it and replace it with something different. We’re all concerned about the transition and want to make sure that people continue to stay covered.”

Knopp put a timeline on the transition to 2-3 years and told the audience it is more than likely the current administration will turn over the fiscal responsibility to the state in the form of block grants.

“The states are obviously concerned that it won’t be the same amount of money, there will be less money, but they will have more flexibility. Until we know the details of that plan it’s hard to plan for what’s going to happen,” said Knopp.

“The states are obviously concerned that it won’t be the same amount of money, there will be less money, but they will have more flexibility. Until we know the details of that plan it’s hard to plan for what’s going to happen,” said Knopp.

After the quick outing to Washington politics, Moey Newbold from Central Oregon Land Watch returned the questions to a more local perspective with one about the UGB, population growth and protecting the region’s environment. She referenced an earlier discussion about a wish to make changes to the UGB process and bring it closer to the region.

Knopp stressed that the local Republicans had no plan to get rid of the UGB process.

“What we suggested was flexibility for local residents for how [the region] grows. It took ten years and about $10 million dollars to get [it] passed and to me, that’s appalling. If it only took three years and $3 million, could the city council use $7 million for transportation? We need to take away some of the power from the state and give it back to the local people.”

Buehler touched upon the fact that the current UGB expansion only brought in a little over 2,000 acres. “The land use system doesn’t work when it takes the City of Bend decades and millions of dollars. We make Bend so unaffordable that most average families can’t afford to live here,” said Buehler.  “We need to tweak it, make it better, and more regionalized so we can respond to the needs of the people living in the community.”

Commenting on the affordability of housing in Bend, Gwenn Wysling from the Bethlehem Inn asked the three panelists if there is help or relief on the horizon.  Knopp recognized the problem will persist since people will continue to move to Central Oregon and added:

“There is no silver bullet that is going to solve the problem. We are going to have some increased land supply, but you have to balance supply with demand. If you don’t do that, you’re always going to have a problem. People want to move here.”

The topic for the Chamber’s next What’s Brewing will be “Immigration and Our C.O. Economy” with panelists Brad Porterfield, Preston Callicott and Dan Larsson along with key audience guests to discuss the possibilities and realities ahead.

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