Last minute proposals for 2017 Session

Oregonians For Food And Shelter

As the 2017 Session winds towards Sine Die, we’re finally seeing some concrete proposals on transportation, tax increases and cost savings. These were the three major issues that the Governor and legislative leaders pointed to at the beginning of the Session, but until this week, there has been very few bills actually addressing them.

The Joint Committee on Transportation Preservation & Modernization held public hearings this week on a proposed transportation package, HB 2017. At nearly 300 pages in length, there are many different pieces to the package, but highlights include:
$338 million for adding lanes to I-5 through the Rose Quarter
$152 million for I-205 Abernethy Bridge improvements
$188 million for widening I-205
$98 million for adding lanes to Oregon Route 217
Dozens of smaller projects statewide
This would be funded through:
14-cent statewide gas tax increase, phased-in incrementally
Vehicle registration fee increases that are phased-in incrementally and higher on fuel efficient vehicles (targeting the hybrids and electric vehicles)
Excise tax on vehicle sales
0.1% statewide employee payroll tax
0.75% excise tax on new and used vehicles
Bicycle excise tax of 3%
The Portland Metro area will also pay an additional 9-cent gas tax and $15 vehicle registration fee to pay for the major projects planned there
Also this week, House Speaker Tina Kotek (D- Portland) and Senator Mark Hass (D- Beaverton) released another tax proposal. The newest idea is to raise income taxes on businesses for the next two years and then replace the corporate income tax with a gross receipts tax in 2019. This type of tax would focus on revenue, not profit, and can apply even if a business loses money in a given year. The gross receipts tax would apply to sales and services above $3 million a year. The proposed rates are:
0.75 percent for services, such as barbers, medical providers, lawyers and accountants
0.35 percent for retail
0.25 percent for wholesale
0.15 percent for agriculture, forestry and fishing
0.48 percent for all other sectors.
The Joint Committee on Tax Reform will hold a public hearing on HB 2830, which would be the legislative vehicle for a tax plan to be amended into. The two public hearings are scheduled for:

Tuesday, June 13th
8:30 AM and 5:00 PM
Hearing Room A

Since tax increases are required for both the transportation and tax proposals, they would both need three-fifths majority votes for passage. That means that at least one Republican vote is needed in each chamber. Republicans have made it clear that they will not vote for any tax increases without them being coupled with cost savings. That led Democrat lawmakers to release some proposed savings this week. Those include:
Stop including automatic inflation increases for services and supplies in state budgets, saving a projected $211 million in the next biennium
Slow down the process for filling vacant state government jobs, saving as much as $145.3 million in the next biennium
Eliminate jobs that were left vacant more than six months, saving an estimated $67.8 million in the next biennium.
Combining the two boards that manage health care for teachers and public employees and limit the annual growth rate of state-paid health insurance premiums to 3.4%. This could save $130 million per biennium.
It is yet to be seen if these proposed savings are enough to convince any Republicans to vote for a tax increase. Complicating matters this week has been actions by the public service unions. Following up the introduction by the unions of three tax related ballot measures that we told you about in last week’s newsletter, the Service Employees International Union 503 (SEIU) threatened to collect signatures to refer the transportation package to voters if the legislature didn’t also increase taxes on businesses. This threat was made in a public hearing on the transportation package and was not well received. Even Governor Brown criticized these tactics, and the fallout could hamper both the transportation and tax proposals.

It’s anybody’s guess whether any of these three bills will actually pass this legislative session, but none of them have much momentum at the moment. With Sine Die slated for July 10th time is running out. There has been a serious lack of leadership on these issues, and unless that changes, July 11th will leave Oregonians talking about what could have been.

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