Oregon lawmakers learned last week they will have more state revenue than expected and Senate Republicans staged a one-day walkout demanding an immediate reopening of public schools for all grades. And a proposal surfaced to jack up state taxes on alcohol, with new revenue going for an Addiction Recovery Fund.
The latest quarterly state economic report, which shows revenue more than holding steady, was greeted with smiles – and a few frowns. The smiles were for a projection of higher state revenues, up 5 percent, which adds $677 million to the budget available for lawmakers. Proceeds from the Oregon Lottery and marijuana taxes were down.
The frowns resulted from a simultaneous projection by state economists that higher-than-expected revenues will trigger the personal income tax kicker of $571 million, which taxpayers can receive when they file their 2021 state income tax returns next year. State economists report Oregon’s budget reserves will exceed $3 billion by the end of this biennium.
Going behind the numbers, the report reflects that Oregon middle and upper-income taxpayers haven’t been significantly affected by the pandemic-induced economic downturn. Because Oregon relies heavily on income taxes rather than consumption taxes, revenue projections have continued to trend upward. That trend is likely to continue as COVID-19 is brought slowly under control and more businesses, especially in the retail and hospitality industries, reopen. State economists estimated there are 160,000 fewer jobs in Oregon right now.
The forecast numbers don’t take into account sums the state expects to receive from the $1.9 trillion American Rescue Plan that has passed the US House and is pending in the US Senate. Democrats who are pushing the proposal from President Biden hope to have enacted by mid-March, in plenty of time for state budget-makers to apply. Going into the 2021 session, lawmakers were looking at a budget shortfall of $1.6 billion in the 2021-2023 biennium that begins July 1.
Economic forecasts could change if the virus resurges. State health officials report 550,000 Oregonians have received at least one dose of the coronavirus vaccine as the number newly reported cases and hospitalizations have dropped back to where they were last October before holiday season. Oregon has continued to have one of the lowest death per capita rates in the nation. It also has one the lowest vaccination per capita rates.
Starting March 1, all adults 65 and older are eligible to receive the vaccine, assuming they can navigate the online process of scheduling an appointment. An emergency use authorization for the one-shot Johnson & Johnson vaccine should augment supply and allow more vaccinations sooner than later. Adults between the ages of 45-64 with underlying conditions and workers in the agricultural, food processing and seafood sectors should be able to receive shots no later than March 29. Frontline workers, including postal workers, transit operators and those employed in manufacturing, construction, public safety, higher education and ranching, will be eligible by May 1. Everyone over age 16 should be able to receive a vaccination by July 1. Here is a chart show the phased-in eligibility for vaccination.
As House and Senate leaders signaled an increase in the number of floor sessions starting this month, 11 Senate Republicans walked out last Thursday, denying the Senate a quorum to conduct business. It is the third session in a row Republicans have boycotted floor sessions to delay or block legislation or, in this case, to protest the slow pace of reopening public schools.
It isn’t clear whether there will be more walkouts. The Senate walkout coincided with the GOP caucus naming Senator Dallas Heard its new leader. Heard gained recognition in the December 2020 special session when he tore off his mask during a Senate floor session.
Piles of new bills continue to surface and expected to exceed a whopping 4,000. However, none landed quite as loudly as House Bill 3296, which proposes whopping increases on wine and beer taxes. Under the legislation, the wine privilege tax would rise from 64 cents to $10.65 per gallon. The tax on beer and hard cider would go up from $2.60 to $72.60 per barrel. The new tax rates would be tied to the consumer price index and increase annually.
Piles of new bills continue to surface and are expected to exceed a whopping 4,000. However, none landed quite as loudly as House Bill 3296, which proposes whopping increases on wine and beer taxes.
Cities and counties would continue to receive their existing share of beer and wine tax revenues. The bulk of new revenue would be allocated to a new Addiction Recovery Fund administered by the Oregon Health Authority. Oregon’s beer and wine industry has fended off previous attempts to raise their taxes, noting their rates of taxation are in line with other producer states.
The hearing that generated the most buzz last week centered on House Bill 2205, which would allow public and private employees to retain private trial lawyers to pursue workplace claims on behalf of the state. The Private Attorneys General Act was praised by its chief sponsor, House Majority Leader Barbara Smith Warner says employees who face workplace abuses need an avenue to pursue their claims and the current public system is inadequate and under-funded to protect them. A long list of business groups lined up to testify in opposition, saying the only real beneficiaries will be trial lawyers. They said a better approach is to beef up enforcement of workplace protections.
A few additional notes:
- More than 900 Oregon landlords have filed in Oregon for compensation for unpaid rent resulting from an extended moratorium on evictions. Meanwhile, a group of landlords has filed a federal lawsuit claiming eviction moratorium is unconstitutional.
- Oregon Secretary of State Shemia Fagan has joined the advisory board for the National Popular Vote movement. Its goal is to reform the Electoral College by getting states equaling 270 or more electoral votes to agree to award their votes the candidate who wins the popular vote nationwide. So far, 15 states and the District of Columbia have signed up to the interstate pact, which would effectively replace the Electoral College.
- Legislation has been introduced that make the second state in the nation to allow human composting as an alternative to burial or cremation. More than 100 people have submitted written testimony mostly in support of House Bill 2574. Washington is the only state currently allowing human composting.