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Dear Friends and Neighbors:
I hope that you are enjoying these final, lovely days of summer. Now that my summer teaching is done, Kiki and I are at last able to get away to rest and enjoy some beautiful Oregon scenery--Coast, Cascades, High Desert, and Shakespeare in Ashland!
In this newsletter, I want to tell you about our next Constituent Coffee, along with information about the August 28th revenue forecast, the latest on Pay It Forward, a newly opened Bottle Drop close to our district, and the upcoming Hands Across the Bridge event.
Happy Labor Day to you and your loved ones!
Constituent Coffee -- Saturday, September 7th
Yes, it's that time again. Please join me for my September constituent coffee, Saturday 9/7 at the Hollywood Senior Center (1820 NE 40th Ave.) at 10am. We'll likely be in the classroom space near the front entrance, as before. I hope to see you -- our next set of legislative committee meetings is coming up mid-September so this will be good timing for a check-in.
Special Session????
As I’m sure you’ve heard, Governor Kitzhaber is considering bringing the Legislature back into a brief special session in order to pass a package of revenue increases and further PERS cuts, something relatively similar to what was being contemplated at the end of the regular session in July. It might also involve an attempt to win approval of a scaled-down Oregon-only I-5 Bridge Replacement Project (Columbia River Crossing).
At this point, no one can say for sure whether or not the special session will take place. It’s not clear yet that the votes are there for passage of the various bills and it’s not clear that there’s a time that all legislators will be able to attend, due to pre-existing commitments. Both will most likely need to happen before the session is called. The details of any actual legislation to be considered are still too unclear, but I'll let you know when I know more.
September Revenue Forecast: Pretty Much As Expected
On Wednesday the Legislative Finance and Revenue committees received the quarterly economic update from the Office of Economic Analysis, and the news is pretty much what was expected when the 2013-15 budget was finalized in the spring.
According to the economic forecasters, the Oregon’s economy has remained relatively stable. Overall growth is up a half percent from last year (2.5% as opposed to last year’s 2%), with growth in the private sector a little higher. While a solid improvement, this rate of increase is not as high as we have experienced coming out of past recessions. Still, in the words of the forecasters, “The past drags on the economy are starting to lift.” Notably, housing “has turned from a headwind to a tail-wind.” The biggest housing-based growth has, not surprisingly, been in those areas of the state most dramatically hurt by the housing downturn—Southern Oregon (Medford) and Central Oregon (Bend)—where the housing bubble had been strongest. The second diminishing headwind has been related to public employment, where the cuts are beginning to diminish now that we are exiting the recession. Stability in the public sector is having ripple effects in the private sector.
Still, the current economic picture is not all that we would want it to be. Though conditions are improving in Bend and Medford, overall, it’s the Portland metro area that is really driving the recovery. Also, while unemployment is diminishing, and many laid-off workers are finding employment, we still have serious problems with the “long-term unemployed” (those who’ve been out of the job market more than six months). As was pointed out in the presentation, when workers remain unemployed for a long time, they become a long-term drag on the economy. Employers become reluctant to hire them, as a certain stigma is placed on them—they are perceived to have personal “issues” that are keeping them unemployed. This is the case even when their status is due entirely to the lingering effects of the recession and structural dislocations in the workplace, issues out of their control. The only real solutions for such workers are high-quality workforce development programs and employers more willing and able to hire.
Finally, it was pointed out as a problem that the jobs that are being created are low-income and relatively high-income jobs. There is much less in the $30,000-$50,000 range, the core of the middle class.
As for the state budget picture, there was a slight downturn in 2013 income tax collections, mainly due to higher than expected refunds, to the tune of $39 million. This amount is small enough to be absorbed in the ending fund balance for 2012-13 without our having to do any budget cuts. We now know definitively that neither the corporate nor the individual kickers will kick this year. Overall, we remain on track with projections for 2013-2015.
For those of you interested in the details, here is the economic analysis presentation by the Office of Economic Analysis.
And the Revenue Forecast.
Pay It Forward Goes National!!!
In my last newsletter I reported on the astonishing level of media interest that erupted with the unanimous passage of HB 3472, the bill that charges the Higher Education Coordinating Commission (HECC) with analyzing and coming up with a Pay It Forward pilot program to present to the Legislature for approval in 2015. Pay It Forward would allow students in the program to defer paying tuition until after they have graduated and are earning a salary. Their repayments would be tied to their monthly income, and would constitute no more than 1.5% of their income for a community college graduate and 3-4% for a university graduate. This was an idea that was brought to me by a group of PSU students, with strong support from the Working Families Party, and I was pleased to help it get to passage.
For a quick overview of the legislation and the assumptions behind it, check out this PowerPoint that I presented at a recent meeting of the Council of State Governments-West.
In the last couple of weeks, all that media interest has led to a high level of interest in legislatures around the country and at the federal level. I’m now part of a network of legislators who are in the process of drafting similar legislation in Washington, California, Pennsylvania, Maryland, Ohio, Michigan, and a number of other states. The Economic Opportunity Institute has been helping to coordinate this effort, so that the different pilot programs can test different variations in how the program might work. Oregon Senator Jeff Merkley, along with a few of his colleagues in the Senate, will be submitting a bill that will help with the funding of the pilots, will make it easier for graduates to be tracked as they move from state to state, and will ensure that students in Pay It Forward will still be eligible for other forms of financial aid. At my request, there will also be sideboards ensuring that states cannot use Pay It Forward as a way to reduce their level of support for higher education. I’ll let you know how that legislation is proceeding.
It’s wonderful to see Oregon becoming such a leader in the effort to make college more affordable and accessible. It’s creating hope and spurring creative thinking among many, and I’m very proud of that. But we also cannot be distracted from the fact that Oregon is currently number 46 in the nation in its level of support for higher education. There is no way that we can create the educated workforce and citizenry that we need if we shift more and more of the costs of higher education onto the backs of students and their families. If we could just move Oregon up to the middle of the pack, it would make an incredible difference in our ability to open up access to those who need it. That must be our long-term goal.
New BottleDrop Redemption Center Opens at NE122nd and Glisan
Oregon is known as the “bottle bill state,” thanks to the innovative legislation that was passed back in the 1970s. Starting with beer and soda cans and bottles, our 5-cent redemption system now includes plastic water bottles, and in a few years it will cover other types of drinks.
It’s a great system in many ways, but redemption rates (i.e., consumers bringing back their cans and bottles and getting back their nickel deposit) have been declining over the years. In part, this is due to the fact that the nickel deposit is not the incentive that it once was. In part, it’s due to the fact that until recently there has not been an adequate public-awareness campaign to encourage redemption of water bottles. In part, it’s due to the fact that many people don’t like to use the bulk return machines at the grocery stores. They are all too often dirty and inconvenient. And frankly, the large supermarkets don’t really want them there.
Many of us in the Legislature have been pushing the industry to take steps to use the substantial deposit money that is never redeemed (the lower the redemption rate, the more money stays in the accounts of the distributors) to improve the redemption system. In 2009 Senator Dingfelder and I proposed legislation to direct to the state school fund any unredeemed deposits that weren’t being used to improve the system. It didn’t pass, but it certainly got the industry’s attention. Then in 2011 we passed HB 3145, legislation which potentially increases the deposit to ten cents if redemption rates are below 80% for two successive years starting in 2015.
The prospect of an increase in the deposit makes the industry very nervous, as they fear it will lead to a reduction in beverage purchases. However, without aggressive action on the part of grocers and distributors, this seems very likely (the OLCC reported in 2012 that the redemption rates were 78.45% for glass, 76.06% for cans, and 54.38% for plastic water bottles, or 70.95% overall).
Clearly, dramatic action is needed. I’m happy to report that the industry is stepping up in two ways. First, the Oregon Beverage Recycling Cooperative (OBRC) at last began a public-awareness campaign this spring called “Know Your Nickel.” http://www.knowyournickel.org, with radio ads and billboards telling consumers, “Don’t Trash It, Cash It!” It’s a good start.
Second, they are steadily increasing the number of specialty redemption centers, where consumers can either use redemption machines or use the new EZ Drop system, which allows consumers to drop off their redeemable bottles and cans in a labeled bag. The redeemables will be counted and the refund will be credited to the consumer’s BottleDrop account. Account balances can be exchanged for cash at the nearby participating grocery stores or at any BottleDrop center
I’m pleased to report that HD45 residents living in the eastern part of the district now have a center close at hand—in a little shopping center at the corner of NE 122nd and Glisan. I can tell you that it’s clean and very convenient. I toured the facility the day before its opening on August 13th, and can tell you that people were already dropping off cans and bottles even before the opening!
The trade-off for consumers is that supermarkets within a one-mile radius of the center will no longer be accepting containers for redemption. In order to free themselves of that burden, the grocers are sharing the cost of the purchase or rental of the space for the facility. My hope is that consumers will be able to use this same EZ Drop system at grocery stores as well (as is the practice in Maine) to make redemption that much more convenient.
OBRC is hoping that the combination of redemption centers and increased awareness will dramatically improve redemption rates. Let’s hope so.
For more information about the new centers and the BottleDrop system in general, check out their website: http://bottledropcenters.com/
Celebrating Labor Day – Hands Across the Bridge
This Monday, September 2nd is Labor Day. That afternoon I’ll be at the annual Labor Day Picnic at Oaks Park, spending time with union brothers and sisters and their families. I’m sure I’ll see some of you there.
That morning is another very special event, celebrating an equally important kind of labor—the arduous, crucial labor of those working to free themselves from addiction and turn their lives around. Hands Across the Bridge is an annual event to celebrate National Recovery Month. Thousands of people will meet on both sides of the Columbia River (last year more than 2500 were there) meeting in the middle and joining hands across the I-5 bridge.
This year, I’m again honored to have a chance to speak at the beginning of the event, and I’m really looking forward to it. This year’s theme is Join the Voices of Recovery on Pathways to Wellness. We’ll be celebrating the new opportunities for treatment that will become available with the Affordable Care Act and Medicaid expansion this coming year. I’ll be talking about the Health Care for All Oregon Act, our version of a single payer healthcare system, which would guarantee affordable universal coverage, preventative care, and quick access to treatment programs.
The kickoff is at 10:00 AM, and you can find out more info at www.handsacrossthebridge.org/.
It is a tremendously inspiring event, and I encourage you to attend.
Happy Labor Day to all!
Michael
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