The scoop on the Big Six

Michael Dembrow

April 18, 2017

Friends and Neighbors,

We’re approaching another big moment in this legislative session.  Today (April 18) is the last date for bills to be voted out of their first chamber. That means that any bill that has not already been voted on (i.e., sent to the floor, or to one of three special committees—Rules, Revenue, or Ways and Means) must be voted on today.  If it hasn’t been voted on and is not scheduled for a Work Session (i.e., scheduled for a committee vote), it is already dead for this session. Technically, a bill that is not voted out of committee by the deadline remains “in committee” for the remainder of the session.  However, since it can never move out, it is effectively dead.  Committees will be meeting this evening to “clear the decks” and keep bills moving through the process.

Many bills have been voted on over the next two weeks, and most will fall by the wayside.  I had 122 bills referred to the committee that I chair (Senate Environment and Natural Resources).  Of those, around 25 have successfully passed from the committee, either to the Senate floor or to Ways and Means (if they required a budget allocation).  The rest will have to wait for another session (though some of them have counterparts in the House that still have life in them).

As you can imagine, the last couple of weeks have been incredibly hectic.  I’ve been pursued by lobbyists, advocates, and other legislators to schedule and pass their priority bills before the deadline.  They’ve been working to convince me that it is essential that these bills stay alive, so that they can pass this year.  And I of course am doing the same with my priority bills that are in other committees.  Crazy days.

Fortunately, just about all of my own priority bills are still in play, either as Senate bills or as House bills.  I wish I could say the same for all the bills in Environment and Natural Resources.  There are a number of good, important bills, addressing really important environmental issues, that were unable to secure the votes to be successful. 

Generally speaking, we don’t schedule a bill for a work session if we know that the bill does not have majority support in the committee or have a good chance of passing on the floor.  Sometimes a bill fails for financial reasons—it creates a program that will cost too much to implement in the short run (even when it might lead to savings in the long run), very difficult to do in a tough budgetary year like this one.  Sometimes a bill is a new, intriguing concept that isn’t fully worked out or just needs more time for people to get used to; most bills of any significance take two or three tries  before they pass.  And sometimes—this year in particular--a bill is felt by some members to too controversial (politically and ideologically) as we are seeking bipartisanship.  I’ll talk more about that below.

Next week I’ll give you a list of which of my bills are alive and which are not. 

As always, if you have any questions about the status of any bill, please email us, and Logan, Elisabeth, one of the interns, or I will let you know.

"The Big Six" -- What are they?

Affecting nearly all our bills, hanging over our heads the entire session, are what we are referring to (not quite) fondly as “The Big Six,” the six issues that we know will need to be resolved before we can go home in early July (July 10 to be exact). 

#1:  The Budget

As I’ve mentioned before, we’re currently facing a $1.6 billion shortfall right now. (It was $1.8 billion at the beginning of the session, but our last economic forecast showed that we can expect $200 million more in additional tax revenues next biennium.)  Merely to continue the same programs that are currently in place, we need to make up this shortfall, either through program cuts, additional revenue, or both.

What is the cause of this shortfall?  It’s ironic that we face this shortfall even as our state economy is doing great as a whole.  It’s the result of a combination of the loss of one-time federal dollars (given for healthcare innovation), an increase in the state’s share of Medicaid costs, legacy public pension (PERS) obligations, and the cost of new programs the voters created by passing expensive ballot measures in November (Outdoor School and a big ramp-up in high school completion programs and high school career/technical programs). 

Unlike the federal government, our state government is required to approve a balanced budget before the next budget biennium.  Expected revenues and expected expenditures must balance out.  So, we either balance the budget by finding $1.6 billion in cuts or $1.6 billion in new revenue, or—more realistically—a combination of the two.  Hence, #s 2 through 5 below.

#2:  Cost Containment

In my experience, we are always looking for ways to make our state programs for effective and efficient, while providing Oregonians with the services that they need and treating state workers fairly.  This year, given the budget shortfall, striking the right balance is both more urgent and more challenging. 

Since most public work is people-driven (think teachers, health care professionals, police and fire, case workers), cuts to programs fall hard on the people doing the work, both through layoffs and reductions to their expected compensation.  But that’s what’s being discussed, and it’s a tough conversation. 

On the table are cost-containment changes to state worker and educator health plans (PEBB and OEBB respectively).  Under discussion is moving them to the Coordinated Care Organization (CCO) system that is in place for people on the Oregon Health Plan (Medicaid).  I know that there’s concern out there among employees that this will lead to a lesser quality of care and less choice of providers.  I’ll let you know more as these discussions continue.

Other strategies on the table include administrative consolidations and elimination of certain tax credits.  If done right, these can make a lot of sense.

#3:  PERS

Another major cost-containment strategy being discussed is a change in the state public retirement system.  Without a doubt, increases in legacy Tier 1 costs are contributing to the shortfall.  However, as I explained in a previous newsletter, our legal options for containing these Tier 1 costs are few and will contribute little to reducing the shortfall. As I mentioned, we can do nothing to change the benefits existing retirees, nor can we make changes that affect the benefits current workers have already earned.

We can make changes for new employees or for benefits accrued in the future, but they won’t help us with our current shortfall. 

#4:  Provider Tax

We are working with hospitals, insurance companies, and Coordinated Care Organizations to help offset the big increase in our Medicaid expeses.  I’m happy to say that these discussions seem to be going well.  It’s clearly in their interest to see a solvent Oregon Health Plan with as many low-income people in it as possible.  For example, to keep their nonprofit status, hospitals are required to provide charity care to anyone who is unable to pay.  With the big expansion of the Medicaid that was part of the Affordable Care Act, hospitals quickly found their charity care obligations lowered, along with having to collect on low-income families in medical bankruptcy.  Most hospitals in the state, certainly the larger, urban ones, have benefited greatly and are willing to help solve that part of the shortfall due to increased Oregon Health Plan costs by taxing themselves. 

In addition, higher healthcare provider payments will result in higher federal matches.  In total, we are hoping to make up more than half of the $1 billion of the shortfall that is due to healthcare costs. 

To the extent that these contributions are considered new taxes, the necessary legislation must begin in the House and must be approved by a 3/5 supermajority of both chambers.  That leads to challenges I’ll discuss further in #5.

#5:  New Revenue

Our Revenue Chairs (Mark Hass in the Senate and Phil Barnhart in the House) are working hard to create a revenue package that can pass both chambers.  Senator Hass is taking the lead on discussions with the business community to pass a version of Measure 97, utilizing corporate gross receipt taxes, which failed in November.  At the time, we heard from opponents that the proposed tax in M97 was too large, focused unfairly on large corporations, and should have been created by the Legislature through a deliberative process.  The Revenue committees are working to address all of these objections, along with business leaders who recognize a need to increase the share of state support provided by the corporate community if we are to avoid further unacceptable cuts to education and vital services to those in need.

Nevertheless, as reported by The Oregonianwe’re already seeing an effort by some in the business community to sabotage this effort.  The hidden backers of this effort are arguing that this tax will be completely passed on to consumers, and thus is effectively a sales tax, which we know Oregonians traditionally don’t like.  By this logic, any attempt to bring corporate contributions back to where they were twenty years ago is a sales tax. This is a specious argument. But it’s complicating things.

Given the political makeup of the Legislature, in order to pass a revenue bill, which requires a supermajority), we must have at least one Republican senator and one Republican representative vote in support.  Thus, if the minority party stays united and “locks down” to vote as a block, they can create political leverage that forces the majority party to listen to them. (We’re seeing this same phenomenon playing out at the federal level, particularly in the Senate.)  

Republican leadership has made it clear that they will not agree to new revenue until they are satisfied that we have done enough cuts and made what they consider adequate changes to PERS.  Some of these program cuts will be unacceptable to Democrats.  However, some of the cuts proposed initially will also be unacceptable to some of their members, so it may well be a challenge for the Republicans to hold together.  At this point, it’s impossible to say where we’ll be at the end of the session.

#6:  Transportation

We entered this session knowing that we need to reinvest in transportation infrastructure in this state.  Our roads are in bad shape, many bridges are seismically unsound, congestion in the Portland metro area is a real problem, transit (including senior transit) needs to be expanded, including in our rural areas.  Plus, the jobs that a serious transportation program would create will stimulate our economy in a productive way.  

So, this is a top priority for most legislators, and has already been the focus of an enormous amount of work (including many late night meetings at the Capitol).  But success may again prove elusive.  The funding for this package will necessarily involve new revenue (mainly through a gas tax, but potentially also through a small payroll tax to fund transit, increased registration and new car fees, and highway tolls in the Metro area).  It needs to be big enough to make a difference, but it also will require bipartisan votes (since it is new revenue).  Every vote will count.

If it only involves road expansions, it won’t be acceptable to legislators who feel that it needs to include multi-modal elements that reduce dirty diesel and greenhouse gas emissions (e.g., shifting drivers to transit, rail, cycling/pedestrian) and enhance pedestrian safety.  As you can imagine, I include myself in this group. 

But we still have some in Republican leadership who are insisting that in return for their support we must eliminate or significantly roll back the state’s low-carbon Clean Fuels program, designed to fight climate change.  For many of us, that’s a non-starter.

And As A Result:

Things are not easy in Salem.  Requirements around the “Big Six” are coloring all of our bills, not just those related to the budget and transportation.  The need to achieve bipartisanship can certainly be a good thing—forcing us to find compromises that really are better public policy.  But the threat of withholding support for revenue and transportation as a result of disagreements over any issue has the potential to give the minority party veto power over everything we do, essentially killing sensible policies that are favored by the great majority of Oregonians. 

As a member of Senate Leadership, I can tell you that we are working hard to work productively with our Republican colleagues.  Aside from the necessities mentioned above, they represent rural parts of the state about which we care deeply.  At times they will bluff, and at times we will have to call their bluff.  At all times we have to try our best to remain true to our deep values.  At all times we have to be prepared to be creative in finding acceptable compromises. 

It’s objectively a fascinating process, but an extremely difficult one.

Suction dredge mining restrictions pass the Senate

Last Monday the Senate voted at last to pass SB 3, the bill that prohibits the practice of suction dredge mining from waters of the state that contain sensitive fish habitat.  As Chair of the Environment and Natural Resources Committee, I worked hard to get this bill into a workable form that could achieve what needed to be done and get the votes necessary to pass it.  We were unable to get there in 2015 and 2016, despite enormous effort by the late Senator Alan Bates from Ashland, a passionate fisherman until his final moments of life. 

I carried the bill on the Senate floor.  If you’re interested, you can read my floor speech here.  The bill ultimately passed on a solid 21-9 vote, with four Republicans joining all seven Democrats.  I’m sure Doc Bates was grinning at us from wherever he is as the final votes were taken.  It was my proudest day of the session so far.

Rally for Health Care for All!

This Thursday, hundreds of Oregonians will be converging on the Capitol in order to draw attention to efforts to create single payer, Medicare for All health care in this state.

They will gather on the West Capitol steps in Salem at noon to rally and prepare for that day’s hearing of the Senate Health Care Committee from 1 to 3 in Hearing Room B.

During the first part of that hearing, committee members will be presented with the results of the RAND study on health care financing that was prepared for the Legislature.  As I  mentioned in an earlier newsletter, the study reveals the challenges to implementing a single payer model at the state level, but also reveals the enormous benefits if those challenges can be worked out.  By using a single payer model, everyone in Oregon could be covered without high-quality insurance, without our spending any more than our current system, which leaves out more than 200,000 residents.

You can read the report at http://www.rand.org/pubs/research_reports/RR1662.html

The second part of the hearing will be a public hearing on the 2017 Healthcare for All Oregon Act (SB 1046).

We are continuing to work on this bill to get it into a form that’s ready for passage by the Legislature, or, more likely, a referral to the voters.

One piece of good news:  We have more senators and representatives as sponsors of the bill than ever before!  Just over one-third of all Oregon legislators are sponsoring SB 1046.

Of course, we wish that Healthcare for All could be implemented at the federal level.  That will make our job here in Oregon much easier.  Representatives Blumenauer, Bonamici and DeFazio have all co-sponsored HR 676, the Expanded and Improved Medicare for All Act.  But we know that the prospects for passage—or in fact any help from the federal government on positive healthcare reform anytime in the future—are dim.

That’s why it’s so important for us to focus on state-based solutions.  We are not alone in this effort.  The California, New York, New Mexico and other legislatures are pursuing single payer health care bills this year. More than 20 states are working on systems that would ask for waivers from the federal government to innovate towards universal state systems.

If this is an issue of interest and passion for you, I hope you’ll come down and join the crowd.  If you can’t do that, remember that you can watch or listen to the hearing as it’s going on or after the fact.  Just go to OLIS, the Oregon Legislative Information System. 

Also, there are two other opportunities for you to hear the details on the RAND study:  there’s a public presentation by the RAND folks on Wednesday (April 19) at the Oregon State Library, located right next to the Capitol, 9-11 am.  Second, they will be presenting to the House Health Care Committee on Wednesday afternoon sometime from 3 to 5 in Hearing Room B.

Deepest condolences to Sen. Baertschiger

As you may have seen in the news, tragedy struck one of my Senate colleagues over the weekend.  Senator Herman Baertschiger from Grants Pass lost his wife Saturday in a sudden accident.  It’s Sunday as I write this, so I’m still in quite a state of shock.

Much of the content of this newsletter refers directly or implicitly to partisan differences and disagreements.  However, much of the work in the Legislature is a function of human relationships that transcend party affiliation.  That’s particularly true of the Senate, where there are only 30 of us in all.  Our committees are small, just five of us on each.  Sen. Baertschiger and I serve together on Environment and Natural Resources. We spend a lot of time together. 

Herman and I are probably as politically different as any two senators, or at least that’s what you would glean from reviewing our voting records.  But I can’t think of a conversation I’ve had with him that hasn’t ended with a smile, even when we agree to disagree.  

My heart goes out to him and his family.

dembrow signature

Senator Michael Dembrow
District 23


email: Sen.MichaelDembrow@oregonlegislature.gov
web: www.senatordembrow.com
phone: 503-986-1723
mail: 900 Court St NE, S-407, Salem, OR, 97301