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Dear friends,
As the Legislature enters its final week of the 2024 "short" session, we're spending more hours in the Senate chamber voting on bills. During the floor session on March 1, and in a meeting of the Joint Committee on Addiction & Community Safety Response on February 27, I voted "no" on HB 4002A, which will recriminalize drug possession of user-amounts in Oregon. Following dozens of hours of engagement with the committee's co-chairs and the Legislature's presiding officers, my vote in opposition was based on a number of factors. Please read my full vote explanation below.
Below you will find information on:
h Below you will find information on:
- HB 4002A Vote Explanation
- March Revenue Forecast
- OED Launches New Unemployment Insurance System
- New Kiosk at DOR Eugene Office
- ODVA Seeks Candidates for Veterans Advisory Committee
- Unclaimed Property Program
I hope this information is helpful and informative for you or someone you know. As always, feel free to share your comments, questions or concerns with me by phone, mail or e-mail.
HB 4002A Vote Explanation
HB 4002A will recriminalize the possession of user-amounts of controlled substances into perpetuity. This goes against the will of the voters when they passed Ballot Measure 110 (M110) in 2020. I understand the need for – and would have supported – a temporary recriminalization to allow the necessary time to get treatment facilities opened around the state.
HB 4002A will reinstitute the "War on Drugs" against people who suffer an addiction to controlled substances. Substance-use disorders involving controlled substances are behavioral health and medical issues that can only be addressed the same way we deal with people suffering from alcohol addiction — through treatment and not through our criminal justice system or the threat of jail time. We don't threaten an alcoholic with jail to get them into treatment! I must state: We’re talking about people suffering from addiction, not those committing other crimes such as dealing or manufacturing controlled substances.
Currently, the state is experiencing a severe shortage of public defenders to handle current cases. In fact, there are more than 2,800 individuals charged with criminal conduct who are eligible for a court-appointed attorney, but who don’t have access to one. Of that number, 170 are currently in custody without an attorney! HB 4002A is expected to compound this problem by adding more than 2,000 cases into the Oregon courts. Who will get an attorney? Who will not? This will cause more delays and dismissal of cases. The same can be said for probation officers. We already do not have enough for those already in the criminal justice system. HB 4002A will compound this problem.
Another reason I was not able to support HB 4002A is that it conflicts with evidence-based research and practices. According to a recent Portland State University (PSU) study:
- Drug overdoes are not attributed to M110 – they are from the impacts from COVID and the national fentanyl crisis;
- M110 had no detectable effect on violent crime; and
- Even though there was some increase in property crime, it was not any greater than what other states that haven't decriminalized user-amounts of controlled substances experiences during the same time frame.
As the PSU study concluded: Recriminalization is not supported by the available data. This is why I would have only support recriminalization for a short period of time. Again: We must address the open use issue that our state faces while getting treatment facilitates in place to address the addiction crisis.
My next objection is how quickly recriminalization is set to occur: September 1, 2024. This is too short of a period to get treatment centers up and running statewide. Knowing it took approximately two years for facilities to begin operating under M110, I don't hold out hope that rollout will be any faster.
Further objections include lack of equal protections and adverse impact on people of color. Since county deflection programs are optional, an individual allowed to enter deflection in one county will never go into the criminal justice system where a county that doesn't have a deflection program will put a similarly situated person directly into the criminal justice system. The data clearly shows people of color and people of lower means (low-income) will continue to make up a disproportional number of individuals in the criminal justice system! (See: CJC Racial & Ethnic Impact Statement – HB 4002-24.)
Lastly, the voters wanted the Legislature to deal with the open use of controlled substances in our communities. Instead of addressing this issue, the Legislature decided to revert to the failed policy of the War on Drugs by recriminalizing a user-amount of controlled substances.
For these reasons and those I raised during the floor debate, I voted "no" on HB 4002A.
March Revenue Forecast
Another robust economic and revenue forecast was released at a joint meeting of the Senate and House Revenue Committees by the Oregon Office of Economic Analysis (OEA). While our economy is headed toward a strong landing, inflation is cooling and the Legislature is targeting investments in homelessness, affordable housing, and fixes to the drug crisis. Below is a summary of the forecast.
Revenue Outlook
2023-25 Net General Fund resources are up $558.5 million from the December 2023 forecast. The 2023-25 General Fund ending balance is now $1.6 billion versus December's projected ending balance of $1.1 billion. Lottery revenue for the 2023-25 biennium is down $1.4 million from the December 2023 forecast.
Reserve accounts are currently at $790 million (Education Stability Fund) and $1.4 billion (Rainy Day Fund). The projected ending balances for the 2023-25 biennium reserve account are as follows: Education Stability Fund ($1 billion) and Rainy Day Fund ($1.6 billion). The Rainy Day Fund is projected to receive $318.7 million following the end of the 2023-2025 Biennium.
Kicker Outlook
No personal kicker is projected for 2025-2027 at this time. Corporate tax revenue of $533.1 million is projected to be dedicated to K-12 education spending in 2025-2027.
OEA Economic Outlook
Historically, inflationary economic booms have not ended well. The pandemic is increasingly looking like the exception. Inflation has cooled and is near the Federal Reserve's target. The Fed is indicating they will cut interest rates this year, but appear to be in no real hurry given the economic strength.
So far this cycle, Oregon's productivity gains have outpaced the nation, while local job growth is in the middle of the pack across states. The recently released 2023 population estimates show that Oregon's population continued to stagnate during the pandemic. In the decade ahead Oregon's population is expected to rebound, but grow at just 0.6 percent per year. This lower population forecast feeds directly into a relatively smaller labor force and a bit less personal income earned in the years ahead.
Oregon's state revenue outlook remains stable heading into the personal income tax filing season. The underlying economic outlook is relatively unchanged, and collections are tracking closely to expectations. Compared to the December 2023 forecast, General Fund revenues are raised $76 million. However, total available resources are increased $558 million in large part due to accountants closing the books on the previous 2021-23 biennium. Unspent allocations last biennium revert to the General Fund, boosting resources in 2023-25.
Although overall revenue collections are matching expectations, there have been some notable surprises. The most significant of which is the persistence of the six-year boom in Oregon's traditional corporate income and excise taxes. Tax collections have far outstripped growth in underlying corporate profits. The longer the surge in collections persists, the more likely it becomes that tax reforms enacted at the federal and state levels have permanently increased Oregon's corporate tax base, and that the step up in collections will remain with us going forward.
OEA's Corporate Activity Tax Projections
Oregon's new corporate activity tax (CAT) went into effect January 2020. The tax was designed to generate approximately $1 billion per year in new state resources, or $2 billion per biennium. According to the March 2024 outlook, the corporate activity tax is expected to generate around $2.8 billion during the current 2023-25 biennium. Strong consumer spending and the inflationary environment have both played roles in the large amount of collections.
Given the lack of historical experience, the outlook for the corporate activity tax remains uncertain. However, since the CAT is a tax on consumption, collections will prove to be less volatile than Oregon's dominant income taxes over time. The outlook for CAT collections is further complicated by lags in filing and the processing of tax returns. Only in January of this year was return data for the 2021 tax year made available. Also, the pattern of collections changed drastically in 2021, with firms being allowed to file returns based on their own fiscal years rather than on a uniform April filing deadline. In addition, as a new tax, the number of CAT filers continues to grow as more firms are made aware of their liability. For the current 2023-25 budget period, the outlook for CAT collections has been increased by $43.4 million. The revenue forecast for future tax years have been revised upward as well.
OED Launches New Unemployment Insurance System
The Oregon Employment Department (OED) launched a brand new, secure online system for Unemployment Insurance (UI) benefits that went live in Frances Online on Monday March 4. This new system is the result of years of focused listening, work, and testing.
Frances Online offers features that will provide a better customer service experience for UI claimants, according to OED. It's also mobile-friendly. Claimants will be able to do a lot more online through self-serve features, instead of waiting for a letter in the mail or calling the UI Contact Center.
Following a planned service outage, all systems and phone lines reopened Monday, March 4, at 8 a.m. OED's dedicated teams have worked to ensure a smooth migration and to restore all services on March 4. A detailed timeline is available, here.
New Kiosk at DOR Eugene Office
Taxpayers in the southern Willamette Valley can now file their returns using a special kiosk set up in the Eugene Regional Office at 1600 Valley River Drive, Suite 310 in Eugene. The kiosk can be used to file taxes through free fillable forms and Direct File Oregon e-file options.
The Eugene office is open from 8 a.m. to 5 p.m., Monday through Friday (closed for lunch 12:30-1:30 p.m.) No appointment is necessary. Use of the computer to file taxes is on a first-come, first-served basis. Employees cannot help prepare returns but can answer basic questions.
E-filing is the fastest way for a taxpayer to get their refund. On average, taxpayers who e-file their returns and request their refund via direct deposit receive their refund two weeks sooner than those who file paper returns and request paper refund checks.
Separately, all Oregon resident taxpayers preparing their own returns in 2024 can file electronically at no cost using one of Oregon’s free file options. Oregon Free Fillable Forms performs basic calculations and is ideal for taxpayers who don’t need help preparing their returns and want the convenience of filing electronically. The IRS offers a similar option for filing federal taxes electronically.
New this year, the department is also offering Direct File Oregon, which allows taxpayers to file their Form OR-40 through Revenue Online. Direct File Oregon is not currently linked with the IRS Direct File. Taxpayers will need to file a separate federal return with the IRS before filing an Oregon return with Direct File Oregon through Revenue Online.
ODVA Seeks Candidates for Veterans Advisory Committee
The Oregon Department of Veterans' Affairs (ODVA) is seeking interested veterans to fill current and future vacancies on the Veterans Advisory Committee. The Advisory Committee was established in 1945 at the agency's founding and holds a distinct and fundamental role in advocating for veteran issues, sharing insight on veteran concerns and advising the director of ODVA. The committee is composed of nine military veterans appointed to four-year terms by the Governor.
Governor Kotek is committed to ensuring that all Boards and Commissions represent diverse Oregonians by age, race, ethnicity, gender, and LGBTQIA+ status. To ensure a broad and diverse pool of candidates to consider for appointment, ODVA is seeking applications from interested members of the veteran community from both rural and urban areas, across diverse backgrounds and eras of service.
The quarterly advisory committee's meetings are held virtually and in-person throughout the state on the first Wednesday in March, June, September and December. Interested veterans from all branches of the U.S. Armed Services are encouraged to apply. The application process can be reviewed and accessed at the Governor's Boards and Commissions webpage at https://www.oregon.gov/gov/Pages/board-list.aspx. (Follow the application instructions for "External – New Applicants" and be sure to include a resume, a short personal biography that includes your military service and other veteran community activities you have or are currently involved in, and fully answer the supplemental questions. Only complete applications will be considered.)
ORS 406.210 also states that the executive committees of congressionally chartered veterans' organizations that maintain an Oregon state headquarters may submit a list of up to three veterans to be considered for Advisory Committee openings to the ODVA Director's Office at odva_vaac@odva.oregon.gov. All nominees must still apply through the normal application process by the application deadline.
Applications or nominations for the Advisory Committee must be submitted to the Governor's Executive Appointments office no later than March 29, 2024. Questions about this recruitment process may be directed to ODVA at odva_vaac@odva.oregon.gov. More information about ODVA's Veteran Advisory Committee can be found online at www.oregon.gov/odva/Connect/Pages/Advisory-Committee.aspx.
Unclaimed Property Program
(From the State Treasurer)
Oregon's Unclaimed Property Program has been helping Oregonians access their unclaimed funds for more than 60 years. Since the State Treasury began managing the program in 2021, its goal has been to connect more Oregonians with money the state is protecting on their behalf.
Unclaimed property is any asset — such as uncashed checks, forgotten security deposits, tax refunds, and more — being held by a business, nonprofit, or government entity for which the owner cannot be found. When an organization is unable to contact or return unclaimed property to an owner after some time, usually one to three years, they must report the property to Treasury to be held until claimed by its rightful owner. Over the last 25 years, the Unclaimed Property Program has returned more than $500 million back to individuals.
With nearly 1 in 7 people having unclaimed property, the State Treasury recently launched "Checks Without Claims" initiative, an effort that will result in more than $10 million in unclaimed funds proactively returned to over 18,000 individuals.
You can visit the Unclaimed Property Program website and search for any unclaimed property under your name. Searching is free and easy, and you never know how much unclaimed funds the State Treasury might be holding for you.
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