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The fork already taken

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This column originally appeared in the News-Register of McMinnville, Oregon, on February 2.

This year’s Oregon legislative session, which begins today, took its biggest fork in the road well before it even convened, on January 23.

That was when voters across the state passed, by a landslide, Measure 101, upholding the taxes approved last year which helped underwrite a big chunk of Oregon Medicaid costs. The measure was a tax increase, of .7 percent on large hospitals and 1.5 percent on most health insurance policies. This plan was supported by the health industry in the state, which recognized that the income from matching federal payments would amount to more than would be paid in taxes (much of which could be passed on to consumers).

If the measure had lost, a huge revenue gap would have opened, along with the risk of health insurance loss for hundreds of thousands of Oregonians, and dealing with that immediately would have become the major and almost only topic for the short session. As it is, an opening for more subjects has appeared. [[referred portions of the law account for between $210 million and $320 million in state revenue, the loss of which could have resulted in possible reduction of federal funds by between $630 million and $960 million. ]]

Not that the cost of health care will vanish from the lawmaking scene. Complaints about last year’s Medicaid funding bill focused more on the tax structure than the need to pay, so adjustments to the formula might still be proposed. Voters almost surely were expressing more a desire to keep the insurance system alive than they were the specific tax plan.

And House Minority Leader Mike McLane said in a statement after the vote, “We must now shift our focus to improving efficiencies within the Oregon Health Authority and in the administration of the Oregon Health Plan. I hope legislators on both sides of the aisle will make it a priority to safeguard and protect the investment in our state government that Oregon taxpayers have affirmed.” That will likely become a subject for discussion.

As will the next Medicaid-related shortfall, which is expected in another couple of years, and many legislators may want to begin planning for that this year.

Short sessions usually have a lot to do with budget numbers, and Senate President Peter Courtney, D-Salem, was quoted as saying, “Our budget focus must now shift to the February forecast and the effects federal tax changes will have on state revenue.”

Some participants in the session may try to take another crack at long-running budget issues. Mark Johnson, until last year a state representative and now the new president of the Oregon Business and Industry group, noted in one commentary that, “the costs associated with funding the Public Employees Retirement System (PERS) will continue to consume ever-larger chunks of the state budget until action is taken, and that means less money for classrooms and vital services.” He indicated that may be a focus for his group, though it has proven a stubborn issue for years on end, including in longer sessions.

More than budgeting will come up this session.

A good bet for the top non-budget issue, which already has lots of lobbying to back it up, is talk about a state “cap and trade” (or “cap and invest”) system.

Two bills, one in the House and one in the Senate, already have been prepared and released as “legislative concepts”. The whole of the system is complex, but the core of it would involve a limit on greenhouse gas emissions with mandates that large producers buy “allowances” – in a sense, a kind of greenhouse gas marketplace. Payments would be involved, and those would be used to cover efficiencies, help with consumer costs and shore up communities hit by global warming. The hope is that over the years, emissions would be reduced gradually through a system of incentives.

The concept at least has backing from Governor Kate Brown and House Speaker Tina Kotek.

A good deal of money could be at stake, so the basis for intense lobbying is clear. And strongly-worded arguments on both sides already are shaping the debate.

There will be more. Affordable housing has become an increasingly heated subject, especially in the Portland area but elsewhere too, and some effort to deal with it may come up.

In education several legislators (including Democratic Representatives Brian Clem of Salem and Margaret Doherty of Tigard) are suggesting requiring that class sizes be included in labor contract negotiations.

One lobbyist noted that as coordinated care organizations (for regional health care) look ahead to negotiating new service contracts, they may look to the legislature for adjustments in how they are financed.

The recent federal action on solar panel tariffs could lead to some state response on that subject, in a state where solar energy has become increasingly important.

All of this will be happening in a context of something institutionalized – by calendar – and something unusual:

The normal and unavoidable part is that the 2018 session will happen quickly – it will last only about a month – and in an election year. That normally is a prescription for dealing with necessities and emergencies, mainly of a financial nature, and not a lot else.

And there’s an unusual factor: the large number of new people involved, or people who have been around the statehouse but are moving to new positions. An especially large number of legislative personnel changes happened in recent months, including a new Senate minority leader and a new Senate chair on budget.

On top of that, the legislature’s revenue officer, who has held the job for two decades, retired last year.

Sometimes those personnel shifts kick loose legislation that doesn’t ordinarily see the light of day. The odds are this will be a mostly quiet session, with one or two big policy subjects. But then, 2018 may be an unusual political year.
 

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