Legislative budget writers start reviewing cuts, hearing from public

Oregon State Capitol.

Oregon lawmakers were poised Monday to achieve their special-session aims by cutting spending and rebalancing the state budget, and passing other bills affecting unemployment claims and further limiting police use of chokeholds.

The main committee for the Legislature’s second special session this summer pushed through most of the bills during a six-hour meeting on Monday. Members did so despite complaints about access restrictions resulting from the coronavirus pandemic, which has closed the Capitol in Salem to the public.

“We cannot continue to do public policy with no committees and no public input,” Senate Republican Leader Fred Girod of Lyons said.

The 10-member committee handled 11 of 13 bills, including all related to the budget, that Democratic legislative leaders had drafted for the session. Most of the debate was not about the budget, but over bills relating to unemployment claims.

A different six-member panel cleared a bill (House Bill 4301) to limit police use of chokeholds by requiring police to give a warning and allow a “reasonable opportunity” for someone to cease resistance. Lawmakers during their first special session in June limited chokeholds to instances where police can employ the use of deadly force. Both bills stopped short of an outright ban on the practice.

Some issues did not make it onto the legislative agenda.

Among them was legislation to disconnect Oregon’s tax code from three federal tax breaks included in the CARES Act. Supporters said it would recoup potential losses of $225 million for state coffers, but business groups argued that the federal provisions were designed to lower their tax liability and let them retain needed cash. The House Revenue Committee heard the proposed bill on Thursday.

Also left hanging was whether lawmakers should approve a liability shield for businesses, schools and others against lawsuits arising from the coronavirus pandemic.

Budget work

Lawmakers did much of the budget work weeks ago, after budget committee leaders unveiled their plan to eliminate a gap of more than $1 billion between declining tax collections and previously approved spending for the current two-year budget. Budget subcommittees heard testimony July 22-24.

The plan maintains a $9 billion state school fund — about half of which already is spent — but lawmakers will have to draw $400 million from an education reserve to do it. About $400 million will be left in that reserve, and lawmakers do not plan to tap the state’s rainy-day fund, which will be just under $1 billion by mid-2021.

The main bill cuts $481 million in other spending from the tax-supported general fund, including debt repayments for building projects that now are suspended. That total exceeds the $387 million target originally set by the budget committee leaders.

“Practically every agency with general fund was reduced,” John Borden, a legislative fiscal analyst, told the committee.

Unlike the original budget-balancing plan, the main bill will leave open two state prisons.

Shutter Creek Correctional Institution, a 260-bed minimum-security prison in North Bend, would have closed in September. Warner Creek Correctional Facility, a 400-bed minimum-security prison near Lakeview, was scheduled for closure at the end of the budget cycle in mid-2021.

The main bill also would leave an ending balance of about $100 million, down from the nearly $1 billion projected for mid-2021, before the pandemic resulted in shutdowns of business activity and public life and ate into tax collections.

The Emergency Board, which consists of 20 lawmakers who handle budget matters between sessions, will have $200 million more for pandemic and wildfire emergencies. The state emergency fund was down to $10.3 million.

Unemployment claims

The main special-session committee cleared two of three bills relating to unemployment claims.

One bill (Senate Bill 1703) will allow the Department of Revenue to share information on tax returns, which are confidential, with the Employment Department. Some sharing already takes place, and for regular claims against the state unemployment trust fund, the Employment Department can check payroll records of wage earners. But without this bill, the Employment Department was slowed in processing claims by people that the CARES Act made newly eligible for unemployment benefits in a federal program. Among them are self-employed people, independent contractors and freelancers, gig and temporary workers. Many do not have payroll records but all have filed tax returns.

A second bill (Senate Bill 1701) will allow a higher threshold for earnings — $300 per week, rather than 10 times Oregon’s minimum wage at $132.50 — before unemployment benefits are reduced. This change will expire at the end of 2021.

State Labor Commissioner Val Hoyle put forth the idea after she consulted with her counterpart in Georgia. She said the change would allow some workers to earn more money without losing benefits, and some employers to take on more workers.

It won the endorsement of Jason Brandt, president of the Oregon Restaurant and Lodging Association, who said, “We decided to share our position because we think this is the right thing to do.”

Oregon’s leisure and hospitality industry has been affected most by the pandemic downturn.

A third bill (Senate Bill 1702) failed. It would have facilitated unemployment benefits for employees of public and private schools other than teachers, researchers and administrators — maintenance workers, cooks and other staff — and removed them from state adjudication of claims that usually takes weeks.

Four of five House members on the committee voted for it, but Democratic Sen. Betsy Johnson of Scappoose joined two Republican senators to oppose it. The bill required majorities from House and Senate members to advance.

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