Tuesday, March 13, 2007
Links to Key Bills
Senator Morse testified on SB 697 in Senate Committee on Finance and Revenue
Senator Morse testified on SB 27 in Senate Special Committee on Health Care Reform
Saturday, June 30, 2007
The close of session is a time of many mixed emotions. Relief, frustration, and satisfaction are all rolled up into one overwhelming sigh that the work of the 74th Oregon Legislative Assembly is now done. Leaving a review of the over-all performance of the legislature to the political pundits, I would like to focus this end of session newsletter on the issues that occupied a special focus of my time and the assistance of my very capable staff.________________________________________
COMPREHENSIVE FISCAL REFORM
Tax Reform
How we collect, budget, spend and save our tax dollars was a major focus of my efforts this session. With respect to tax reform, I was disappointed that the assembly chose to focus great energy on increasing taxes around the margins for such items as cigarettes, beer, the corporate minimum, and auto insurance as opposed to working on systemic reforms. The cigarette tax did not receive the three-fifths majority required to increase taxes by statute and subsequently was amended into a constitutional referral to the voters to add $.84 per pack into the Oregon Constitution. The Oregon Constitution should never be the tool for specific tax plans.
In hindsight, the chemistry of this session was not right to advance major tax reforms. What we did accomplish was an amendment of HB 2530 into a comprehensive ongoing process with a mandate to find solutions and draft legislation for consideration by the ‘09’ legislature. The Task Force on Comprehensive Revenue Restructuring will be composed of 30 members, of which 13 members will be ex-officio. The Governor will appoint the Chairperson, 4 members who represent the different geographic regions of Oregon, 1 from small business, 1 from large business, and 2 from organized labor. There will be 4 members from the House and 4 from the Senate. The ex-officio members will include the State Treasurer, 2 members from Oregon’s business trade associations, 2 members from Oregon’s labor associations, 2 members from taxpayer associations, 2 from the chambers of commerce, 2 from the League of Oregon Cities, and 2 from the Association of Oregon Counties.
The task force will be assisted by what is called the Oregon Revenue Advisory Council consisting of 7 members who represent accountants, economists, and tax attorneys who are professionally involved in tax issues.
The scope of work of the task force will be much broader than past tax reform efforts to include revenue restructuring for local as well as state government. The compression of Measures 5, 47 and 50, the eventual demise of federal timber payments to rural counties, the increasing burden of property taxes on fixed income homeowners, the volatility of income tax revenues, and the large untaxed components of our economy, (evaded taxes, underground cash economy, and tourists), all combine to create a compelling need to build a solid financial foundation for our state. The bill passed each chamber with only one no vote in each chamber and awaits the Governor’s signature.
Budget Reform
Crafting the state budget is always a contentious issue. We introduced SB 474 with Senator Schrader, Co-Chair of Ways and Means to provide greater discipline, accountability and transparency in the budgeting process. We had previously introduced this concept in the 05 session and received a strong majority vote in the Senate only to have it die in the House without a hearing. This session, the bill overwhelming passed the Senate but was the next to last bill on the House floor agenda before adjournment. The bill was referred from the floor to the House Revenue Committee, which effectively was a procedural burial process. Significant reform of long standing processes is nearly impossible.
Spending Reform
SB 1039 is a bill that arose from consultations with Ken Miller, author of “We Don’t Make Widgets”. The thesis of his book is that government does in fact make “widgets”, and that the principles of the private sector can be employed in the public sector to achieve performance excellence. The committee will focus on such things as customer and market focus, human resources, leadership, measurement, analysis and knowledge management, process management, results and strategic planning. Critical tasks will involve working with internal and external customers to identify possible improvements to the agency’s systems, such as identifying ways to make core processes operate better, faster and at less cost, creating mechanisms to develop the skills of all agency employees and showing measurable results for the investment that taxpayers have made. The committee will include 4 legislators, 4 from the executive branch and 3 from the private sector who have demonstrated experience in the practice of continuous improvement in business. This bill received near unanimous approval with only one legislator voting no. A $2.5 million special purpose emergency fund reservation has been approved for use in continuous improvement efforts. The bill awaits the Governor’s signature.
Saving Reform
We made some progress in creating reserves, however controversial it may have been, through a one time redirection of the corporate kicker. While approximately $310 million of corporate kicker tax credits will be placed into a reserve fund, we still do not have a good mechanism to build the reserves required to smooth the volatility of our tax system. When we have unanticipated revenues they are returned to taxpayers ($1.2 billion), through Oregon’s one of a kind kicker law, making it very difficult to systematically build reserves. One bright spot of this legislative session is that approximately $170 million has been set aside for an ending fund balance. This ending fund balance stayed below the radar screen for fear that if it became known, the hue and cry to spend it all would be deafening.
LEGISLATIVE REFORM
I served as Vice Chair of the Senate Committee on Legislative Reform which passed some of the recommendations of the Public Commission on the Legislature. Most notably was the first action of the legislature to set the timelines for a much more disciplined session that would end June 29 and reconvene in a special session for the month of February, 2008. We adjourned on June 28. SB 700 creates the Public Commission on Public Compensation. Most notably, it will defer to public citizens, chosen by lot from each of the five congressional districts, plus one member chosen by lot from the entire state to set the compensation for state wide elected office, the judiciary, and legislators. Legislators are reluctant to set their salaries for fear of campaign reprisals. However, adequate compensation that is somewhat above a pledge to poverty is required to provide a broad cross section of Oregon citizens the opportunity for public service.
RECYCLING
We introduced an electronic waste recycling bill in the Senate that essentially mirrored the bill filed by Representative Dingfelder in the House. Since she chaired the House Committee on Energy and the Environment, we decided to collaborate and work her bill rather than both. Ed Wright from my staff played a critical role on the work group that found the common ground supported by all the key constituents. HB 2626 provides an efficient and easy way for consumers to recycle their computers, TVs and CPUs at no cost to consumers. The fact that not nay votes arose along the path of the bill was a credit to a legislative process of inclusion.
HEALTH CARE REFORM
I participated on the interim Senate Commission on Health Care Access and Affordability and then during the session on the Senate Committee on Health Care Reform. What emerged was SB 329, a blue print for health care reform. It creates a process through a Health Trust Board to bring specific plans back to the ‘09’ legislative assembly for consideration. The concepts embody pooled public and private funds, which will be applied to Accountable Health Plans (AHP) that are based on prevention, chronic disease management and evidenced based practices. The AHPs would set a minimum standard for all health plans that are provided through the commercial market. The goal is to make health care accessible and affordable for all.
It is regrettable that former Governor John Kitzhaber’s Archimedes’ SB 27 did not pass. It mirrored many of the components of SB 329, but had a provision which is lacking in SB 329. I was a co-sponsor of SB 27 and believe the bill creates a better platform to address the federal government. It is possible this bill will be worked in the February 08 session.
INNOVATION
I served as one of four legislators during the interim on the Oregon Innovation Council. The Council was composed of many of Oregon’s technology and industry leaders as well as representatives from Oregon’s universities, including OHSU. Their dedication to crafting legislative proposals for this session was exceptional, offering what has been estimated to be in excess of $1.0 million in value of their time. The Council recommended specific innovation projects, including the Oregon Translational Research and Drug Discovery Institute, the Bio-Economy and Sustainable Technologies Signature Research Center, the Food Processing Initiative, the Seafood Initiative, the Manufacturing Initiative, the Wave Energy Initiative, and continued funding for the Oregon Nanoscience and Microtechnologies Institute. I have great expectations that the $28.14 million allocated to these projects will bear considerable fruit.
Last session we created the University Venture Development Fund (SB 853) that provided the university foundations the ability to raise $10.0 million for the Oregon University System ($5 million for OSU) and $4.0 million for OHSU. The purpose of the funds was to provide the earliest stage funding for commercializing inventions and technologies that arise for university research. Language in the original bill needed amending this session and it provided me the opportunity to add an “evergreen” amendment. The charitable contributions to the University Development Fund receive a 60% tax credit taken over three years, which when combined with the federal charitable deduction, will return nearly 100% of the contribution back to the donor. In the original bill, the tax cost of the credit was to be repaid to the Oregon Treasury from royalties and licensing fees that arose from the commercialized inventions, thus making the tax credit self-liquidating. Originally, the fund was capped at $14 million. The amendment I added provided that when royalty and licensing income is received, the university foundations will have the opportunity to raise additional funds equal to the income received. The net effect is a $6.0 million tax cost, perpetual line of credit for the commercialization of university inventions. Over time, I am confident this bill will be a major contributor to the development of our innovation economy. The bill awaits the Governor’s signature.
GOLD STAR LICENSE PLATES
We were fortunate to secure license plates for Gold Star families who have lost members in war. Michael and Terri Thorpe of Tangent asked me last year to sponsor legislation that would provide families who have lost their loved ones in war the opportunity to honor them with a Gold Star license plate. The plate will be distinctive by utilizing a new veterans’ plate. Michael and Terri were present for the bill signing in the Governor’s office.
WETLANDS
Determination of wetlands has continued to be a major source of heartache for many who wish to develop land in Oregon. We introduced SB 544 and through collaboration with the Division of State Lands, developed language which would require the Division to explore the establishment of an Oregon certification program for professional wetland scientists. The problem we are attempting to solve is to have more consistency in determining what are and are not wetlands. There presently are no established standards. The bill has been signed by the Governor.
CAPITAL CONSTRUCTION
I am very pleased that we were able to secure $3.7 million funding for the LBCC Science Building, $2.0 million funding for renovation of the Oak Creek Youth Correctional Facility, $1.0 million for renovation of the Corvallis House that assists in the young women’s correctional transition program, and 13 projects for Oregon State University totaling $131.8 million. The most notable of the OSU projects was $31.256 million for the Linus Pauling Research and Education Building.
The total funding for the Oregon universities and community colleges, including Article XI F bonds (self liquidating investments such as housing) and Article XI G bonds (general obligation) is $561 million.
CONCLUSION
It has been an honor to serve the many constituents of District 8, including Republicans, Democrats, and Independents. There were many days when it seemed as though the results were not commensurate with the effort. But, all in all, we had a good session. Thanks to the many who made their voices known and offered input on the thousands of bills we heard. 2,919 bills were introduced and 975 bills passed. That is a lot to keep up with for sure!! Best wishes for a great summer.
Frank Morse
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NOW WHAT?: INTERIM CONTACT INFORMATION & CAPITOL REMODEL
Now that the 74th Legislative Session is over, there are going to be some big changes happening here in the Capitol building.
The Legislature has approved funding for a restoration of the House and Senate office wings. The wings were built in 1977 and now, 30 years later, various problems and safety issues are mounting. Office sizes do not allow Legislators to have adequate staffing, tap water is undrinkable and furniture is outdated and falling apart. Our partition walls, carpeting, and cabinets are an eclectic mix of blue, orange, purple and pink, and we do not even want to know what’s inside the permanent walls. The State Capitol is a place of history, a place of honor, things that the current office wings do not reflect. With this restoration project, we hope to remedy that.
During the interim and remodel, workstations will be set up around the Capitol to accommodate displaced staff and Legislators. Some offices will be relocating to an annex building in downtown Salem. Laura Campbell, my Legislative Assistant, will continue to staff my office so please refer to her contact information below for any appointment requests, issues or questions you have.
Interim Phone Number: (503) 910-9066
** Please note that voicemails will continue to be retrieved from our
messaging system here at the Capitol. Our Capitol phone number is
(503) 986-1708.
Interim Address: 900 Court St. NE, S-218
Salem, OR 97301
** Mail is forwarded to my staff on a weekly basis.
We are anxious to see the various stages of change that the Capitol building will go through in the coming months. This project is a long time coming and I believe that the result will give you, the people of Oregon, a Capitol building of which to be proud.
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This newsletter is meant to be an informational resource to my constituents during the Legislative Session.
If you know of anyone who would like to receive this newsletter, please e-mail us at sen.frankmorse@state.or.us,
call us at (503) 986-1708, or write to us at 900 Court St. NE, S-218 - Salem, OR 97301
