SDAO is Hard at Work for Members During COVID-19 Pandemic (04/03/2020)
We recognize the increasing pressures on special districts during the COVID-19 pandemic. Our team has been working hard at both the state and federal levels to ensure special districts are considered in relief packages. We have sent this letter to our congressional delegation and will continue to make sure our voices are heard. Read the letter.
Another issue our local governments are facing is the budget adoption processes which requires an extensive public hearings process. Because the Governor's Executive Order 20-12 requires social distancing, many of these statutory requirements for public hearings directly conflict with her order. This could result in local governments not completing and adopting their budgets by June 30th. If budgets are not adopted by that date, those local governments are prohibited from expending money beginning July 1st.
In an effort to address this disastrous result, four local government associations, including Special Districts Association of Oregon, Association of Oregon Counties, Oregon School Boards Association and the League of Oregon Cities, have called upon the governor to use her executive power to provide local governments flexibility during the declared emergency. We have asked the governor to call a special session no later than May 1st to confirm in statute the issues covered in the Executive Order and contained in a legislative draft produced by those same organizations.
We urge you to reach out to your legislators and ask them to encourage the governor to use her executive powers to address local government concerns contained in Legislative Concept 26 Section 16 immediately and adopt those changes in statute by May 1st.
If you don't know who your senator or representative are and how to contact them, please use the following link: https://www.oregonlegislature.gov/findyourlegislator/leg-districts.html
View a copy of the letter that was sent to the governor on April 2, 2020.
2020 Legislative Session Concludes (03/05/2020)
On February 3, 2020, the 80th Legislative Assembly convened for the constitutionally mandated 35 calendar day session. A total of 283 bills were introduced; 188 in the House and 95 in the Senate. Committees were allowed to introduce three bills while Senators were permitted to one bill and Representatives were allowed two bills. As a result, timelines were very compressed. Bills were required to move out of their first chamber's respective committees within 10 days; a majority of bills died prior to this deadline.
Once again the Democrats' cap and trade proposal took center stage demonstrating Oregon's urban/rural divide. During the 2019 Legislative Session, the Senate Republicans walked out over HB 2020's cap and trade proposal which thereby denied the Senate a quorum for nine days. Upon their return, business continued with 150 bills passing in the final two days because Republicans provided "rules suspension" allowing all bills in the queue to be vote up or down on the floor.
Ten days ago, the House and Senate Republicans jointly walked out as a result of the cap and trade bill being moved forward to a floor vote. House and Senate Democrats continued to work and move bills as far as possible through the legislative process but without the required quorum present, bills could not be voted up or down on either chamber's floor.
As a result, if a quorum was present, as of today, 48 House bills and 55 Senate bills would be eligible for a House floor vote (17 other bills are also in the queue and need rules suspension or an extra legislative calendar day or two). Only three bills have passed and been signed by the Governor: HB 4061 (increases the surcharge for cultural license plates); HB 4106 (Happy Valley/Clackamas County parks annexation legislation) and HB 4140 (student concussion public education).
Today, the House Speaker gave a rousing speech condemning the Republicans for walking out and failing to return to conduct business. She indicated that climate legislation is unfinished and the presiding officers would be asking the Governor exercise her executive order authority to enact a cap on carbon emissions and convene a special session within 30 days.
Despite the fact that House Republicans, who said they would return to vote on budget bills, homeless funding and wildfire mitigation, the Speaker adjourned the House until 11:59 pm Sunday which effectively adjourns the legislative session sine die.
The President of the Senate gave a speech that included and reiterated the messaging of the Governor’s Executive Order authority regarding carbon emissions. He adjourned the Senate until and upon the call of the Senate President (effectively adjourning the session sine die).
The State Legislature’s Emergency Board will meet on Monday, March 9, 2020 to fund Umatilla County emergency flood funding and Coronavirus funding. He was not interested in a special session based on his remarks.
Revenue Forecast (02/12/2020)
Today the Office of Economic Analysis presented its third economic and revenue forecasts of the 2019-2021 biennium. The risk of a recession has slackened since the last forecast largely due to the easing of trade tensions and the fact that the Feds reduced interest rates; thereby giving markets more confidence. The chance of a recession this year are 1 in 4. However, keep an eye on the coronavirus. Recessions are largely widespread global psychological events and this could serve to kick start a recession if it continues to spread. It is already having an impact on particular supply chains and tourism.
Productivity, GDP and income growth in Oregon are outpacing the rest of the country. Oregon household income now averages above the US average; the first time since the 1960 census. Interestingly, the state has seen a recent spike in estate taxes driven by a few hundred wealthy deaths in the state. In fact, estate taxes are exceeding the forecast by some $87 million already in the biennium.
Despite slowing job growth we are seeing growth in a wide variety of revenue (personal income, liquor, gambling etc.) going to the state.
$17.6 million will be transferred to the PERS UAL because the legislature passed a measure years ago that if estate taxes exceed a certain threshold (10 year average), it gets transferred to this account to reduce employer unfunded liability. That law also applies to capital gains and repatriation of offshore funds. Also, reserves continue to accumulate and are slowly reaching their statutory caps of 15% of the General Fund.
Now to the numbers:
Fourth quarter personal income tax collections were up nearly $40 million (1.5%) from the December forecast and personal income is down $600 million (-0.2%) from the December forecast. Fourth quarter corporate income tax collections were down $39 million (-21.3 %) from the December forecast and up $121.9 million (10.2%) from the 2019 COS estimate. General Fund (GF) gross revenue is up $437.5 million (2.1%) from the 2019 COS estimate and net GF and Lottery resources are up $674.3 million (2.8%) from the 2019 COS estimate.
At this time, Oregon’s PERSONAL Kicker is NOT expected to kick for 2021. However, the corporate kicker is currently estimated to kick to the tune of $122 million for the 2021-2023 biennium.
Projected 2019-2021 projected combined net General Fund and Lottery resources are up $183.4 million (0.7%) from the December forecast. As previously mentioned, the state's reserves continue to grow and we have healthy levels of money in the Educational Stability Fund and Rainy Day Fund that will temper any substantial reductions in revenues to the state in the event of a recession.