Courting division: battling it out over the distribution of federal tax revenue

Bitch. Bitch. Bitch.

To the long list of issues dividing a factious America, add one more.

Since Donald Trump’s election, the chorus of people bitching about some states contributing more in taxes to the federal government than they receive back in Federal spending has gotten louder.


Source: Giving or Getting? New York’s Balance of Payments with the Federal Government, Rockefeller Institute of Government, January 22, 2020

A January 2020 report from the Rockefeller Institute of Government calculated that forty-two states, including Oregon, had a positive balance of payments with the Federal government for 2018, each receiving more Federal spending than taxpayers remitted in Federal taxes and other Federal revenues. But eight states, including New York, had a negative balance of payments in 2018.

New York consistently holds itself up as the biggest loser in terms of what states give and get. According to the Rockefeller Institute report, New York sent $22 billion more in taxes to the federal government in 2018 than it received back and $116.2 billion more over the past four years.

Andrew Cuomo

New York Governor Andrew Cuomo argues New York is the “number one giver” of federal tax revenue and has been “bailing out red states for decades.”

“We believe this report is essential reading for policymakers and advisors in Congress and the executive when determining “winners” and “losers” in upcoming federal policy debates.,” wrote Patricia Strach, Interim Executive Director of the Rockefeller Institute.

But focusing on “winners” and “losers” in the allocation of taxes is a mistake that sets the stage for even greater polarization that will undermine the country’s strength.

You only need to look at the chaos that ensued under the Articles of Confederation went into effect in March 1781 to see the folly of putting state’s rights over the common good. As George Washington put it, the states needed to abandon “local prejudices and policies” for “the interest of the community.”

What was needed Washington and many other leaders many leaders concluded was a more complex, centralized government under a new constitution formulated at a convention of state delegates.

On Nov. 23, 1786 Virginia’s General Assembly adopted an act making it clear the states had “…to decide the solemn question – whether they will, by wise and magnanimous efforts, reap the just fruits of that independence which they have so gloriously acquired and of that union which they have cemented with so much of their common blood – or, whether by giving way to unmanly jealousies and prejudices, or to partial and transitory interests, they will renounce the auspicious blessings prepared for them by the revolution…”

The Constitution that emerged from the Constitutional Convention in Sept. 1787 was a momentous achievement that set the foundation for a vibrant, unified nation. Complaints about the distribution of federal tax revenue among the states can only undermine national cohesion.

Far better to understand that in a system with progressive taxes, where wealthier people pay more and extra money is redistributed to people in need, states with wealthy residents will give more than they get.

Moreover, as the Tax Foundation wrote in a Special Report, strictly considering whether a state gets as much as it pays in isn’t “a very civic minded view of federal government. Presumably citizens pay federal taxes to provide for the common defense and to support other national programs that benefit the nation as a whole.”

Focusing on the uneven balance of payments just spurs more national divisiveness (as if we don’t have enough already) and draws attention away from America’s need for a commitment to justice and equality.

As the COVID-19 signs say, “We’re all in this together.”





Hypocrisy Lives:  Shemia Fagan’s embrace of union money


State Sen. Shemia Fagan announcing her entry into the Democratic primary race for Oregon Secretary of State

Rabid liberal Democrats like Secretary of State candidate Shemia Fagan rail against the power of corporations and their donations to political campaigns.

In that vein, she’s a critic of the U.S. Supreme Court’s 2010 Citizens United decision that the government cannot restrict corporations, associations, and labor unions from making independent expenditures in support of or opposition to candidates.

But in a display of raw hypocrisy, Fagan is a big fan of political donations by labor unions, apparently considering union money more virtuous. In fact, union donations  were the lifeblood of her 2020 primary campaign, even though unions represent just 14.4% of Oregon workers.

A late entrant to the Democratic primary for Secretary of State, after Rep. Jennifer Williamson dropped out, Fagan quickly gained the support of unions and amassed a substantial campaign war chest. Public employee unions, in particular, backed Fagan because she voted against Senate Bill 1049, which limited PERS benefits

According to the Oregon Secretary of State, reported union contributions to Fagan’s campaign from when Williamson dropped out on Feb. 10, 2020 to May 15, 2020 totaled at least $796,775.68.

I guess Fagan’s worries about undue influence don’t apply to unions, only to businesses.


Union contributors to Committee to Elect Shemia Fagan

      Feb. 10 – May 15, 2020

  • SEIU – Citizen Action for Political Education – $239,389.86
  • Oregon AFL-CIO – $35,696.16
  • SEIU/American Federation of State, County and Municipal Employees – Oregonians for Ballot Access – $47,500.00
  • AFSCME Local #328 – $200.00
  • International Assoc. of Firefighters – $25,000.00
  • SEIU Local 503, OPEU – $3,825.91
  • Oregon Education Association – OEA PAC – $115,275.00
  • Iron Workers District Council of the Pacific Northwest – $1,000.00
  • Oregon Laborers Political Action Committee – $11,000.00
  • Lane Professional Firefighters Assoc – $1,000.00
  • Local 48 Electricians PAC – $7,500.00
  • Sheet Metal Contractors National Association (SMACNA) PAC – $1,000.00
  • American Federation of State, County & Municipal Employees (AFSCME) – $75,000.00
  • Portland Metro Fire Fighters PAC – $5,000.00
  • National Education Association – NEA Fund for Children and Public Education PAC – $25,000.00
  • Oregon State Firefighters Council – $5,000.00
  • Oregon AFSCME Council 75 – $91,638.75
  • Oregon School Employees Association – Voice of Involved Classified Employees – $25,000.00
  • Plumbers & Steamfitters PAC – $15,000.00
  • Local #1159 FirePAC – $1,000.00
  • SEIU Local 49 COPE Fund – $5000.00
  • Professional Firefighters PAC – $750.00
  • Pacific Northwest Regional Council of Carpenters -$2,500.00
  • Sheet Metal Workers International Association Local 16 -SMART Local 16 PAC – $5,000.00
  • Service Employees International Union Local 503/ American Federation of State, County and Municipal Employees Local 75 – Oregonians for Ballot Access – $47,500.00
  • Oregon State Building and Construction Trades Council – Building Trades PAC – $5,000.00

*All organizations noted above are as identified in campaign finance information provided by the Oregon Secretary of State.






















Salem, OR salon owner turning COVID-19 shutdown protest into cash


Lindsey Graham (Source:

Lindsey Graham, operator of Glamour Salon in Salem. OR, has figured out how to make money off her defiance of Gov. Kate Brown’s COVID-19 stay-at-home order.

Graham reopened her salon on Tuesday, May 5, 2020, saying she had to make the move to pay her bills and provide for her family.

Conveniently, she started a GoFundMe account the day before, on May 4, prior to government action in response to her salon’s reopening.

“Our family businesses have been shut down by the government,” the account said. “No income for our family and next to nothing in govt assistance. Please help our family fight for our American rights and save our hard earned dreams. The govt has strong armed us, threatened us, and come after our family. We are taking a STAND and the legal battle ahead of us will be long and tough. We appreciate ALL your support in every way!!”

Graham set the GoFundMe account’s goal at $70,000. As of Friday afternoon, May 28, it had raised $71,070. Ten contributors had given $500 or more, one gave $2000. Not a bad haul. And not only can Graham spend the money pretty much however she wants, but it may not even be taxable income.

On May 14, Graham posted to the account that Oregon OSHA had fined her $14,000 and demanded she close the salon’s doors.

“This is not only unconstitutional, but unlawful and unjust,” Graham posted.
Please share this…..I will be FIGHTING this citation and fighting their case. I’m retaining my attorney to take this to court!!!! The government cannot find their own loopholes to punish me for trying to earn a living.
Please support my cause and help me fight!!!!”

In pleading for financial support from the public, Graham is copying a tactic employed by Shelley Luther, the Dallas, TX owner of Salon à la Mode who was arrested on April 24, 2020 for opening her business despite COVID-19 restrictions.

GoFundMe site to help her went live on April 23, 2020, the day before her arrest.

“Shelley Luther is an American Hero that has decided to resist tyranny by opening her business against an unlawful State Executive Order,” read the description for the Shelly Luther Fund campaign.

A fellow Texan, Rick Hire, said the Woke Patriots organization was behind the campaign. In a 30-minute May 9  YouTube video, Hire says he founded the organization to deal with challenges to constitutional rights and the group picked Luther to be the first beneficiary of a GoFundMe campaign.

The GoFundMe site was a hit right out of the gate. When an initial goal of $250,000 was rapidly surpassed, the goal was raised to $500,000. The total raised now sits at $500,040 and the window for donations has closed.

Who knows? Lindsey Graham may hit the jackpot, too.



After COVID-19, whither Washington Square mall? Pier 1 latest to liquidate.


When J.C. Penney filed for bankruptcy on May 15, 2020, did it put another nail in Washington Square’s coffin or signal a major transformation of the mall?

‘The Washington Square mall was a wondrous thing when it opened. The enclosed site, designed to entice shoppers with large anchors supplemented by smaller scale stores, attracted customers from as far away as Seattle.

The original mall encompassed 1,093,500 leasable square feet and was the largest enclosed shopping center in Oregon. It has a long history of change and renewal.

A 160,000 sq. ft. Meier & Frank store was the first to open for business on August 16, 1973. A 211,900 sq. ft. Sears store came next in October of that year, followed by a 120,000 sq. ft. Lipman’s in November. In May 1974, Nordstrom made its debut with a 108,000 sq. ft. store, followed by an 89,300 sq. ft. Liberty House store in August 1974 and a 210,000 sq. ft. J.C. Penney store in August 1975.

Turnover among the larger stores began within a few years.

  • In 1978, Frederick & Nelson took over the Liberty House store.
  • In 1979, Frederick & Nelson acquired the Lipman’s chain and moved the former Lipman’s space; Mervyn’s then took over the former F&N space.
  • In 2008, Mervyn’s declared bankruptcy and closed all its stores, including the one at Washington Square.
  • In 1991, Frederick & Nelson declared bankruptcy and closed its Washington Square store.
  • In 2005, Mervyn’s closed.
  • In 2008, Dick’s Sporting Goods took over the former Mervyn’s space.

The mall weathered all of these changes and its current owner, Macerich, a real estate investment trust, has been rewarded with average sales per square foot of $1261. But much greater challenges have now emerged, particularly with the mall’s anchor stores, but with some smaller retailers as well.

The Wall Street Journal predicted last week that about 100,000 stores are expected to close over the next five years—more than triple the number that shut during the previous recession. Partly to blame is the jump in e-commerce to 25% of U.S. retail sales from 15% last year, UBS estimates.

“The turbocharged shift to e-commerce is expected to further depress profit margins and accelerate a shakeout in a country that already had too much bricks-and-mortar space for an increasingly digital world,” The Journal said.

It is also looking increasingly less likely that the economic recovery from COVID-19. In a May 17 interview on the CBS show 60 Minutes Federal Reserve Chairman Jerome Powell warned that the economic recovery could take over a year . “We’ll get through this. It may take a while,” Powell said. ” It may take a period of time. It could stretch through the end of next year.”

In the Portland Metro Area, no anchor stores at malls are really safe. On May 6, Nordstrom said it planned to permanently shut 16 of its 116 full-line stores as part of its adjustment to the retail environment during the coronavirus outbreak. The following day, it said it would not reopen its Clackamas Town Center location in Happy Valley, OR after the COVID-19 shutdown ends and that the store will be permanently closed by August, 2020. Nordstrom closed two other Oregon-area stores in 2015 and one in 2018.   Nordstrom stock over the past 12 months is down from $37.46 to $16.41, a 66% decline.

Against this backdrop, consider the situation with many of Washington Square’s stores as the mall remains closed during the COVID-19 turmoil:


 The mall’s current troubles began with the bankruptcy of Sears in 2018 and the closure of its 211,900 sq. ft. Washington Square anchor store in 2019.



On May 18, 2020, Pier 1 Imports, which was founded in 1962, said it is permanently closing all its 540 retail stores, including one at Washington Square. The stores will reopen after the COVID-19 shutdowns and then proceed to liquidate their merchandise.

The company filed for chapter 11 protection earlier this year on Feb. 17 in the U.S. Bankruptcy Court in Richmond, Va. and had hopes of a sale to an interested buyer, but none emerged. “It is now clear that Pier 1’s future does not involve any brick-and-mortar retail locations,” the company said.


Chinos Holdings, J. Crew’s parent company, which also owns Madewell, filed for Chapter 11 bankruptcy protection  in federal bankruptcy court for the Eastern District of Virginia on May 3, 2020.  J. Crew has lost money for six straight years. Like many of its peers, it took it on the chin with the increase in e-commerce. But J. Crew also struggled to deal with $1.7 billion in debt resulting from a leveraged buyout by two private equity firms ( TPG Capital and Leonard Green & Partners) in 2011.

“Like many other retailers, J. Crew and Neiman (Marcus) over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment,” the New York Times reported on May 14, 2020. “And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court.”



After a long decline,  J.C. Penney filed for bankruptcy on May 15, 2020. The company, which hasn’t booked an annual profit in nine years. said it plans to close an undisclosed number of its roughly 850 department stores and put itself up for sale. The company’s annual net sales contracted 8.1% to $10.7 billion in 2019, following a 7.1% decline in 2018, 0.1% in 2017 and 0.4% in 2016. J.C. Penney’s stock hit a high off $82.23 on March 29, 2007. It started 2020 at $1.12 a share and has been trading below $1 per share for most of this year. It closed on May 15, 2020 at 24 cents a share.

“I don’t think there is a place for J.C. Penney anymore,” Robin Lewis, founder and CEO of The Robin Report, which reports on the retail industries. said to CNBC on May 16, 2020. “Even if we didn’t have this virus … we have been over-stored for half a century in this country.”

In the same vein, an April 2020 report from Green Street Advisors, a real estate research firm, said more than 50% of the department stores anchoring America’s malls are going to close permanently by the end of 2021. “Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually non-existent,” said said Vince Tibone, a Green Street analyst.

The April report was prescient when it said JCPenney in particular was on the edge of a bankruptcy that would probably result in its liquidation.

On May 18, the company said it expects to close about 242 stores — 30 percent of its locations — as part of a restructuring plan.



“With little or no revenues coming in for these non-essential retailers – traditional department stores, fashion, and luxury retailers being the most profoundly affected – many of the most prominent mall-based retailers, which have been struggling for years from falling sales and weighted down by too much debt, are teetering on the brink,” the Robin Report said in April 2020. Macy’s Inc. lost its investment-grade rating from Standard & Poor’s and saw its debt rated junk in February 2020.

The company is now seeking loans to bolster its cash flow, which has significantly decreased as a result of the shutdown, according to a May 7, 2020 regulatory filing. It is also looking to sublease almost half of its Long Island City headquarters in order to retain more of its cash.

Over the past 52 weeks, Macy’s stock has dropped from a high of $23.40 to $5.31 on Friday, May 15, 2020.



Gap Inc. is the parent company of Gap, Athleta, Banana Republic, Old Navy, Janie and Jack, and Intermix.

Sonia Syngal, CEO of Gap Inc. said in mid-March that the company would likely reopen fewer stores for the flagship Gap brand after the COVID-19 closures are lifted. “We’ll be using this as an opportunity to refashion the company for what we want it to look like over the next 50 years,” Ms. Syngal told the Wall Street Journal in early May 2020.

Market watchers are more cautious, having watched Gap’s stock decline from $17.28 at the beginning of the year to $7.60 on Friday, May 15, 2020, a 56% drop.

“The apparel industry is rattled, and Gap is no exception,” Forbes reported on May 7, 2020. ” A COVID recession will impact the company’s revenues, cash flows, and ability to pay dividends. We estimate that a recession that persists through late Q3/early Q4 2020 can reduce the company’s revenues by 40% from $16.4 billion in 2019 to $10 billion in 2020.”

On April 23, 2020, Gap Inc. warned in a filing with the U.S. Securities and Exchange Commission it may not survive the next 12 months intact. The company said it had suspended rent payments for shuttered stores, which approximated $115 million per month in North America, and was in talks with landlords to defer payments, change lease agreements, or in some cases, terminate the leases and permanently close some stores.

“We will need to take additional actions to both preserve existing liquidity and seek additional sources of liquidity, beyond our currently available cash and credit facilities within the next 12 months as existing cash and cash expected to be generated from operations may not be sufficient to fund our operations,” the SEC filing said.



Abercrombie & Fitch derives the bulk of its revenues from the US, which has been hit hard by COVID-19. The outbreak of the virus has led to a steep fall in demand, which the company’s Q1 2020 results on June 4, 2020 will likely confirm with major drops in revenues across all segments.

“Already struggling with sluggish sales and low gross margin, the company will face significant challenges from store closures,” The Motley Fool, a financial and investing advice company, said in mid-March.

Abercrombie & Fitch, showing it is not immune to the impacts COVID-19 is having on other retailers, has said it’s open to leaving any shopping center while it reassesses its store base. “We’re willing to walk away from any mall at this point. It’s about getting the right store in the right location at the right size,” CFO Scott Lipesky said in March.

Its stock is down from $17.48 at the start of the year to $11.14 at the close on Friday, May 15, 2020.


L Brands, parent of  Victoria’s Secret, Pink and Bath & Body Works, might not survive the pandemic after Sycamore Partners, which agreed to buy a 55% stake in Victoria’s Secret in February, tried to cancel the $525 million deal and agreed earlier this month to scrap it. Shares of L Brands have fallen 53% in the past 12 months.

On May 14, 2020, Leslie Wexner, a retailing legend, officially retired after 56 years as head of the company. The New York Post reported that his departure came at a time when his reputation “…has been tainted by sagging sales at Victoria’s Secret; complaints of a culture of misogyny, bullying and sexual harassment at the lingerie peddler; and new revelations about Wexner’s business dealings with convicted pedophile Jeffrey Epstein.”

On May 20, L Brands,, posted a first-quarter net loss of nearly $300 million and reported that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost 50% half and Bath & Body Works declined 18%.

Victoria’s Secret, which has long positioned itself as a purveyor of elegant and sexy lingerie styles,  has been struggling with changing tastes, declining revenues and a stale image.



Lolli & Pops candy company filed for bankruptcy in August 2019.  Online sales ceased in February 2019 and the company ceased paying rent to some landlords in April 2019. The company blamed vanishing visitors at shopping malls for its financial troubles. In March 2020, the company was purchased for $2.4 million by an affiliate of TerraMar Capital LLC, which said it planned to diversify the company into e-commerce and wholesale. It is unclear whether TerraMar is succeeding in reviving the company.

harrylogo2, the parent company of Harry & David, which has operated seasonal stores at Washington Square, said in April 2020 it would permanently close most of the brand’s bricks-and-mortar locations in the U.S. and focus on an e-commerce future.

Harry & David filed for bankruptcy protection in 2011, crippled by debt piled upon it by private equity owners. The company emerged from six months in Chapter 11 bankruptcy protection in September 2011 after the court approved its reorganization plan. acquired Harry & David Holdings for $142.5 million in cash. The sale closed in September 2014.



Standard & Poor’s ratings say Ascena Retail Group (ASNA), the parent of Ann Taylor, could default in coming months or years. It is expected to face significant challenges as remote work becomes more prevalent in the coronavirus era and the way women dress, particularly professionals, is changing dramatically.

Ascena operates stores under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion segment (Lane Bryant, Catherines and Cacique) and for tween girls under the Kids Fashion segment (Justice).

“Ascena…has had five consecutive years of losses as it has struggled to offer the right clothing selection, relied heavily on discounting and maintained stores in less-than-ideal locations,” Bloomberg reported in Oct. 2019.

Ascena recently repurchased some of its debt at below-par prices, which S&P Ratings deemed a “selective default.” Even after the company relieved some of its debt burden with that step, S&P assigned Ascena a credit rating of CCC-, the lowest before default. That was based on the analysts’ expectation of “conventional default or a broad-based restructuring of Ascena’s capital structure in the next six months.” Ascena’s stock is down 83% year to date. 


Houston-based Tailored Brands Inc., the parent company of Jos. A. Bank (and Men’s Wearhouse), has been showing sales decreases and rapidly shrinking profits. In Its fourth quarter earnings, Tailored Brands saw net sales drop 3% to $691 million while Jos. A. Bank sales dropped 5% to $204.7 million.

For the full fiscal year 2019, on a GAAP basis Tailored Brands reported a loss of $35.0 million compared to operating income of $13.3 million in Fiscal Year 2018.  Mary Beth Blake also resigned as president of Jos. A. Bank in December as part of a reorganization.

Men’s Wearhouse’s acquired  JoS. A. Bank in March 2014 for $1.8 billion. With both retailers now suffering sales declines, Tailored Brands would probably prefer to have that $1.8 billion now.

“(Tailored Brands)…is trying to change course a bit by offering things like jeans and more business-casual attire,” The Motley Fool wrote in Dec. 2019. “But this segment is pretty well saturated by a plethora of brands, so it’ll be tough. Tailored Brands is far from a top stock and faces multiple challenges that all need to be addressed now. Based on its balance sheet, the time to fix those problems is getting shorter and shorter.”

The company’s stock is down more than 70% so far this year.


Washington Square closed on March 18, 2020 because of the Covid-19 crisis. A reopening date is still not settled. When it does reopen, with so many of its retail tenants at risk, the continuation of the mall as we know it is doubtful. Will Washington Square be able to evolve to suit changing economics and tastes?

Will it be more like this:


Or this:


The CARES Act will cost Oregon, too: what one hand giveth, the other taketh away

abstract business interior double exposure

When President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on March 27, 2020, the assumption was that the largest-ever economic stimulus package in U.S. history would be a cornucopia of goodies.

But buried within the law are provisions that are likely to actually reduce revenue in Oregon by millions. As the saying goes, what one hand giveth, the other taketh away.

The CARES Act includes several provisions expected to affect state revenue. The largest:

  • Allow the deduction of “excess” losses by non-corporate businesses that would otherwise exceed a threshold established in the Tax Cuts and Jobs Act of 2017;
  • Allow net operating losses for individuals, estates, and trusts to be carried back for up to five years, and delimiting the amount by which these losses may be used to reduce taxable income;
  • Increase the percentage of business interest income that is tax deductible; and
  • Suspend required minimum distributions from retirement funds, allowing some retirees to let their fund balances recover before making distributions and incurring tax liability.

The CARES Act is expected to reduce federal taxable income for tax years 2018 through 2020, thereby reducing Oregon taxable income in each of those years. Taxpayers will be able to amend 2018 and 2019 tax returns in order to benefit from the additional deductions, which will reduce state income tax revenue when the amended returns are processed and a portion of taxes are refunded to taxpayers.

The CARES Act didn’t include financial relief for states struggling through the COVID-19 downturn. Nor did the $484 billion coronavirus relief package Trump signed on April 24.

House Democrats are pushing for another bill that would beef up state and local government finances and help offset some of the losses noted above, but Senate Majority Leader Mitch McConnell and President Trump are resisting. Both said earlier this week that there isn’t yet a need for Congress to pass additional legislation.



Hitting the COVID-19 Jackpot

Individuals and small businesses all over America have been hit hard by the COVID-19 epidemic. Some have been fortunate enough to receive financial support from people sympathetic to their plight.

Shelley Luther hit the jackpot.


Salon owner Shelley Luther after she was released from jail in Dallas, May 7, 2020.

The Dallas, TX owner of Salon à la Mode was arrested for opening her business despite COVID-19 restrictions. A GoFundMe page to help her went live on April 23, 2020, the day before her arrest.

“Shelley Luther is an American Hero that has decided to resist tyranny by opening her business against an unlawful State Executive Order,” read the description for the Shelly Luther Fund campaign.

A Texan, Rick Hire, says the Woke Patriots organization is behind the campaign. In a 30-minute May 9  YouTube video, Hire says he founded the organization to deal with challenges to constitutional rights and the group picked Luther to be the first beneficiary of a GoFundMe campaign.

The GoFundMe page was a hit right out of the gate. When an initial goal of $250,000 was rapidly surpassed, the goal was raised to $500,000. The total raised now sits at $500,040 and the window for donations has closed.

Most of the contributions have been well under $100, but some big givers have stepped up, too. Dan Patrick, the Lieutenant Governor of Texas, gave the most, $7,500, to cover Luther’s court-imposed fines.

Texas Governor Greg Abbott allowed personal care service facilities like salons to resume operations on May 8, so the restriction that spurred Luther’s protest is no longer in place. But the brief tempest made Luther $500,040 richer. Not only can she spend the money pretty much however she wants, but it may not even be taxable income.

Luther says she wants to spread her newfound wealth to those who need it. That probably won’t include the people who work at her salon. On May 3, Luther was approved for a government loan under the Paycheck Protection Program. The entire loan can be forgiven in full if at least 75 percent of it is used to pay her employee’s salaries.

What a deal!

Guest Opinion: Gov. Brown’s Covid-19 Emergency Declaration is Unconstitutional

NOTE: On May 18, 2020 a Baker County, OR judge invalidated the governor’s restrictions on businesses and social gatherings, along with every other executive order Brown has issued under a state of emergency she ordered due to the COVID-19 pandemic.

By Glen Wagner   GWagnersmall


One thing I have not seen addressed enough in regards to Oregon Governor Brown’s actions related to the COVID-19 situation is the literal unconstitutionality and illegal nature of her Emergency Declaration or her blatant continued violation of the constraints placed on her from the Oregon Constitution.

Willamette University professor Paul Diller has bloggedabout the matter, arguing that Brown’s emergency orders should have an expiration date, and Willamette Week has written about his argument, but that’s it.

In my view,  a basic reading of Section 6.1 of Article X-A of the Oregon Constitution (found at clearly states that emergency powers shall not extend beyond 30 days from the time of proclamation, after which the articles will expire.

Section 6.2 of Article X-A says that a 3/5 approval of the Legislative Assembly is required to extend the date beyond 30 days. Section 6.5 of Article X-A says that the Governor cannot issue a second proclamation for the same emergency.

Gov. Brown declared the COVID-19 emergency on March 8th. Per the Oregon Constitution, the emergency legally ended on April 8th. As far as I know, the Legislative Assembly did not vote to approve a time extension. Therefore, any of the Governor’s current actions justified by this emergency declaration are fundamentally unconstitutional.

Gov. Brown’s Emergency Declaration states it is to last 60-days. The declaration itself is in violation of Section 6.1 of Article X-A in the state constitution.

The governor’s Emergency Declaration further claims the 60-day term “can be extended or terminated by the Governor”. Per ORS 401.204 the Governor (or the Legislature) can terminate the emergency, but it does NOT give the Governor the authority to extend it. Article X-A Section 6.2 makes it clear ONLY the Legislative Assembly can do this.

According to ORS 401.165.1 the declaration needs to specify an area “no larger than necessary to respond to the emergency.” 433.441.2(b) Says it should state the political subdivision or geographical area subject to the proclamation. Governor Brown’s Emergency Declaration states the emergency to be “state-wide”.

While public health information is listed within the declaration, it is not a foregone conclusion that all counties in the state had equal risk of infection and not all asked for an emergency to be declared. The purpose of the limited geographical nature of an emergency is to ensure focus of state resources and limit emergency powers to a specific area. In can be argued that by making it immediately state-wide the states and county resources were de-focused and spread thin rather than concentrated at the points of highest risk such as in urban areas. While not in violation of the law, it is surprising no one in the legislature raised any challenge to this scope determination.

ORS 433.441.2(d) Says the proclamation must contain a duration IF LESS THAN 14 days; in other words, there is a statutory limit on the Public Health Proclamation of 14 days. Governor Brown’s Emergency Declaration clearly violates this requirement by stating a 60 days duration.

ORS 433.441.5 Says the proclamation expires when the Governor declares it or NO MORE THAN 14 days after the proclamation. The Governor can extend the duration by another 14-day period (1) for a total of 28 days. This is in compliance with the Constitution’s Article X-A since it is within 30 days. It does NOT give the right to the Governor to extend the duration indefinitely. Therefore, Governor Brown’s Emergency Declaration of 60-days and that the Governor can extend the time frame is in violation of this statute.

ORS 433.452 Says that it is reasonable for the state to detain an individual who has been exposed to the reportable condition only for the time necessary to collect contact tracing information. The individual is to be educated on the nature of their exposure. Nowhere can I find in this statute where the Governor is given the authority to detain ANY or ALL individuals who have not been shown to have been exposed to the reportable condition. Her order indicated only 14 people in a state with a population of over 4 million had contracted COVID-19 and only in a small geographical location. There was no justification for and no legal right for the Governor to issue a stay at home order for healthy individuals. Likewise, even if this order had been legal it should have expired on April 8th like everything else.

Therefore, the Governor has exceeded her authority to detain unaffected individuals and for durations far exceeding anything allowed in the state constitution or statutes.

The Governor just issued an extension to her originally unconstitutional declaration, which is an actual illegal act to the aforementioned references. In addition, she cites two statutory references: ORS 401.165 and ORS 401.204 as justifications of her right to extend the emergency for another 60 days.

401.165 only states the Governor’s ability to issue a declaration, which she already did on March 8th. 401.204 pertains to ENDING the emergency, not extending it. And then to sound all legal she says it is all under ORS 401.025. All this section does is define some terms for the rest of the statute. Basically, they included these references to give an air of legitimacy when in fact they have no bearing on the extension proclamation at all. This shows culpability and intent to continue to violate our laws.

Where is the push-back?

Kate Brown needs to bite the bullet on a Covid-19 budget


Gov. Kate Brown wants all state agencies to submit plans for 8.5 percent cuts in their general fund dollars for the two-year budget cycle because of the expected impacts of the Covid-19 pandemic.

What a complete waste of time.

A smarter, bolder governor would abjure equal across-the-board cuts in favor of cuts targeted at lower priority, low-quality or ineffective programs.

The order for across-the-board budget cut scenarios is a lazy cop-out that substitutes simple, seemingly fair cuts for hard decisions that might raise political hackles.

If all programs are kept in place and just reduced in size and scope, opportunities to eliminate waste are lost and saved but ineffective programs tend to grow again when higher state revenues return.

As George W. Bush said, “There comes a time when every program must be judged either a success or a failure. Where we find success, we should reward it, repeat it, make it the standard. And where we find failure, we must call it by its name. Government action that fails in its purpose must be reformed or ended.”

Indiscriminate equal across-the-board cuts also ignore differential effectiveness between state government programs and differences in policy priorities. They are agnostic as to what the state should really be doing with its revenue and lock in current policy priorities.  They also penalize the leanest and most efficient agencies that have less fat to cut.

Some programs may also be able to sustain their core functions with a specific percentage cut, while others can’t.  You can’t, for example, cut the length of a bridge by 8.5 percent.

Uniform 8.5 percent cuts will mean that valuable, impactful projects and investments will be cut as much as in equal measure with bloated, duplicative projects and state employees doing great work will be cut along with those doing shoddy work.

In addition, although government frequently tries to cloak all spending in the “investment” bucket, it is true that some spending is intended to be more an investment in the future than a short-term outlay.  An across-the-board spending cut that applies to even productive public investments may reduce current spending, but make future budget problems worse.

“At this point, the reduction plans are a planning exercise that will give the Governor a series of options to consider,” Liz Merah, a spokeswoman for Gov. Brown, said to OPB.

Exercise is right, as in performance without a purpose.