After adjournment, the deluge

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I guess it wasn’t enough for Democrats to allow people in the country illegally to get Oregon driver’s licenses, ignoring voters who soundly rejected the practice in 2014. Oregon’s Democrat-controlled 2019 Legislature also voted to bury Oregonians in a deluge of tax increases.

“Only time will tell whether there will be political consequences for Oregon Democrats who enacted this tax hike, Patrick Gleason, Vice President of State Affairs at Americans for Tax Reform, wrote in Forbes. “What is certain is that Oregon lawmakers are making their state a less attractive place to do business, create jobs, invest, and raise a family, and they are doing so at a time when other states are implementing reforms to make their tax and regulatory climates more welcoming.”

 At the top of the 2019 Legislature’s tax list is the gross receipts tax on sales inside the state’s borders that exceed $1 million, whether or not the business makes a profit. The tax, equivalent to a sales tax, is expected to raise $2 billion per biennium. The legislative revenue office says the tax will hit about 40,000 businesses. This less than three years after almost 60% of Oregon voters rejected Measure 97, a ballot measure that would have imposed a state gross receipts tax. 

Adding insult to injury, the Democrats passed SB 116 setting a particularly inconvenient election date if a tax repeal petition now seeking signatures qualifies for the ballot. Rather than having the vote take place during the general election in 2020, when there’s likely to be high interest and participation, the bill provides for a special election on January 21, 2020.

I guess they figured picking Christmas or New Year’s Day for the vote would be too obvious an attempt at manipulation.

Paid Family Leave legislation (HB 2005-B) is going to cost you, too. A 1% payroll tax will fund a paid family leave insurance program (FAMLI) to be administered by the Oregon Employment Department.  The tax will come on top of the business sales tax.

A Revenue Impact statement projected that employers will pay $542.3 million and employees $1,029.6 in 2021-2023. In 2023-2025, employers will pay $ 775.0 million and employees $1,471.5 million.

Then there’s the maneuvering with the kicker.  The collective “kicker” tax rebate Oregonians will likely receive when they file in 2020 is going to be $108 million smaller, thanks to HB 2975, a bill Gov. Kate Brown signed into law in April.

 And don’t forget SB 861, which provides for paying the postage for election ballots. It will cost taxpayers an estimated $1.7 million per election. Gov. Brown pushed for the law, figuring it would increase voter turnout. In a rather bizarre statement, given the widespread availability of stamps, Brown testified that low-income and younger residents don’t always have access to postage stamps.

There’s also HB 2449-B, a 50-cent increase in the emergency communications tax on our phones, which will bring the total to $1.25 per month.

Oregon’s minimum wage law is increasing employer costs, too.

According to the Office of Economic Analysis Department of Administrative Services, the law will result in a slowdown in job growth. “While the impact is small when compared to the size of the Oregon economy, it does result in approximately 40,000 fewer jobs in 2025 than would have been the case absent the legislation,” the office has reported.  “Our office is not predicting outright job losses due to the higher minimum wage; however, we are expecting future growth to be slower as a result.”

And next year, Oregon voters will get a chance to vote on an increase in yet another Oregon tax, this one on tobacco. If approved, the cigarette tax would increase by $2 a pack and E-cigarettes and cigars would be taxed at 65% of their wholesale price.

Whew, what a torrent!

As the humorist Gerald Barzan observed, “Taxation with representation ain’t so hot either.”

 

 

 

 

 

 

 

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Cap-and-Trade: Oregon Republicans are blowing it (Just like they did with last walk-out)

oregonC02Emissions

Oregon Senate Republicans stayed away from the Capitol Thursday, preventing a vote on HB 2020, a key bill for Democrats that would cap greenhouse gas emissions. The walk-out is a mistake, just as was another walkout in May.

Resolution of the last Republican walk-out in May 2019 involved an agreement by Democrats to sacrifice a bill that would have tightened vaccine exemptions and a gun reform bill that would have tightened gun restrictions.

The Republicans might have placated some of their anti-vaccine and anti-gun control base, but those voters were never going to switch political sides anyway. Moreover, the anti-vax crowd is actually pretty small. Just 17% of Americans believe that “parents should be able to decide not to vaccinate their children, even if that may create health risks for other children and adults,” according to Pew Research.

Resolution of the May Republican walk-out also involved included a pledge by the Republicans not to walk out again for the rest of the 2019 session. The new walk-out compromises that commitment.

The Republicans claim that the agreement was conditional on them having opportunities to have a meaningful impact on HB 2020 as it moved forward. So much for that..

A key Republican goal is to get an emergency clause in the cap-and-trade bill removed. The clause would allow the bill to go into effect immediately after Gov. Brown signs it, preventing opponents from trying to refer the bill to voters for a costly and contentious fight.

Removal of the emergency clause could mean the Democrats would be facing iffy public votes on two major bills dear to their hearts, the cap-and-trade law and the Student Success Act, which will impose a gross receipts tax on Oregon businesses to fund $2 billion in education spending every two years.

A Senate agreement to remove the emergency clause would also mean sending the bill back to the House for another vote, a potentially time-consuming move that could mean no resolution before the Legislative session is set to end on June 30.

Frankly, the Democrats would be slitting their own throats if they agreed to remove the emergency clause. Oregon has a high environmental profile, but winning a public vote on the cap-and-trade law, with its projected cost of $550 million just in the first year and a sweeping progressive spending agenda, would be a heavy lift. The projected increase in gasoline and residential natural gas prices alone could turn off voters.

Knowing all this, the Democrats are unlikely to capitulate this time around.

The Democratic presidential candidates and Oregon: they could care less

Digital advertising is one of the key elements of the campaigns of Democrats running for their party’s 2020 presidential nomination. Data show that some candidates are shouting, while others are barely whispering.

According to Acronym, a progressive non-profit that tracks political digital spending, the candidates are paying Facebook and Google millions for digital ads, but spending in Oregon is barely a blip, .

Sen. Elizabeth Warren (D-MA) is the biggest spender so far.  She has spent $1,688,706 on digital ads (Facebook: $1,218,206; Google: $470,500) since launching her campaign.

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Senator Elizabeth Warren speaks during her presidential candidacy announcement event at the Everett Mills in Lawrence, MA on February 9, 2019.

The second biggest spender on Facebook and Google digital ads is Sen. Kamala Harris (D-CA). She has spent $1,640,339 (Facebook: $1.2 million; Google: $438,000).

Altogether, the Democratic candidates have spent $12,805,165 on Facebook and Google digital ads since launching their individual campaigns.

digitalspending

Yes, President Trump has spent $9,080,994, outspending every Democratic candidate.

What states have been targeted with all that money?

If you look at the top five states targeted by each of the candidates with Facebook ads, California takes the lead. It’s one of the top five targets of 15 candidates. Then there’s Iowa, which has its caucuses on Feb. 3, 2020.  It’s in the top five lists of nine candidates. Next is Texas, one of the top five states of eight candidates.

Even though New Hampshire has its primary early on Feb. 11, 2020, it’s only in the top five spending list for Facebook ads of three Democratic candidates: Pete Buttigieg, John DeLaney; and Tulsi Gabbard.

Then there’s Oregon. Oregon’s not in the top five list of any of the Democratic candidates and it’s only in the top ten list of two, Bernie Sanders and Julian Castro. But even Sanders has applied only 3.3% ($41,502) of his Facebook spending to Oregon and Castro only 2% ($8,379).

The lack of digital attention to Oregon may well be because the state’s primary isn’t until May 19, 2020, real late in the game, and it has only 52 delegates. If a candidate is trying to harvest a lot of delegates, focusing on the states with earlier primaries, including Super Tuesday, March 3, when 1433 delegates will be at stake, makes more sense.

Sorry, Oregon. You just don’t matter.

 

Addendum, May 5, 2019

The Democratic National Committee announced in late April that 2020 presidential candidates will each need to hit 130,000 donors to qualify for the third and fourth televised debates in the fall. Vice According to the Columbia Journalism Review, Vice News’s David Uberti reported that the high threshold may force longshot contenders to spend more on Facebook ads than they get back in donations—limiting their resources for more traditional forms of campaigning. In all, political ad spending is expected to near the $10-billion mark in 2020, up from $6.3 billion in 2016. The Wall Street Journal’s Alexandra Bruell has the figures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Teaching the Holocaust: a good idea, a bad bill

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Who would want to be accused of voting against teaching kids about the Holocaust?

Obviously not the members of the Oregon Senate. On March 12 they voted unanimously  for Senate Bill 664, which would require all of Oregon’s school districts to teach about the Holocaust and genocide beginning with the 2020-2021 school year. The bill is now in the House.

Claire Sarnowski, a freshman at Lake Oswego’s Lakeridge High School, came up with the idea of mandating Holocaust instruction after hearing Holocaust survivor Alter Wiener tell his story. Sarnowski approached state Sen. Rob Wagner, who agreed to introduce a bill.

It all sounds so simple and straightforward, but Senate Bill 664 is, in fact, an expansive progressive monstrosity that only a bureaucrat or lawyer could love. Like anti-terrorism laws, it’s a classic example of mission creep.

The 1338-word bill goes far beyond mandating that students be taught about the Holocaust and genocide. It declares, instead, that the instruction must address: the immorality of mass violence; respect for cultural diversity; the obligation to combat wrongdoing through resistance, including protest, and; the value of restorative justice.

Specifically, the bill says the instruction must be designed to:

(a) Prepare students to confront the immorality of the Holocaust, genocide and other acts of mass violence and to reflect on the causes of related historical events;

(b) Develop students’ respect for cultural diversity and help students gain insight into the importance of the protection of international human rights for all people;

(c) Promote students’ understanding of how the Holocaust contributed to the need for the term “genocide” and led to international legislation that recognized genocide as a crime;

(d) Stimulate students’ reflection on the roles and responsibilities of citizens in democratic societies to combat misinformation, indifference and discrimination through tools of resistance such as protest, reform and celebration;

(e) Provide students with opportunities to contextualize and analyze patterns of human behavior by individuals and groups who belong in one or more categories, including perpetrator, collaborator, bystander, victim and rescuer;

(f) Enable students to understand the ramifications of prejudice, racism and stereotyping;

(g) Preserve the memories of survivors of genocide and provide opportunities for students to discuss and honor survivors’ cultural legacies;

(h) Provide students with a foundation for examining the history of discrimination in this state; and

(i) Explore the various mechanisms of transitional and restorative justice that help humanity move forward in the aftermath of genocide.

Not only must Oregon schools tackle all this, but the State Board of Education, in consultation with a local organization that has the primary purpose of providing education about the Holocaust, is required to develop academic content standards for Holocaust and genocide studies that comply with the requirements of this section.

The bill is currently with the House Committee on Education which, hopefully will take a thorough look at it and narrow its mandate .

I doubt that Oregon’s already underfunded and overwhelmed teachers will welcome the addition of one more labor-intensive, complicated instructional mandate, no matter how well-intentioned.

And it’s hard to believe all this is what Claire Sarnowski had in mind.

 

 

 

 

Rent control: and the beat goes on

rentcontroldemonstration

In early January, I argued that Oregon’s enactment of a statewide rent control law would be just the beginning (Rent control: another bad idea out of Salem). Pressure would build quickly to reduce the law’s annual rent increase limit of 7 percent plus inflation, currently totaling about 10 percent, I said.

No surprise, the push for tougher rules has already begun.

It began with a Feb. 1, 2019 editorial in Street Roots, a weekly street newspaper published in Portland that’s sold by members of the local homeless community.

“The profit motive has been allowed to triumph over the fact that housing is a fundamental human need to survive,” the editorial said. “For too many decades, the marketplace has been allowed to skew sharply toward money over humanity, and Oregon is just too attractive of a market to pass up. It’s time for the pendulum to swing the other way.”

The editorial highlighted the need for the prohibition on rent control action by local governments to be lifted and noted that rent increase limits elsewhere are much lower.

“Rent stabilization elsewhere in the country comes in at much lower percentage,” the editorial said. “Take Berkeley, where a different calculation regulates rent increases to no more than 3 or so percent. In New York, it’s approximately 1.5 percent.”

Mary King, a professor of economics emerita at Portland State University, followed up with a March 1, 2019 Street Roots commentary also arguing that the rent increase limit is too high.

Oregon’s new rent control law was “…designed to stop only extreme rent gouging and limit no-cause evictions” and prohibits cities from passing their own, stronger rent stabilization policies, King said.

Ten percent is just too high a limit, particularly when compared with some tighter limits set elsewhere, King wrote. “Capping annual increases at 10 percent would have only slightly limited the unaffordable growth in rents in Portland over the past five years,” she added.

Oregon’s rent control law represented only “…progress against the worst excesses,” King said. “However, if the state would allow it, Portland could pass a much stronger, more effective rent stabilization policy without harming the supply of housing. Our best next step would be to pass a second bill to lift pre-emption on cities hoping to set their own course – and get to work in Portland.”

The Legislature’s rent control bill was essential because it would establish a “better baseline,” the Street Roots editorial said, “but we expect them to keep fighting. We will too.”

Hang on landlords and tenants. It’s going to be a bumpy ride.

 

 

 

 

 

 

 

Statewide rent control in Oregon: this is just the start of something

 

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Even as a child, you knew the mouse wouldn’t be happy with just a cookie.

Oregon Democrats won’t be satisfied with their first stab at statewide rent control either.

Senate Bill 608, moving swiftly through Oregon’s Democrat-controlled legislature, proposes to limit annual rent increases to 7% plus the change in the consumer price index, except when the dwelling has been certified for occupancy less than 15 years. Lawmakers in the Oregon Senate approved the bill 17-11 on Tuesday, Feb. 12. It now goes to the House.

In January 2019, Jim Straub, Legislative Director of the Oregon Rental Housing Association, signaled acceptance of, or resignation to, the inevitable, given that the Democrats have a supermajority in both chambers and occupy the governor’s chair. “There is a lot here for landlords to dislike, but more importantly we should recognize it for what it isn’t, an industry killer,” Straub said

He’s dead wrong.

Straub figures landlords can live with the bill because the annual rent increase limit is so high, leaving a lot of wiggle room. In 2018, the all items consumer price index increased 1.9 % before seasonal adjustment. Add 7% and the rent increase limit would be 8.9%.

Although annual rent increases can vary quite a bit in Portland, influenced by a building’s location, age, amenities, etc., annual rent growth in Portland overall averaged just 4.3% in 2017 and, largely due to record apartment construction, actually decreased 1.3% in 2018.

ECONorthwest, an economics consulting firm, has estimated that only 5% of buildings in Portland increased rents above what would be allowed by SB 608 in 2018.

But Oregon real estate interests are going to rue the day SB 608 becomes law.

That’s because once it is enacted, pressure to lower the rent increase limit in response to the pleas of tenant groups will accelerate. And government regulations will beget more government regulations.

In  January, Margot Black, founder and former leader of a renters’ rights group, Portland Tenants United, bitterly criticized the high cap on rent increases.

“If this is the version that passes, and if (Democrat Sen. Virginia) Burdick is the one championing it, then I’ll start my campaign to run against her the day after it passes,” said Black. “I will knock on every renter’s door in the district and let them know that their senator thinks they are no better than a used couch put out to the curb in the rain.”

According to the Oregon Rental Housing Association, some tenant groups have also already gone to the 2019 Legislature requesting that all future rent increases be limited to a maximum of around 2% every 12 months, even if a tenant moves out during  that period.

And don’t expect the Democrats to consider the rent increase limit set in stone.

Government is addicted to constant revision of the rules. The federal income tax began in 1913 with a combined tax rate of 1-2% for the middle class. The marginal tax rate for the middle class now is about 22%.

Oregon’s personal income tax has been all over the map since its inception. According to the Oregon Department of Revenue, in 1930, the maximum tax rate on “single and separate” and “Joint and head of household” was 5%. Only three years later, in 1933, it went up to 7% and by 1955 it had risen to 11.60%. It went back down to 9% in 1987, but jumped to 11% in 2009-2011, In 2018 its was 9.9%.

So, don’t be surprised if SB 608 is just the camel’s first move.

“It is the humble petition of the camel, who only asks that he may put his nose into the traveler’s tent. It is so pitiful, so modest, that we must needs relent and grant it.”

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Hijacking Oregon Justice

 

Kate Brown

Oregon Gov. Kate Brown

Former Portland City Commissioner Steve Novick was hired by  Gov. Kate Brown’s Oregon Department of Justice in June 2018 as a Special Assistant Attorney General (SAAG).

Sounds simple and straightforward. It’s not.

It’s just plan wrong and Brown and her Attorney General, Ellen Rosenblum, shouldn’t be allowed to get away with it.

Oregon’s Cascade Policy Institute is pointing out that Novick’s entire salary is being paid by an out-of-state private source, New York University’s State Energy & Environmental Impact Center, which is backed by Bloomberg Philanthropies. The Center is covering Novick’s legal fellowship with the aim of strengthening state attorney general offices in their crusade against the Trump administration’s environmental policies.

The unprecedented practice of providing external funding to state attorneys general to push a policy agenda ought to raise ethical concerns, the Cascade Policy Institute asserts, and justifiably so. As attorney Andrew Grossman put it: “What you’re talking about is law enforcement for hire….Really, what’s being done is circumventing our normal mode of government.”

In August 2018, Competitive Enterprise Institute published a report by Christopher Horner which details the roots and function of the SAAG program. Law Enforcement for Rent: How Special Interests Fund Climate Policy through State Attorneys General describes the genesis of the SAAG program as an informal coalition between states, spearheaded by former New York Attorney General Eric Schneiderman.

According to Justus Armstrong, a Research Associate at Cascade Policy Institute, a letter included in the report’s appendix from Schneiderman and Vermont Attorney General William Sorrell to Oregon Attorney General Ellen Rosenblum shows she was invited to a March 2016 meeting of this coalition. The letter describes the program as “an important part of the national effort to ensure the adoption of stronger federal climate and energy policies.” Correspondence between members of the coalition (also compiled by Horner) expresses a desire to collaborate on targeting companies in the energy industry with regulatory and enforcement tools.

This same environmental policy agenda drives NYU’s Center, as expressed in its communication with state attorneys general. Emails state that the “opportunity to potentially hire an NYU Fellow is open to all state attorneys general who demonstrate a need and commitment to defending environmental values and advancing progressive clean energy, climate change, and environmental legal positions.” NYU’s website directs interested attorneys general to demonstrate a need for outside funding to pursue these legal positions.

If this sounds questionable, imagine a similar practice being used to serve other political agendas. If a nonprofit backed by Charles and David Koch offered to fund a position in a state to provide legal assistance on regulatory matters, would it be considered a conflict of interest? If the National Rifle Association were bankrolling state employees to serve as a “resource” on gun law enforcement, would it raise red flags? This isn’t simply about protecting the environment versus not. It’s a question of impropriety and corruption. NYU states in its agreements that fellows owe their loyalty solely to the state attorney general once they’re assigned there, but SAAGs like Novick are still being paid by an outside source while working on behalf of the state.

According to the Associated Press, Oregon deputy legislative counsel Marisa James said in a Sept. 11, 2018 legal analysis that the fellowship program violates state law because special assistant attorney general Steve Novick is paid by an entity other than the state and reports to the center and the attorney general.

“We conclude that some aspects of Mr. Novick’s appointment conflict with the Attorney General’s authority to appoint assistants under ORS 180.140,” Ms. Jacobs said in a letter obtained by The Washington Free Beacon.

Oregon Deputy Attorney General Frederick Boss disagreed, arguing in a Sept. 24, 2018 letter that the arrangement is “consistent with many longstanding SAAG appointments in areas like tobacco enforcement, bond issuance, and complex health care transactions.”

It appears that Rosenblum was anxious about the ethical gray areas of this arrangement from the start. Emails from within the DOJ show that Rosenblum instructed the DOJ not to use the word “volunteer” to describe Novick’s position in his hiring paperwork. The obfuscating language of the hiring process is notable: In reality, Novick isn’t working as a “volunteer” or a “research fellow,” but as an environmental lawyer, as he has been for years. Rosenblum also showed apprehension about the potential media attention the unprecedented arrangement could draw, as one email states:

“We need to be sure we are prepared to explain his position to the media, who, no doubt, will be interested. (Because he is being paid by an outside entity—which is quite unusual I think)….”

As Armstrong notes, Novick’s position is quite unusual indeed, and Oregonians deserve an explanation. Regardless of one’s views on Novick, Rosenblum, or Bloomberg’s environmental policy agenda, embedding privately funded legal counsel in our justice department is a conflict of interest. The Attorney General’s office should be loyal to Oregon citizens, not out-of-state donors, and should uphold the law rather than push a legislative agenda.