2018 Legislative Wrap Up



2018 Legislative Wrap Up

The 2018 short legislative session adjourned sine die on Saturday, March 3, 2018, a week earlier than the constitutionally mandated deadline. Some controversial policies the Alliance identified, such as cap and trade, and paid family leave, did not move forward in the short session. These issues are likely to arise in the 2019 legislative session. Despite these policies moving forward, the session was not without controversy largely due to changes in Oregon’s tax code in response to the federal tax changes and a bill that closed the “boyfriend loophole” related to gun ownership.
 
State budget and taxes: Working with Oregon Business Plan partners, the Alliance continued to urge the Legislature to focus on the state’s unsustainable fiscal future, including the need to control escalating costs associated with the Public Employee Retirement System (PERS) and employee health care benefits. The Legislature passed SB 1566, which creates side accounts intended to give public employers incentive to pay down PERS debt. While this bill may help some employers pay down PERS debt more quickly, it does not address the escalating costs that contribute to significant future increases in PERS contributions.
 
The Legislature also took action in response to the federal tax code changes. SB 1529 adjusted Oregon tax law to respond to federal changes aimed at repatriating corporate income. The change resulted in a $140 million revenue increase, rather than what would have been a revenue loss, that will fund the PERS side account created in SB 1566 to incentive employers to pay down PERS debt.
 
In addition, the Legislature narrowly passed SB 1528. This bill disconnected the Oregon tax code from new provisions in the federal code that allow a deduction for pass through income. The bill does not make changes initially proposed that would have rolled back a lower personal income tax rate for pass through entities the Legislature originally passed in 2013. In addition to disconnecting from the federal code for pass through income, the bill sets up an opportunity grant program that allows taxpayers to purchase credits that can be used as a charitable deduction for tax purposes, thereby providing a mechanism to avoid the new federal cap on state tax deductions.
 
Homelessness and Livability: The Alliance actively supported four bills passed by the Legislature aimed at supporting efforts to address homelessness and livability. The first, HB 4054, authorizes the city of Portland and the Oregon Department of Transportation (ODOT) to enter into an intergovernmental agreement to allow the city of Portland to conduct clean ups of homeless camps and waste on ODOT property. The bill also aligns the notice process used by the city and ODOT related to posting camp clean ups. The increased coordination is intended to address ongoing issues in ODOT rights of way throughout the city.
 
HB 5203 provided a $2.37 million authorization to Multnomah County for the no-turn-away family shelter. Due to increased demand, the shelter had reached capacity and families were not able to access services. The additional resources will allow the county to serve the needs of the families looking for help.
 
HB 4007 increased the document recording fee from $20 to $60. The additional resources are dedicated to development or preservation of affordable rental homes, a Home Ownership Assistance Program and the Emergency Housing Account aimed at preventing or ending homelessness. The bill also establishes a First Time Home Buyer Savings Account, providing for a state tax deduction for saving money toward the down payment of a first home.
 
Finally, HJR 201 passed with broad bipartisan support. The joint resolution will send a constitutional referral to the voters in the November 2018 general election. Currently, the Constitution prohibits local governments from using bond resources for the benefit of the private sector. If passed, HJR 201 will allow local governments to use resources from voter-approved bonds for affordable housing to leverage private sector and nonprofit resources. In doing so, bond revenues could be stretched to provide more affordable housing units than would otherwise occur.
 
Education: The Alliance supported a capital funding request for the University of Oregon, Oregon State University and Eastern Oregon University. Though less than the original request, the Legislature approved bonds in the amount of $20 million for the University of Oregon Knight Campus for Accelerating Scientific Impact, $39 million for a building at Oregon State University's Cascades campus in Bend and $9 million for a new facility at Eastern Oregon University, which will include cross-laminated timber products.

Cleaner Air Oregon: The Legislature passed SB 1541, a compromise bill intended to strengthen Oregon’s air pollution regulations and enforcement. The Oregon Department of Environmental Quality has been working on new rules for over a year, but funding for the program did not receive legislative support in the 2017 session. SB 1541 increases compliance standards, but provides a ramp up period for existing companies to reach those standards. The bill also imposes fees on companies that emit to fund the program.