Capital Chatter: Dangerous times for the Oregon Legislature

• Moving — gradually — on tax “reform:” State revenue talks are progressing quietly and informally among business and labor, Democrats and Republicans, in the Oregon Legislature.

State Sen. Mark Hass told me that once all sides agree on the need for more revenue and stability, the centerpiece of the tax reform likely will be a business privilege tax, or business excise tax, that replaces Oregon’s current corporate income tax. Individual Oregonians would get a cut in personal income taxes. The League of Oregon Cities also hopes that property tax reform — including giving voters greater flexibility to increase their property taxes — will be part of the mix.

Hass, a Beaverton Democrat, chairs the Senate Committee on Finance and Revenue. He has taken the lead on revenue reform – tax changes and increases – for the 2017 Legislature.

He said income taxes are outdated for corporations, because it’s easy to show zero net income. An excise tax would be like a sales tax paid by businesses; but the Legislature is not considering the high corporate tax rate envisioned in Ballot Measure 97, which voters defeated last fall.

• A taxing mood at the Oregon Capitol: A majority of legislators are not directly involved in the budget discussions. They are working on other issues. Still, the budget — how will the state increase taxes? where will it cut programs to balance the rest of the budget? — hangs over most discussions in the Capitol.

One legislator likened the political atmosphere to being told that you might have cancer: There is a mixture of hope and fear — but most of all uncertainty — as you await the outcome. (As a cancer survivor, I find that comparison apt.)

• Partisan hype: Be wary of complaints about partisanship dividing the Capitol early in the 2017 Legislature. One Republican legislator told me that he’d seen more bipartisanship in the past three or four months than he’d seen in all his previous legislative sessions.

That does not mean every bill will get a fair hearing in the Legislature. Lawmakers sometimes introduce a dumb bill at a constituent’s request, knowing – and hoping – that the bill will quietly die. The House sometimes passes a bill, knowing – and hoping – that the Senate will never let it see the light of day. And vice versa. But that way, the bill sponsors can claim they did their best.

• Untangling PERS: Steven Patrick Rodeman, executive director of PERS, told the Senate Committee on Workforce this week that PERS’ unfunded liability will continue growing for the next five or six years. Meanwhile, PERS will continue to pay out about $4 billion a year in pension benefits.

“Problems in retirement systems don’t get corrected quickly, and they persist for a very long time,” he said.

As Republican Sen. Bill Hansell of Athena noted, Oregon’s PERS problems will persist “until the Tier 1 recipients are no longer with us.”

Tier One refers to public employees who were hired before Jan. 1, 1996. Tier Two covers public employees hired between Jan. 1, 1996, and Aug. 28, 2003. And the Oregon Public Service Retirement Plan covers employees hired on or after Aug. 29, 2003.

• Untangling the Willamette River: Senate President Peter Courtney, D-Salem, recently spent hours using his Stihl chainsaw to clear logjams in the Willamette River. This was during the weekend before the 2017 Legislature convened.

The Salem Democrat’s modest house is next to the river, and he and his wife, Margie, have rescued a few boaters over the years. A Republican senator was so concerned about Courtney’s safety that he bought him a life jacket to wear when working around the river.

• Standing the governor on her head: A Feb. 2 column about Oregon Gov. Kate Brown in The New Yorker says she “is known to do headstands to prepare for important meetings.” I knew she practiced yoga and enjoys the outdoors, including riding her horse when she has a chance. But headstands?

The very New York-ish column is headlined, “Advice for progressives from America’s radical feminist governor.” It starts:

“How to resist Trump? Early the other morning, I put the question to Oregon’s Kate Brown, who in November became the first L.G.B.T. person to be elected governor of an American state, after being appointed to the position in 2015. ‘At my age, I can go pretty solidly for twelve hours,’ Brown, who is fifty-six years old, said. ‘So, if you have a nine-to-five job, that gives you a couple of hours to be at your local airport to protest the immigration order. It gives you time to go to a League of Women Voters meeting to help register people. It gives you time to go online and research which organization you’re going to donate money to. It gives you time to help you connect to your family and friends in states that have key senators.’ …”

The column goes on to describe Brown as possibly “the closest to being (President Donald Trump’s) personal antithesis.”

• A blurry crystal ball: One Capitol insider thinks Brown is veering to the political left in case Sen. Jeff Merkley – who casts himself as the heir to the late Massachusetts Sen. Ted Kennedy’s liberal legacy – wants to challenge her for the governorship in 2018. Merkley was re-elected in 2014 to a six-year term; he could run for governor without giving up his Senate seat.

On the other hand, Brown has hired Nik Blosser as her new chief of staff, and he has connections throughout the business community.

• A few words about paying taxes: Tax resisters, watch out. The Oregon Department of Revenue will penalize you $250 for filing a frivolous income tax return. It cites these examples:

•An argument, without any good basis, that there has been a violation of your constitutional rights.

•Reliance on a “gold standard” or “war tax” deduction.

•An argument that wages or salary are not taxable income.

•An argument that the 16th Amendment to the U.S. Constitution was not properly adopted.

•An argument that “unenfranchised, sovereign, freemen, or natural persons” are not subject to tax laws.

Middle East combat also affects Oregon income taxes. The state’s personal income tax instructions say: “If you are an Oregon resident, you may continue to subtract federally taxable military pay from your Oregon income if you earned it outside Oregon from August 1, 1990, through the date the president sets as the end of combat activities in the Persian Gulf. The president had not declared an end to combat activities when this publication was printed.”

In other tax news, because the wolf was taken off the state’s endangered species list in 2015, the Department of Revenue says the wolf depredation credit no longer is available.

• Touring the Capitol: A men’s restroom is among the highlights on some tours of the Oregon Capitol. Visitors apparently are fascinated by the 1930s foot pedals still used to flush the equally old urinals.

Dick Hughes has been covering the Oregon political scene since 1976. Contact him at TheHughesisms@Gmail.com.