REVERSING THE TREND: FROM SCARCITY TO PROSPERITY OBA’S 2014 LEGISLATIVE WORK PLAN As outlined on page two, OBA’s 2014 work plan identifies five major issues of focus for the next year. Oregon’s second annual short legislative session will be held February 3-March 9, 2014. The 2015 session will be held from February-July. During the past three years, OBA’s legislative agenda has focused on getting a better return with the money we have with significant cost savings and efficiency realized through legislation such as PERS reform, education re-design, health care transformation and corrections reform. Moving ahead, we’re looking at revving Oregon’s economic engine with long-term solutions to big issues affecting large and small businesses and their employees across the state.
OBA 2014 POLICY ISSUE #1:
Rebuild the Middle Class An effort around rebuilding the middle class will focus on working towards policy solutions for Oregon’s “job polarization” issues, as employment opportunities continue to shrink in middle wage jobs with larger losses during the recession and slower growth in the expansion. This trend has unfortunately been reshaping the state and national economy for decades. The middle class comprises the vast majority of Oregon earners and thus, the base of our economy.
During this year’s quarterly economic reports, state economists repeatedly warned that Oregon’s rural areas are at risk of continuing to lose economic ground beyond the devastation of the Great Recession. OBA’s second major legislative agenda item for 2014 will be to look at natural resource policy and rural higher education for opportunities to reverse the trend of low wages, high unemployment and poverty, and the exodus of young people. As the chart above shows, this effort is also interrelated with our first agenda item to Rebuild the Middle Class.
OBA 2014 POLICY ISSUE #3:
Transportation and Infrastructure Source: Oregon Office of Economic Analysis/Federal Reserve Bank of New York, U.S. Census Bureau
OBA 2014 POLICY ISSUE #2:
Rural Jobs Initiative “’The exodus is already happening,’ said Rep. Cliff Bentz, R-Ontario. ‘They’re leaving because there is nothing for them to do.’ Either the state changes its natural resource rules ‘or those areas are going to empty out and die off.’” - The Oregonian
• I-5 Bridge Replacement: Our staff team will be in Salem during the February Session working with legislators and leadership on this critical infrastructure issue. We support confirmation of a financing plan during the upcoming session and getting to work on construction. • West Coast Infrastructure Exchange: Oregon, California, Washington and British Columbia have partnered to create this exchange. The effort will focus on regional needs and funding for everything from airports to dams to transportation facilities. Learn more about the project here: http://westcoastx.com/. OBA staff and members of our Transportation Policy Committee will be involved as this project is fully developed.
I-5 Bridge -- 1917
OBA has convened a workgroup comprised of many of Oregon’s leading companies headquartered here along with businesses organized as S-corporations. We are doing core research to prepare for this conversation. This is a two year conversation with voters, neighbors and elected leaders to gauge interest in re-structuring Oregon’s tax system. Two things we keep in mind: 1. Comprehensive tax reform could deliver 55,405* (non-partisan Legislative Revenue office/OTIM analysis of Sen. Hass’s comprehensive tax reform proposal – SB 824) new private sector jobs to Oregon while largely reducing the average tax burden on Oregon families. This is achieved by lowering Oregon’s top five income tax rate and asking those not participating in the tax system – visitors and the cash economy – to begin participating.
• Statewide transportation funding package for 2015: Our Transportation Policy Committee and OBA staff will be working with elected leaders to develop an infrastructure financing plan for the 2015 legislature that includes priorities around innovation, technology and efficiency, and the capacity to support capital projects and economic growth.
OBA 2014 POLICY ISSUE #4:
2. No other proposal (or the status quo) can deliver results like the figures above.
OBA 2014 POLICY ISSUE #5:
Prioritize Student Achievement – Fulfill The Promise of 40-40-20 As OBA President Ryan Deckert mentions in his column (front page) we have taken on improving student achievement and reduced instructional days in Oregon (nation’s third shortest school year) in the past several years by focusing efforts on re-organizing education delivery and successfully cutting Oregon’s unfunded PERS liability by 33%. What’s next? Utilizing our new governance structure to achieve tangible results: • Reducing teacher/student ratio and fueling enrollment in our community colleges and universities through greater investment in education at the state level. • Lengthening the academic calendar for Oregon students.
Oregon has a relatively unique tax structure – relying heavily on high income taxes to fund a large portion of state services – including K-12 education, community colleges and universities. We are one of only five states that does not incorporate a consumption tax into its overall structure. Many businesses pay their state taxes at the individual income tax rate as they are organized as S-corporations; which pay the 9/9.9% rate. The other major weakness of our tax system is allowing tourists and the cash economy (which is surprisingly large) to go untaxed – which increases the tax burden on Oregonians and our businesses. The governor has convened business and labor leaders to explore comprehensive tax reform. OBA has long advocated that Oregon is overly dependent on volatile income taxes which boom in a strong economy and bust in a recession. To lower our high income taxes you would need to replace the revenue with a new broad based source of revenue.
40-40-20 Goal for Oregon: • Ensure that at least 40 percent of adult Oregonians have earned a bachelor’s degree or higher. (Currently at about 30%) • Ensure that at least 40 percent of adult Oregonians have earned an associate’s degree or post-secondary credential as their highest level of educational attainment. (Currently at about 18%) • Ensure that the remaining 20 percent or less of all adult Oregonians have earned a high school diploma, an extended or modified high school diploma or the equivalent of a high school diploma as their highest level of educational attainment. (Currently at about 42% with 10% not achieving a high school diploma or equivalent)
January 2014 Balanced Voice