Legislative Days to focus on Cap-and-Trade

Cap-and-Trade, Tax Policy Highlight Legislative Day Agendas

The Oregon Prosperity Project 

Hearings during January Legislative Days this week will provide a preview of legislation likely to receive the most attention during the 35-day 2018 Session, which starts February 5.

The highest-profile legislation during the Session likely will be an attempt to create a Cap-and-Trade program modeled after legislation in California. Senator Michael Dembrow (D-Portland) and Representative Ken Helm (D-Beaverton) this week unveiled drafts of Senate and House bills that would cap greenhouse gas emissions and create a complex market for credits. The proposal would affect many of Oregon’s largest employers. To see the bill draft for LC 44, click here, and to see bill draft for LC 176, click here.

When Oregon started annual Legislative Sessions, the intent for Short Sessions, which occur during even-numbered years, was to make necessary fixes to existing legislation and to address urgent issues. This Cap-and-Trade bill meets neither of these standards. It is complex, and Oregon’s carbon footprint already is smaller than many other states and is shrinking as businesses comply with existing regulations and proactively invest in innovations to reduce their carbon footprint.

The House Energy & Environment Committee and Senate Environment and Natural Resources Committee will hold a joint meeting at 8 a.m., Wednesday to discuss the legislative concepts, before breaking into separate meetings to discuss other issues.

Legislative Day agendas, as is usually the case, also include updates on budget-related issues. On Wednesday, the Senate Workforce Committee will hear a report on possible ways to pay down the unfunded actuarial liability of the Public Employees Retirement System (PERS). The House Revenue Committee, which meets at 2 p.m. Wednesday, and the Senate Finance and Revenue Committee, which meets at 8:30 a.m. Friday, will hear reports on several tax-related topics. The most noteworthy will be reports from the Legislative Revenue Office and Office of Economic Analysis on how federal tax changes could affect Oregon and on pass-through tax policy.

But the role of budget discussions in the 2018 Session will not be clear until after the January 23 Special Election on Measure 101 (M101), which asks voters to approve some of the taxes passed by the 2017 Legislature to help fund the Oregon Health Plan. If M101 fails, Legislators will have to use much of their limited time finding a way to fill the budget hole.

Regardless of what voters decide on M101, Oregon’s fiscal imbalance remains the state’s most important challenge. Little meaningful progress has been made on controlling public pensions and the cost of health care for government employees. As a result, many districts had to reduce teaching positions this year even though Legislators approved an 11% increase in K-12 spending ($800 million) during the 2017 Session.

Two work groups that are studying issues affecting many Oregon businesses also have meetings scheduled during Legislative Days. Both the data breaches and paid family leave work groups will meet Thursday morning. The data breaches work group will present a report to the Senate Judiciary Committee, which meets at 2 p.m. Friday.


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