3A
THE DAILY ASTORIAN • FRIDAY, JANUARY 20, 2017
Commission nixes expected
release of ODOT review
By PARIS ACHEN
Capital Bureau
SALEM — The Oregon
Transportation Commission
on Thursday nixed a sched-
uled briefing on draft find-
ings of a management audit
of the state Department of
Transportation.
The audit is intended to
ensure ODOT is prepared to
effectively manage a potential
transportation package that
legislators could approve later
this year.
That legislation — one of
Gov. Kate Brown’s priorities
as governor — could hike gas
taxes and fees on drivers and
funnel hundreds of millions
of dollars in additional fund-
ing to the department.
The state in September
awarded a nearly $1 mil-
lion contract to New York-
based McKinsey & Company
to conduct the long-awaited
review.
The briefing on draft find-
ings had been added to the
commission’s
Thursday
meeting agenda after the EO
Media Group/Pamplin Media
Group Capital Bureau earlier
this month requested a copy
of the 60-page document.
Bret West, an administra-
tor with the Department of
Administrative Services who
oversees the McKinsey’s con-
tract, received the draft find-
ings in December, said Matt
Shelby, a department spokes-
man. However, the docu-
ment contained McKinsey’s
trade secrets, including strat-
egies the firm uses to con-
duct management reviews.
Trade secrets are exempt from
disclosure under state pub-
lic records law and had to be
redacted, Shelby said.
West said after receiving
the draft findings he asked
McKinsey to expand on two
areas in the review related to
conflicts of interest and the
agency’s
decision-making
authority.
Oregon lawmakers’ spending
framework includes tax cuts
By CLAIRE
WITHYCOMBE
Capital Bureau
SALEM — The co-chairs of
the state Legislature’s joint bud-
get-writing committee Thurs-
day presented a spending plan
that includes cuts in services to
reflect the state’s expected $1.8
billion shortfall for the next two-
year budget cycle.
The $20.2 billion budget
outline presented by state Sen.
Richard Devlin, D-Tualatin,
and Rep. Nancy Nathanson,
D-Eugene, reflects that short-
fall and describes potential cuts
to general program areas such as
health care, education and pub-
lic safety.
Devlin and Nathanson said
the framework makes large cuts
to key state services.
“To be clear, to be clear, we
do not believe the resources
as allocated in this document
are sufficient,” Devlin said in
remarks during a press confer-
ence at the state Capitol.
Senate Majority Leader
Ginny Burdick, D-Portland, said
in a statement that the frame-
work demonstrated a need for
revenue reform.
The state’s Republicans,
meanwhile, presented the
framework as an opportunity
to cut state spending. Both par-
ties stressed maintaining “crit-
ical” services; the framework,
if implemented, could mean
changes ranging from higher
college tuition costs to cuts in
dental care for low-income
people.
Brown’s blueprint
Gov. Kate Brown’s $20.8
billion recommended budget
released in December was put
together assuming $897 mil-
lion in new revenue gathered
through new taxes and closing
tax loopholes.
By contrast, the frame-
work presented by Devlin and
Nathanson does not assume the
new revenue Brown proposed.
Under the plan, the Ore-
gon Health Authority spend-
ing would be 27.5 percent less
than needed to maintain cur-
rent service levels, while the
Department of Human Ser-
vices would receive 8.7 per-
cent less.
Proposed cuts vary in size
between K-12, higher educa-
tion and other state education
programs that don’t fall into
those two categories, such as
career technical education.
The co-chairs were also
quick to note that cuts to some
state services mean cuts to
matching funds from the fed-
eral government.
It’s also unclear whether
any direct cuts to federal fund-
ing may be coming down the
pike under the new Trump
administration.
Shortfall
Much of the $1.8 billion
shortfall comes from the loss
of federal subsidies for health
care costs for low-income Ore-
gonians, and the mounting costs
of the state’s public pension sys-
tem, which faces a $22 billion
unfunded liability.
This year, the state must now
also pick up some of the tab for
insuring additional Oregonians
under the Oregon Health Plan,
as a result of the Legislature’s
decision to expand coverage in
2014 under the Affordable Care
Act — a decision Devlin and
Nathanson said they stood by
Thursday. The federal govern-
ment covered the initial costs of
implementation.
Devlin and Nathanson
attributed the deficit to a “fun-
damental imbalance” caused by
these and other policies enacted
in the past.
Measure 5 in 1990, for exam-
ple, reduced property taxes and
required local public schools to
be funded by the state’s general
fund rather than by local taxes.
‘Call to action’
Burdick called the frame-
work a “call to action.”
“The fact that we face such
a deficit during a booming
economic period in our state
demonstrates the need for com-
prehensive revenue reform,”
Burdick said.
She said legislators were
looking for ways to maximize
the state’s dollars but reiterated
the need “to reform our revenue
system to make sure it is fair to
all Oregonians.”
House Majority Leader Jen-
nifer Williamson, D-Portland,
said the state couldn’t “afford to
move backward.”
“We can’t afford to move
backward in our investments in
education, health care and criti-
cal services for struggling fam-
ilies,” Williamson said in a
statement. “We shouldn’t short-
change our economic future by
making it harder for students
to get a good education. And
I don’t believe that any Ore-
gonian wants us to make these
painful cuts.”
5
Jim Green, the head of the
Oregon School Boards Associa-
tion, called for both revenue and
pension reform in a statement
Thursday.
“Our students need leader-
ship on these two issues from
the governor and our legislative
leaders,” Green said.
Republican praise
Republicans, however, gen-
erally praised the framework.
In a statement, Sen. Jackie
Winters, R-Salem, also called
the budget a “starting point.”
“Now the work begins,”
Winters said. “We have our
work cut out for us to craft a
sound, sustainable budget (that)
benefits Oregonians, urban and
rural alike.”
Senate Minority Leader Ted
Ferrioli, R-John Day, said the
budget the co-chairs presented
was “based in reality.”
“It’s time Oregonians under-
stood the consequences of
explosive growth of govern-
ment and overspending, cou-
pled with anti-business climate
and restrictive anti-land use
laws,” Ferrioli said. “The only
way Oregon will get through
the current budget crunch is by
setting better spending priori-
ties and demonstrating budget
discipline.”
Rep. Greg Smith, R-Hep-
pner, who is also House Repub-
lican Caucus Budget Chair, also
described the framework as
an opportunity for “spending
reform.”
“This Legislature has an
opportunity this session to
finally address the structural
deficits that led us to this posi-
tion in the first place,” Smith
said, “and to put Oregon on the
path to a more stable financial
future.”
The co-chairs said Thursday
that the Joint Ways and Means
Committee plans to release rec-
ommendations for the state bud-
get after the next state revenue
forecast, which is due to come
out Feb. 22.
The Capital Bureau is a col-
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Group and Pamplin Media
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By MARTIN
CRUTSINGER
Associated Press
WASHINGTON
—
Steven Mnuchin, President
Donald Trump’s pick as
Treasury secretary, clashed
with Democrats during a
lengthy confirmation hear-
ing Thursday over his han-
dling of thousands of mort-
gage foreclosures and his
failure to initially disclose
to the committee nearly
$100 million in assets
and interests in a Cayman
Islands corporation.
Mnuchin said the fail-
ure to disclose the assets
was an oversight that he
had corrected when it was
brought to his attention
by staffers of the Senate
Finance Committee. He
said he had followed the
advice of a lawyer who
believed the disclosures
were not necessary.
But Democrats seized
on the issue as evidence of
serious ethics challenges
among Trump’s Cabinet
nominees.
In the hearing, Demo-
crats on the Senate panel
— led by U.S. Sen. Ron
Wyden, D-Oregon, the
ranking member — chal-
lenged Mnuchin’s expla-
nations, suggesting it was
because he did not want to
reveal his involvement in a
business that could be used
as an offshore tax haven.
Mnuchin said he had never
used the Cayman Islands
to avoid paying taxes.
“The Treasury secre-
tary ought to be some-
body who works on behalf
of all Americans,” Wyden
said. “When I look at Mr.
Mnuchin’s background, it
is a real stretch to find hard
evidence that he would
be that kind of Treasury
secretary.”
Wyden’s tone drew
a rebuke from Sen. Pat
Roberts, R-Kansas, who
chided, “I’ve got a Valium
pill here that you might
want to take before the sec-
ond round.”
Confirmation likely
After the hearing, Sen-
ate Finance Committee
Chairman Orrin Hatch,
AP Photo/J. Scott Applewhite
Senate Finance Committee Chairman Sen. Orrin Hatch,
R-Utah, listens at right as the committee’s ranking mem-
ber, Sen. Ron Wyden, D-Ore., challenges Treasury Secre-
tary-designate Steven Mnuchin during his confirmation
before the committee Thursday.
R-Utah, predicted to report-
ers that Mnuchin will get con-
firmed and indicated he hoped
to have a committee vote next
week. But one Democrat,
Sen. Sherrod Brown of Ohio,
announced that he planned to
vote against Mnuchin.
Not
surprisingly,
Mnuchin’s performance drew
praise from Trump. At a lun-
cheon in Washington, D.C.,
Trump said Mnuchin was
“getting grilled” by the com-
mittee but “he’s doing a fan-
tastic job.”
Mnuchin, one of many
wealthy business execu-
tives Trump has picked for
his Cabinet, told the Senate
panel that he had turned over
5,000 pages of documents
to the committee and that
some of the questions were
complicated.
According to a memo writ-
ten by the Democratic staff on
the committee, Mnuchin did
not initially disclose $95 mil-
lion in real estate — a co-op
in New York City, a residence
in Southampton, New York, a
residence in Los Angeles and
$15 million of real estate in
Mexico. In addition, Mnuchin
initially failed to disclose
$906,556 of art work held by
his children, the memo said.
The memo said that follow-
ing meetings with committee
staff, Mnuchin amended his
disclosure forms and also dis-
closed his position as direc-
tor of Dune Capital Interna-
tional in the Cayman Islands,
the site of many offshore tax
havens.
When pressed by Demo-
crats to explain the omissions,
Mnuchin said, “I did not use
a Cayman Island entity in any
way to avoid taxes for myself.
There was no benefit to me.”
Democrats also attacked
Mnuchin’s record when he
ran OneWest bank, say-
ing he failed to do enough to
keep people from losing their
homes. Republicans widely
praised Mnuchin’s record in
business, indicating their sup-
port for his nomination.
Defended foreclosures
During
the
hearing,
Mnuchin defended his han-
dling of thousands of foreclo-
sures during the height of the
financial crisis, saying he had
worked hard to assist home-
owners to refinance so they
could keep their homes.
“Since I was first nomi-
nated to serve as Treasury sec-
retary, I have been maligned
as taking advantage of oth-
ers’ hardships in order to earn
a buck,” he said in testimony.
“Nothing could be further
from the truth.”
Associated Press reporter
Jill Colvin and the Los Ange-
les Times contributed to this
report.
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Celebration of
Kim (Kyong S) Fuhrmann’s
Beautiful Life
Teri and I would like to invite everyone who
knew Kim of Kim’s Kitchen, to join us in
sharing memories and celebration of Kim’s
beautiful life. We especially hope her many
caregivers will attend. We include every
shopkeeper, waitress and cab driver who
took the time and effort to ensure her safety
and well-being. We thank you. If you have
stories you want to share, there will be open
mic during the celebration for you to share.
If you cannot make it to the event or don’t
feel inclined to share your story in front of
the group, please write the story and email
them to kimskitchenastoria@gmail.com. I will either read them or
post them at the Celebration Service for all to hear. Teri and I look
forward to seeing old friends who knew Kim along with new friends
Teri and I have yet to meet.
January 28th  1 to 4pm
Pier 39 (Hanthorn Cannery) Banquet Room