A8 The BulleTin • Tuesday, March 30, 2021
EDITORIALS & OPINIONS
AN INDEPENDENT NEWSPAPER
Heidi Wright
Gerry O’Brien
Richard Coe
Publisher
Editor
Editorial Page Editor
Legislators should
clearly state what
bills would do
S
tate Senate President Peter Courtney held a news
conference before the 2021 legislative session to announce
steps to keep the legislative process accessible to
Oregonians.
“We have never seen a session like
this before. We need to keep mem-
bers and staff safe,” he said. “Legis-
lative staff worked hard to come up
with a plan that is safe and transpar-
ent. Every session, Oregonians make
their voices heard on issues they care
about. We need these voices.”
But if you don’t know what the
Legislature is talking about it’s hard
to voice your opinion. Consider
Courtney’s Senate Bill 846. It’s a
model of translucency, not transpar-
ency. The bill shifts money around.
It also potentially reduces the kicker
tax refund.
Does the language of the bill
clearly state that it potentially re-
duces the kicker? No.
Does it even mention the kicker?
No.
Shouldn’t a bill that potentially
reduces the kicker clearly state that?
Yes, we think so. Do you?
Now if you are fluent in the bud-
get-speak of the Legislature you
could figure it out from the language
of the bill — maybe. What the bill
does, in part, is repeal transfers to
the general fund of $15 million from
the state’s insurance fund and from
an operating account of the Depart-
ment of Justice. The money stays
where it is, at least temporarily. It
just doesn’t get shifted over to the
general fund.
That matters because it effectively
reduces the general fund by that $15
million. That affects the kicker. The
kicker is Oregon’s unique law passed
by voters. It occurs if state revenues
exceed forecasted revenues by 2% or
more over a two-year budget cycle.
If that happens, the excess including
the trigger amount gets returned to
taxpayers.
No final determination has been
made; there will be a kicker for the
2019-2021 biennium. But the kicker
is on target to kick, according to
the latest revenue forecast. And be-
cause SB 846 is moving forward the
amount returned to taxpayers would
be less.
Look, legislators need to be able
to move money around, such as in
this bill. They need to be able to bal-
ance the budget and line money up
how they want to spend it. They also
should be transparent about what
they are doing and clearly state in a
bill if it would reduce the kicker.
Making mask mandates
permanent is temporary
O
regon’s Occupational Safety
and Health Administration,
OSHA, is proposing to make
the mask mandate for workers in
Oregon permanent — temporarily.
Wait, before you scream, let’s be
clear. OSHA does not want to make
it permanent. By law, though, OSHA
can’t extend a temporary rule more
than 180 days. The rule was adopted
in November 2020 and it is set to
expire on May 4, 2021. To be able
to extend the mask-mandate pro-
tection for workers for COVID-19,
OSHA has to put into place a per-
manent rule.
The intent, OSHA stresses, is not
to permanently require masks in the
workplace in Oregon. It’s just that
temporary rules can’t be extended.
So OSHA is going to put in place a
permanent rule and intends to re-
peal it when it is no longer necessary.
Masks work in helping to reduce
the spread of COVID-19. And even
though more and more people are
getting vaccinated, there’s still a
need to keep our guard up. If you
want, more information about what
OSHA is doing, the place where the
information is easiest to digest is
on Oregon OSHA’s Facebook page.
More technical information is avail-
able at tinyurl.com/maskpermanent.
My Nickel’s Worth
City is not protecting residents
Construction has started on the
Steven’s Road tract, beginning with
the area that used to have warnings
to stay on the trail as “this area is haz-
ardous and toxic.” The construction
crew has conveniently removed those
signs and is digging up that soil and
garbage and creating multiple dirt
and garbage piles, each over 2 stories
tall and growing.
On Sunday, due to the high winds
in Bend, that hazardous dirt and all
sorts of garbage, including plastic
shopping bags, were blowing all over
the land and out onto Stevens Road
and sometimes 27th Street. Why
isn’t the city monitoring where that
toxic dirt is being allowed to go and
stopping litter and pollution on our
roads? Requiring the piles to be cov-
ered would have easily prevented this.
The voters did not want this land de-
veloped in the first place as we knew
the issues, but the new city councilors
have their own agendas that conflict
with the voters, including deciding
that people living above caves and
tunnels as well as garbage and con-
taminated soil is their definition of
affordable housing. Where’s the social
justice and equity in that?
— Haley Smith, Bend
Sales tax on cars
Editorials reflect the views of The Bulletin’s editorial board, Publisher Heidi Wright, Editor
Gerry O’Brien and Editorial Page Editor Richard Coe. They are written by Richard Coe.
Our fearless leaders (and I use the
term leaders loosely as they certainly
are anything but) in Salem have de-
cided that we need a sales tax. It did
not matter to them that every time
the idea came up it’s been unani-
mously voted down .
Our so-called leaders (the elite)
know what is best for us (the little
people). Liberal leftist Democrats
are no dummies in getting what
they want regardless of what the (lit-
tle people) want. They knew they
could not call it a sales tax because
that would be political suicide, so
they pushed it through in the dark
of night and called it a privilege tax.
Who knew it was a privilege to be
able to purchase a car in Oregon?
That’s right any new car or truck pur-
chase or a used vehicle with 7,500 or
less miles will have to pay tax. They
are starting out with one-half of 1%,
which doesn’t sound like much, but
just how long do you think it will
be before it gets to 1% and then 2%.
When they get us used to paying,
they will also make it a privilege to
purchase something else. It’s obvious
they are trying to make us into an-
other California because these liberal
Democrats have never seen a tax they
did not fall in love with.
—Charlie Thompson, Bend
It’s a team effort
On March 11 The Bulletin pub-
lished a special article marking the
one year anniversary of COVID-19
reeking death and severe illness
among Central Oregonians. The arti-
cle’s reporters interviewed many and
different residents to share their grief,
struggles and resilience in confront-
ing this historic pandemic.
I was saddened by each person’s
story. Human suffering is difficult
enough to experience; but death of a
loved one—especially the elderly, the
ones most impacted by the virus—in
reading I was deeply moved.
My reflective summation of what
I learned is that Central Oregon is
populated by caring and compassion-
ate citizens—regardless of political
party, age, occupation and economic
security. The newspaper captured
what it means to be in a community
that I appreciate, and am thankful to
experience.
All the workers and volunteers in
the Central Oregon medical facilities
who cared for the infected and who
worked tirelessly, while being ex-
posed to the virus, my extra apprecia-
tion is extended.
Recently while walking in a Bend
park, my new companion turned
out to be a senior health care profes-
sional with a Central Oregon govern-
ment agency. I thanked him for what
his organization did to manage the
COVID-19 onslaught and now the
vaccination program. He demurred
taking credit for our region surviv-
ing relatively better than other areas
in the country. He said it was truly a
“team effort,” and that the practical-
ity and compliance with pandemic
guidelines by Central Oregonians
made the burden lighter.
— Tim Conlon, Bend
Rising mortgage rates are starting to become a problem
BY BRIAN CHAPPATTA
Bloomberg
O
ne of the pillars of the U.S.
economic recovery during the
COVID-19 pandemic is start-
ing to crack.
The red-hot U.S. housing market,
fueled by record-low interest rates, is
one of the most important stories of
the past year when it comes to under-
standing the sharp rebound in finan-
cial markets and the relatively pris-
tine condition of many household
balance sheets. The Freddie Mac 30-
year fixed mortgage rate started 2020
at 3.72%, just 40 basis points above
its all-time low, and plunged to 2.65%
by the start of this year. That drop
in borrowing costs led to all sorts of
astounding figures: The largest quar-
terly volume of mortgage origina-
tions in history; the most refinancing
in a year since 2003; the most debt
taken on by first-time buyers on re-
cord; and a collective $182 billion of
home equity withdrawn during 2020,
or an average of about $27,000 for
each household.
These trends are quickly shifting
just a few months into 2021. U.S.
mortgage rates have increased for
six consecutive weeks, to 3.17%, the
highest level since June. The 50-day
moving average was steady at 2.94%
in the week through March 25, the
first time it hasn’t moved lower since
early 2019. Other longer-term aver-
ages have also plateaued. The mes-
sage is clear: The absolute low for
U.S. mortgage rates appears squarely
in the rear-view mirror.
Not surprisingly, this trend has
squashed the refinancing demand
that prevailed throughout 2020. Refi-
nances as a percentage of total mort-
gage applications have declined for
seven consecutive weeks to 60.9%,
the lowest since July, in a streak that
rivals the longest of the past decade
and will probably only continue.
The days may also be numbered for
cash-out refinancing, which is when
someone not only cuts the interest
rate on a loan but also increases the
size of the new mortgage by borrow-
ing against equity in the house. The
$152.7 billion created through this
practice last year was the most in dol-
lar terms since 2007. My Bloomberg
Opinion colleague Alexis Leondis re-
Letters policy
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cently argued that this carries much
less risk than in the lead-up to the
housing bubble 14 years ago, but that
might not be enough reassurance
to attract those who haven’t already
sought a cash-out refi over the past
several months.
If that were the end of the story,
the outlook wouldn’t be so murky.
After all, it was such an active 2020 in
the mortgage market that a breather
seems only natural. However, by all
accounts U.S. housing demand still
remains solid heading into what is
historically a strong seasonal pe-
riod. Even though new and existing
home sales tumbled in February and
missed estimates, both figures re-
main at levels that prior to the pan-
demic hadn’t been seen since the
mid-2000s bubble. Meanwhile, hous-
ing starts have dropped from what
was the fastest pace since September
2006.
This creates all the necessary con-
ditions for bidding wars. According
to Redfin, only 645,000 residential
homes are for sale in the U.S., down
almost 50% from a year ago and the
fewest in at least five years. As a re-
sult, 36.1% of homes have sold above
their list price, again the largest share
since at least early 2016. Only a sliver
of houses have had to come down in
price because on average buyers are
happy to meet sellers right at their
asking level, which is rare. It’s lit-
tle wonder that the S&P CoreLogic
Case-Shiller U.S. National Home
Price Index reached a record high in
December, increasing 10.4% from a
year earlier. January’s data is officially
released Tuesday — CoreLogic sug-
gests another double-digit annual in-
crease is in the cards.
Rock-bottom mortgage rates
certainly helped take the sting out
of surging home prices in recent
months. An increase of 50 basis
points from a record low might not
seem like much, especially when the
prevailing 30-year rate is still well
below any historical average. But it’s
bound to sting when layered on top
of much higher house prices and
when potential homeowners are in-
creasingly expected to bid above the
listing price, stretching the upper
limits of their target range.
Perhaps a few thousand dollars
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in additional interest pales in com-
parison to Americans’ war chest of
excess savings, estimated at $1.7 tril-
lion from the start of the pandemic
through January by Bloomberg Eco-
nomics. It’s also certainly possible
that homebuilders will rise to the
occasion and increase housing sup-
ply, or that demand could cool as city
centers reopen and renters no longer
feel the need to pay up to own prop-
erty in the suburbs.
Regardless, the housing market
doesn’t look as if it will offer the same
boost to the U.S. economy and finan-
cial assets as it did over the past year,
when Americans locked in savings
through refinancing or scored a re-
cord-low rate on their first home, or
at least felt the “wealth effect” of their
existing property increasing in value.
After 12 months of living with a pan-
demic, the country might be ready to
stand on its own without the support
of record-low borrowing costs. But if
it wobbles, look to mortgage rates as
a likely culprit.
Brian Chappatta is a Bloomberg Opinion
columnist covering debt markets. He is also a CFA
shareholder.
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