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STATE MyEagleNews.com Wednesday, July 22, 2020 A9 Budget writers unveil rebalancing plan for state By Peter Wong Oregon Capital Bureau The Oregon Legislature’s chief budget writers have pro- posed to shield state aid to schools, but to cut almost $400 million in other spending and draw down reserves to offset reduced tax collections during the coronavirus pandemic. Elements of their plan, which legislative leaders released Thursday, July 16, will undergo public hear- ings next week. Each of the six budget subcommittees has been assigned a target for spending cuts. Gov. Kate Brown and leg- islative leaders have said a second special session will be called later this summer — lawmakers already met June 24-26 — to deal with a two- year budget that is projected to fall about $3 billion short in anticipated tax collections. The original budget from the tax-supported general fund and lottery proceeds, which constitute the state’s most flex- ible spending, topped $23 bil- lion. Lottery proceeds also are projected to be down, largely because the Oregon Lot- tery’s chief moneymakers are video terminals in bars and restaurants, which have cur- tailed operations during the pandemic. The rebalancing plan does not take into account new fed- eral aid to states that Con- gress may or may not include in a new coronavirus recov- ery effort. The Democratic-led U.S. House already has passed a $3 trillion plan with aid to states included, but the Repub- lican majority in the Senate has balked at the price tag. The Legislature leader- ship’s press release says: “The scale of this crisis highlights the critical need for further federal action to support state investments in essential ser- Lawmakers OK fund for $500 checks for pending unemployment applicants By Peter Wong Oregon Capital Bureau Oregon lawmakers have cleared the way for some unemployed people to obtain one-time checks of $500 if they have been waiting for weeks to obtain unemploy- ment benefits. The Legislative Emer- gency Board voted July 14 to approve a maximum of $35 million for an estimated 70,000 claimants, most of whom are newly eligible for benefits as a result of con- gressional action in March. Self-employed people, inde- pendent contractors, gig and temporary workers were ineligible for benefits before the coronavirus relief bill became law. The checks will not count against future unemployment benefits, and unless fraud is involved, recipients will not have to repay the emergency aid. More than 500,000 claims have been filed for regular benefits since mid-March, and most of that backlog was eliminated by June 12. But federal law requires states to ensure that newly eligi- ble workers for Pandemic Unemployment Assistance do not qualify for regular benefits. House Speaker Tina Kotek, D-Portland, and Sen- ate President Peter Court- ney, D-Salem, proposed the $35 million from the state’s $1.4 billion share of aid from the coronavirus relief bill to offer some relief for appli- cants who have been waiting for weeks. “I don’t want to blame the Employment Department,” Courtney said. “I want to do something.” Kotek said details are still being worked out. But she said banks and other finan- cial institutions are willing to take part, knowing that whatever they pay out will be repaid by the state — and it’s not an issue of cash flow for them. “If we set up an applica- tion process and eligibility criteria quickly, individuals could apply very soon … and they could get paid,” she said. Sen. Betsy Johnson, D-Scappoose, said she knows of people who have resorted to selling their cars and other possessions to stay afloat financially. But she said she is concerned about the lack of a distribution process. “These people have lost hope. They are absolutely frantic and desperate,” she said. “But if we say we have a finite amount of money and it’s first-come, first-served, I do not know what that is going to look like in the bank lobbies.” EO Media Group file photo The Oregon Legislature’s chief budget writers have proposed to shield state aid to schools, but to cut almost $400 million in other spending and draw down reserves to offset reduced tax collec- tions during the coronavirus pandemic. vices that provide safety and security for all Oregonians, including the state’s most vul- nerable populations.” The co-chairs of the Legis- lature’s budget committee are Sens. Betsy Johnson of Scap- poose and Elizabeth Steiner Hayward of Beaverton, and Rep. Dan Rayfield of Corvallis. All are Democrats. Their plan agrees with Brown’s stated goal of a $9 bil- lion state school fund, which the Legislature set in its original 2019-21 budget it approved last year. (About half that money already has been paid to Ore- gon’s 190 school districts; July 1 marked the start of the sec- ond year of the state’s two-year budget cycle.) From the plan: “The fund remains at $9 billion, sparing students and teachers from dev- astating program cuts amid the uncertainty of the pandemic and holding critical investments in public education harmless at a time of great uncertainty.” To do so, the plan proposes to draw $350 million from the Education Stability Fund, the reserve lawmakers created and voters approved in 2002 from Oregon Lottery proceeds. This amount will reduce the fund by just under half; lawmakers can- not spend the entire fund in a single budget cycle. The plan also proposes an ending balance of a little over $200 million, the bare mini- mum in recent decades. The balance is usually carried over into the next cycle, which starts in mid-2021. Among other programs listed by the co-chairs as pri- orities for “preservation” are state aid to community colleges and state universities, Oregon Opportunity Grants for college students, housing stabilization, some health care and child wel- fare services, state prisons and community corrections, resi- dential treatment capacity for youths, current Oregon State Police trooper levels and labs and medical examiners. Their plan also lists specific programs within several agen- cies: Agriculture, Forestry, Jus- tice, Veterans Affairs and Water Resources, plus tax adminis- tration in the Department of Revenue. But the plan calls for the six budget subcommittees to come up with a total of $387 million in other spending cuts. In addition to $350 mil- lion from the Education Sta- bility Fund, the plan proposes to channel back into the gen- eral fund a total of $213 mil- lion that the original budget earmarked for lessening the unfunded liability of school districts and other local gov- ernments for public pensions. However, the plan proposes to leave untouched the state’s gen- eral reserve fund, which is esti- mated at $949 million. Merkley isn’t sanguine that Senate will come to our rescue By Peter Wong Oregon Capital Bureau As he heads back to Wash- ington, D.C., U.S. Sen. Jeff Merkley is pessimistic about how much the Senate’s Repub- lican majority is committed to extending higher unemploy- ment benefits or providing more aid to states and communities in the next federal coronavirus pandemic plan. The Senate reconvenes Monday after a two-week recess. Unlike the Democrat- ic-led House, which passed a $3 trillion follow-up aid plan back on May 15, Senate Republi- cans will unveil their plans next week — as the extra $600-per- week unemployment benefit in the CARES Act is set to expire. Merkley, an Oregon Demo- crat, said it’s a different process than the bipartisan agreement that resulted in the $2.2 trillion CARES Act just four months ago. “This is Mitch McCon- nell’s strategy,” Merkley said. “Instead of having a bipartisan working group trying to pro- duce a bill, it’s been about put- ting out a Republican plan and making it as partisan as they can. That is not helpful at all.” Merkley spoke in an inter- view Thursday, July 16, before a virtual town hall meeting — his 11th so far this year — with Multnomah County residents. He now has conducted in-per- son or virtual meetings in 34 of Oregon’s 36 counties this year, for a total of 430 in almost 12 years in the Senate. The extra $600-per-week benefit ends July 31 unless Congress extends it. T h e House plan, U.S. Sen. Jeff known as the Merkley HEROES Act, proposes to extend the extra benefit through January. Sen. Ron Wyden, Merkley’s colleague, has proposed to tie the extra benefit to unemploy- ment rates in each state so that the amount declines when the rates drop. “It has been a lifeline for so many Americans who have lost their jobs, and we are talking about tens of millions of people who lost jobs in a short period during an unprecedented col- lapse of our economy,” Merk- ley said. “We are not anywhere near through this pandemic. We are going to have to have some extension. That is going to be a key piece of the bill that we hope to produce in the next two weeks.” Though Oregon’s unem- ployment rate has fallen from a peak of 14.9% in April — after a record low 3.5% in March — the decline was to 14.2% in May and 11.2% in June. Ore- gon’s peak during the 2007-10 recession was 11.9%; the high- est was 12% during the 1980-82 recession. More than 30 million workers nationally are still unemployed. A lifeline for states Meanwhile, Oregon’s per- sonal and corporate income tax collections — which account for more than 90% of the state’s general fund — are projected to drop by almost $3 billion for the rest of the state’s current two- year budget cycle. The Legisla- ture’s chief budget writers have proposed an outline for spend- ing cuts and fund shifts, includ- ing drawing down reserves, but say federal aid is needed as a cushion against further spend- ing cuts. “All states need federal assistance right now. I am glad we have a state rainy-day fund, but it’s not going to be suffi- cient for the challenge we face this year and next,” Merkley said. “We may not get it done at the level the House has passed. But the idea that we are going to back our cities, counties and states is fundamental to getting us through this crisis together as a nation.” The House plan proposes $915 billion, nearly a third of the total, for aid to state and local governments in install- ments through May 2021. Merkley said Oregon would get $5 billion, and local gov- ernments just under $4 billion, under that plan. McConnell once suggested that states consider bankruptcy as an alternative — though Con- gress would have to pass a law to allow it, since unlike local governments, states cannot go bankrupt. He has since eased off that stance, but Republicans still resist aid. The CARES Act gave states $150 billion — Oregon got $1.4 billion and Portland, Mult- nomah County and Washington County just under $280 million — but requires all the money to be spent on expenses related to the pandemic. None of it can go to offset budget shortfalls. Merkley also said McCo- nnell has been key in block- ing Senate action on polic- ing reform, unlike the House, which passed a plan on June 25. The Senate’s majority Republi- cans failed on a procedural vote the previous day to advance their plan because Democrats said they were shut out of any involvement in writing it. “This is another situation where McConnell, instead of having a bipartisan group work out a plan, said he was going to do a Republicans-only bill,” Merkley said. The bill developed by Sen. Tim Scott of North Carolina, the Senate’s only Black Repub- lican, proposed what Merkley called “studies and incentives, but little else.” “There was nothing that constituted real reform,” Merkley said. “Democrats refused to participate in a pro- cess that was rigged without any commitment to amend- ments to be debated and voted on the floor. “I think McConnell is happy with saying we tried, we put for- ward a bill that provides enough political protection for us — and we failed. I am not optimis- tic that, under his control, there will be a bill of any substance addressing the systemic racism in a public safety setting.” BURNT RIVER SCHOOL (Unity Oregon) Join our Brick & Mortar Program • Students will attend school in our building daily, observing social distancing requirements • Four day school week • We currently have a few openings in our residences • For Inquiries call Lou Lyon at 541-446-3466 • Natural Resources program • Wood and metal shops, greenhouse, partnerships with EOU, TVCC and BMCC • Student to teacher ratio of 6/1 S198581-1 We will be closing early starting July 27, 2020 at 4:30 daily. New Office Hours: Monday-Friday 8am to 4:30pm. S195887-1 195 N. Canyon Blvd., John Day, OR. 97845 www.MyEagleNews.com 541-575-0710 S199066-1
