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
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distancing requirements
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• 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
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July 27, 2020 at 4:30 daily.
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