politics

Oregon Legislative Special Session 2018: What You Need To Know

By Dirk VanderHart (OPB)
May 21, 2018 1 p.m.
The Oregon Capitol in Salem.

The Oregon Capitol in Salem.

John Rosman / OPB

Monday morning, Gov. Kate Brown will convene her first special legislative session since she became governor in 2015. The

THANKS TO OUR SPONSOR:

Oregon Constitution

(Article 5, Section 12) gives the governor mandate to call such sessions for “extraordinary occasions.” Plenty of people argue Brown’s reason for the session — a new tax break for some small businesses — doesn’t amount to that.

Regardless, Brown’s decision to call legislators into session creates an interesting scenario as she vies for re-election — and has inspired criticism from all sides. Here’s what you need to know.

Why Now?

In early April, Brown announced she'd sign Senate Bill 1528. It ensured that tax breaks from recent federal tax reforms wouldn't also be included in Oregon taxes, rankling Republican and business interest groups.

So Brown decided to offer something in exchange: a favorable tax rate to a group of small businesses called sole proprietors. These businesses were left out in 2013, when then-Gov. John Kitzhaber hashed out a "grand bargain" that extended tax breaks to some other businesses. (That was also the last time the Legislature was convened for a special session.)

Brown has argued this is a matter of fairness, saying creating relief for small businesses is reason enough to call a special session.

How Much Money Is At Stake?

Not a lot. State analysts believe the reduced tax rates would reach roughly 12,000 businesses, and amount to about $11 million a year. That's a pittance in the context of a $20 billion general fund budget.

But the tax cut has also been criticized for a familiar reason: Roughly 75 percent of the benefit is expected to go to businesses that make more than $200,000 a year. Democrats in recent years have railed against the 2013 tax cuts because they inordinately help well-off businesses. The House even voted to trim those cuts last year, though the bill died in the Senate.

So Who Wants This?

Not many people. Republicans say Brown is playing politics in an election year, and some have been scathing in their criticisms.

THANKS TO OUR SPONSOR:

“What is the extraordinary occasion here? Where is the so-called 'emergency' prompting the Governor to call all 90 legislators into special session?” Sen. Herman Baertschiger, R-Grants Pass, wrote in a statement on May 17. “All I see is a political sham, a waste of taxpayer money, and an abuse of power.”

Democrats, meanwhile, think that even $11 million is too big a break. They’ve suggested making the bill revenue-neutral, and they’ve talked about reducing the income that applies to the reduced rates. Currently, businesses with up to $5 million in income can get a break.

Will It Pass?

It depends on what the proposal winds up looking like. Some have suggested legislators will hold their noses to pass Brown’s relatively minor change.

But you can also expect lawmakers to try to convince their colleagues to adopt changes. Sen. Brian Boquist, R-Dallas, says he’s planning to introduce three amendments to the bill. One would extend roughly $25 million in tax credits for Oregon businesses. Democrats might propose changes as well.

Depending on the outcome of those discussions, lawmakers will need to decide whether they support the bill. Will Democrats go against their party’s leader? And would Republicans be willing to oppose a tax cut for businesses — however small? Those are central questions of the session.

How Long Will The Session Last?

Brown has said she’d like lawmakers to get it done in a day, which isn’t unheard of. Two of the last five special sessions have lasted only one day.

But lots of people have their doubts that’s feasible this time around.

First, Republican votes will be necessary to suspend legislative timetables, and Republicans have said they’ll refuse to go along if they don’t like where the session is headed.

Even if they do agree to throw out the rules, the level of controversy around Brown’s proposal will likely involve lots of discussion and debate — both when the bill is before a joint House-Senate committee, and when it reaches the floor of the House and Senate.

What’s At Stake?

Brown’s reputation, for one. If she can’t muscle through this proposal, she’ll suffer a black eye as she tries to convince voters once more that she’s the effective leader Oregon needs.

Are Any Other Issues Up For Discussion?

Democratic leaders have been clear that they want to limit the special session to the issue of business taxes, but that hasn’t stopped discussion about other stuff.

Rumors have circulated about gun control legislation, and state Rep. Knute Buehler — the Republican nominee for governor — has called on Brown to take up school oversight issues.

None of those issues appear to have traction.

THANKS TO OUR SPONSOR:
THANKS TO OUR SPONSOR: