HERMISTON — The Oregon Legislature passed a balanced budget and funded new programs and projects this year. But Rep. Greg Smith, R-Heppner, is hoping that the next budget cycle will see a better balance of spending and saving.
Smith, who met with the East Oregonian’s editorial board on Thursday, said the state needs to prepare for the next economic downturn, whenever that may be.
“We balanced the budget and we were able to fund many good projects, but I will share with you that comes at a cost,” he said.
As the most senior member of Oregon’s House of Representatives, and as someone with years of experience on the Legislature’s revenue and spending committees, Smith knows that Oregon’s revenue won’t stay “sky high” forever. And when the economy starts its next downward fluctuation, reduced revenue will mean cuts unless the state sets aside more money now.
The Oregon Health Authority is of particular concern, Smith said. Nobody wants to see people lose their health insurance, but if there’s a drop in revenue and the state wants to continue funding everyone on the Oregon Health Plan, “that has to come out of education and public safety.”
One solution for setting money aside would be changing Oregon’s kicker law. Currently, if tax revenues come in more than 2% higher than the state economist forecast for that biennium, the excess revenue is returned to Oregon taxpayers in the form of a rebate check based on income. It takes a two-thirds majority vote in both houses of the Legislature to divert any kicker money elsewhere.
Smith called the kicker “bad tax policy,” but said he couldn’t see Oregonians voting to do away with it altogether anytime soon.
“There no doubt in my mind we need to set aside excess revenue, but people don’t trust the Legislature,” Smiths said. “They think we’ll use it to backfill PERS.”
That’s exactly what Gov. Kate Brown proposed in May. Under her proposal, the next kicker would be capped at $1,000 per person and the extra $500 million would be put toward helping K-12 schools with pension costs, with a small amount also going toward rural broadband and housing.
House Speaker Tina Kotek also introduced a bill this summer to use half of the kicker for seismic upgrades to Portland-area interstate bridges and pollution-fighting initiatives.
Neither proposal went anywhere.
Despite worries the state isn’t saving enough for a rainy day, overall Smith was pleased with many outcomes of the 2019 session. His first focus is always taking care of the five counties in District 57, he said, and the district came away with several policy and funding wins.
While a wide variety of priorities in Umatilla and Morrow counties did get funded, including a mental health-focused upgrade for the Umatilla County Jail and funding for more early childhood education classrooms in the area, Smith said one of the things that remains to be funded is a behavioral health center in Morrow County.
He had hoped that the jail upgrade in Pendleton would help serve the Morrow County area too, but said further conversations with law enforcement have helped him see Morrow County needs funding to take care of people in crises closer to home.
Smith said during the next two legislative sessions he also wants to see more focus on initiatives to help community colleges and other higher education, as they were “neglected” in this session’s focus on early childhood education and K-12 funding.
He said the Legislature also needs to come up with a way to balance concerns about pollution and climate change with concerns about stifling business and industry. The Senate Republicans’ walkout put a halt to the cap-and-trade bill this session, he said, but that issue is not going away.