OREGON AFSCME
e-lert
#18 ¥ May 15, 2009
Edited by Don Loving, Council 75 Public Affairs
Director
Is it good news if bad news
isn't quite as bad as you thought it might be? That's the question of the day
now that the May 15 state revenue forecast has been released in Salem. We
expect to see rapid budget writing now that the number is out. The Republicans
have their own plan that sounds intriguing at first blush, though it has holes
of its own upon closer scrutiny.
Alas, it's a
numbers-dominated e-lert, though
we've found a handful of other news as well!
* * *
IT'S HARDLY 'GOOD NEWS,'
BUT — If every gray cloud indeed has a silver lining, you
could perhaps argue there was at least a glimmer of silver in today's
announcement of the latest state revenue forecast.
The shortfall for the 2009-11
biennium was pegged at $3.8 billion by state economist Tom Potiowsky. Initial reports in the Oregonian had the number at $3.6 billion, but as of this
writing Oregon AFSCME Political Coordinator Mary Botkin reports that $3.8 is the number du jour at the capitol.
On top of that, Potiowsky
reported that the state is short another $350 million to finish off the
current, 2007-09 biennium. That number was considerably higher than anyone
expected.
Still, add them together and
you get somewhere in the $4.1 billion range, and while that certainly isn't
good news, it's not as bad as many people expected. The Legislature had been
wrestling with preliminary 2009-11 budgets based on projections of a $4.4
billion shortfall for that biennium alone. So again, it's hardly "good news,"
but ....
"It's bad, but it's not as
bad as many people — including myself — thought it would be," said
Oregon AFSCME Political Coordinator Ralph Groener, the union's lead lobbyist on all revenue issues.
"There are certainly some challenges ahead, but at least the numbers are within
the parameters of what we've been talking about for the last two months, which
is good within that context. It could easily have been worse."
Potiowsky said Oregon has
recorded job losses for five consecutive quarters. As mentioned in last week's e-lert, job losses are the ultimate whammy in Oregon's tax
system. Even though there are indications that the national economy is
beginning to pick up, there is a time lag for Oregon to catch up because we are
one of four states with no type of consumption tax — i.e., a sales tax.
In sales tax states, as soon
as people feel better about the economy they begin to spend money again, and
those states see that benefit immediately in their sales tax collections. But
the Oregon General Fund is based primarily on state income tax receipts, which
don't pick up until people are back to work and earning an income. Like it or
hate it, "good" or "bad," it's simply the way it is — and it's why Oregon
is a little slower to fall into a recession than other states, but also why it
takes us longer to recover.
So now what? Legislators will
digest the numbers over the weekend, but Joint Ways and Means Committee
Co-Chairs Sen. Margaret Carter
(D-Portland) and Rep. Peter Buckley
(D-Ashland) are expected to release a spending plan as early as Monday. "I
think we'll know a lot more about our budgets by Tuesday at the latest," opines
Groener.
You'll then hear some
wrangling between that plan and one proposed by Republicans earlier this week
— and we give them their time below — before, ultimately, some
compromise is hammered out between now and June 30, the target date for
adjourning the 2009 session. Remember, lawmakers have already announced plans
to return in special session come February 2010 to tinker with the budget again
halfway through the 2009-11 biennium.
State Rep. Mary Nolan (D-Portland), a Ways and Means co-chair in 2007 and
serving as the House Majority Leader this session, told the Statesman Journal her party is eyeing both cuts and tax increases.
"To work our way out of this
economic crisis, we must take a balanced approach that involves cutting
spending, tapping our reserve funds and asking big corporations and the
wealthiest Oregonians to contribute their fair share," she said.
About 90 percent of the
General Fund goes to education, health and human services and public safety,
which includes the Department of Corrections, where there are over 3,000
AFSCME-represented employees. By far the biggest slice of the General Fund pie
goes to Oregon's 198 K-12 school districts, which get almost three-quarters of
their income from the state.
* * *
THE GOP BUDGET ALTERNATIVE — Yours truly and Botkin spent about a
half-hour Wednesday afternoon with state Sen. Ted Ferrioli (R-John Day) and three of his staffers as they sat
and walked us point-by-point through the Republican budget alternative, which
was announced earlier this week with great fanfare by the GOP.
The Republican budget
purports to duplicate every cent from the 2007-09 biennium and toss in a $1.4
billion surplus as well. No more cuts to schools, prisons or human services. No
pay raises or step increases for state employees, by the way, but no mandatory
unpaid leave days either. Some of the surplus, said Ferrioli, could be used to
fund Measure 57, which will send more people to state prisons.
"All we're doing here is
asking administrators to re-run their 2007-09 budgets in this next biennium,"
said Ferrioli. "There's very little inflation right now, and we believe good
managers could do this."
While it all sounds good in
theory, Democrats say the Republicans' proposal contains flawed assumptions
about income projections, use of other-fund reserves and savings from spending
cuts.
Moreover, as a May 14 Oregonian editorial pointed out, the plan isn't based in reality. The GOP
budget plan uses the March revenue forecast numbers; the new May numbers are
much worse. That's strike one.
Strike two is that the plan
doesn't account for the increased demand for many state services due to the
economy. Unemployment benefits, any number of social and senior services
— there are way more people needing help because of the economy in 2009
than there were when 2007 dawned. The $350 million budget gap left in the
2007-09 biennium underlines that fact. Inflation or not, increased demand for
services eats up more money.
Strike three is the portion
of the plan Republicans are most proud of: not a nickel in new taxes. Oregon
AFSCME has been clear with the governor, legislators and state negotiators at
the bargaining table: our union is willing to discuss "shared sacrifices" as we
work our way through this budget crisis, but at the same time the Legislature
must raise revenue. The situation cannot be resolved only through cuts.
Relative old-timers will recall that the last time Oregon faced a recession
this severe, in the early 1980s, it was Republican Gov. Vic Atiyeh who led the fight for a temporary income tax
surcharge to see the state through.
You can pick up some more
detail on both sides of the issue by reading the aforementioned Oregonian editorial.
* * *
OLCC BUDGET — One budget that's already on the AFSCME front
burner is that of the Oregon Liquor Control Commission, an agency that includes
some 200 Council 75 members of Local 2505.
Botkin says a cadre of
lawmakers has been working full steam ahead on cutting the OLCC budget by 30
percent, an idea she deems "ludicrous." Of any state agency, it seems odd that
lawmakers would target the OLCC. It's not a General Fund agency, it is
fee-supported. And unlike other fee-supported agencies, it doesn't just pay for
itself — it makes a distinct profit for the State of Oregon.
Last biennium the OLCC
"profits" put an extra $178 million into the General Fund. Liquor sales
revenues also accounted for an additional near $100 million doled out to
counties, cities and drug and alcohol programs statewide. Yet it appears to be
the lead agency on the chopping block. Why?
"There are lots of reasons,"
said Botkin. "One, they have no presence in the building any more. They let
their longtime 'lobbyist' go. If you want to get technical, state agencies
don't have 'lobbyists' per se, but in reality they do. The chairman of the OLCC
Commission is here periodically, as are other agency management staff, but they
don't have the everyday presence they used to. The only person who looks out
for the OLCC on a day-in, day-out basis is me, and I can't give them all of the
attention they need."
The OLCC "agents," the
contracted retailers who run state liquor stores, have a loose affiliation and
their own contract lobbyist, and Botkin says to many legislators, especially
the many new ones, that lobbyist is the face of the OLCC.
"But what's good for the
agents isn't necessarily what's good for the agency," said Botkin. "Indeed, the
agents' issues pretty much come down to one thing each session: they want a
greater slice of the revenue. Then you add in the factor that we have a bunch
of younger, originally from out-of-state legislators who really aren't
philosophically opposed to the idea of privatizing the OLCC. They grew up in
states where hard booze was available at their Fred Meyer equivalent, or
Safeway. Every session there's a lot of education to do on why we have the
system we have and why it works for us and funnels money into the General Fund.
It's a battle, and lots of times it feels like we're fighting it alone."
Botkin says it will be a
relief to see an actual OLCC budget proposal now that the revenue forecast is
in.
"I need to see real numbers
on paper, and then we can mobilize our local union to help the fight to save
the agency that makes money for the state," said Botkin. "A 30 percent cut
would mean products wouldn't get on shelves in a timely manner, so sales
numbers would go down. We've talked before about how the phrase
'across-the-board cuts' makes for a great sound bite, but makes little sense
when some logic is applied. The issue in Oregon is with the General Fund. OLCC
doesn't draw a single cent from the General Fund, but puts $178 million into
it. Why would you cut a single employee? It sounds trite, but it just doesn't
make any sense."
* * *
PUBLIC CONTRACTING (OUT) — Amidst all of the budget hullabaloo, a work
session was scheduled today (May 15) for HB 2867, a public contracting bill that's a favorite of
Oregon AFSCME Political Coordinator Joe Baessler.
If passed, HB 2867 would put
some real speed bumps in public jurisdictions' ability to contract out work.
First, that jurisdiction would have to perform an in-house feasibility study on
the matter. If that study came back positive, the agency would next have to do
a cost/benefit analysis that outlined what Baessler terms "true efficiencies"
of the proposed contracting out.
"What the bill specifically
says is that those efficiencies cannot simply be the fact that employees would
be paid less and receive less benefits from a private contractor," said Baessler.
"The contracting out would have to save money somehow elsewhere — there
would be no contracting out on the backs of the employees."
* * *
THE GREAT COVER-UP — As reported last week, SB 519 was a top priority bill for the Oregon AFL-CIO and strongly
supported by Council 75. This was the "anti-captive audience" bill that would
have banned employers from making it mandatory for employees to attend meetings
and blast unions or union organizing drives. The AFL-CIO thought had exactly
the 16 votes needed for passage on the Senate floor when SB 519 came up on May
7.
Then everything went sideways
quickly, and after a couple of procedural moves the bill was sent back to the
Senate Rules Committee, where it may very well die. Labor lobbyists were outraged,
because that scenario meant that one Democratic senator who had committed to
vote for the bill had backed out at the last minute without telling anyone.
The story got murkier this
week. While all informed speculation points at one particular senator, we have
not been able to confirm whether or not that legislator is indeed the culprit.
The leadership from both parties has closed ranks and will not release the
name, forming an as yet impenetrable cone of silence.
"I'm not positive that every
'rank-and-file' senator knows who it was," said Botkin in answering how such a
secret could be kept in a building not known for keeping secrets. "I'm
convinced that the leadership of both parties knows, and I'm still convinced
this is a dirty deal. We have deep suspicions on who the offending party is,
but it would be entirely inappropriate for me to speculate until we can confirm
it. I know that's frustrating to our readers, but at this point we have no
choice."
The whole fiasco will
apparently lead to a major pow-wow soon between AFL-CIO leadership, big-wigs
from the major unions and leadership of both the House and Senate Democrats.
Botkin and Oregon AFSCME Executive Director Ken Allen will be representing Council 75 when that meeting
occurs.
"We need to look them in the
face and ask how this could happen to one of our priority bills," said Botkin.
"They have some questions to answer."
* * *
Here is an AFSCME Green update from Leslie Kochan of Local 3336 (DEQ) ...
KEEP THE HEAT ON — Last week AFSCME Green activists and AFSCME members were
asked to make calls and send e-mails to their legislators on HB 2186 and SB 80. These bills are two of the top
climate change bills for the 2009 legislative session.
HB 2186 is key to reducing greenhouse gas emissions from transportation.
It passed the House last week on a narrow 32-28 vote. Your efforts
contributed to this win! HB 2186 will now be assigned to a Senate Committee and,
assuming it passes there, will then be sent to the Senate floor for a final
vote. We'll let you know when it's time to help us push this bill through to
victory.
Now we need you to help push SB 80 through the Joint Natural
Resources Subcommittee. This committee is key to moving SB 80 to the Senate floor for a vote. SB
80 provides the framework Oregon needs to make the necessary reductions in our
global warming pollution. It establishes a Climate Council to coordinate state
efforts and shares planning between state agencies including the Oregon
Department of Environmental Quality (DEQ) whose employees are represented by
AFSCME Local 3336. Implementation of this bill will ensure that Oregon develops
the most effective strategies for reducing greenhouse gases.
Please contact your legislator(s) and emphasize the
following:
á Climate change is happening in
Oregon. We cannot wait to take action. SB 80 is central to Oregon's ability to
chart a course to reduce greenhouse gas emissions.
á Funding to implement this bill is
critical. Legislators must get creative and find a way to fund positions for
the state agencies that will be responsible for implementation. These represent
a small number of positions and there are options that will not require use of
money from the General Fund.
á State agencies must maintain current
authorities for addressing greenhouse gases.
Please contact members of the Joint Ways and Means Natural
Resources Subcommittee, particularly if your senator or representative is on
that committee (you can send an e-mail to the two co-chairs if you don't have a
rep or senator on the committee).
The co-chairs are Sen. Vicki Walker (D-Eugene) and Rep. Bob Jenson (R-Pendleton). Committee
members include Sen. Jackie
Dingfelder (D-Portland), Sen. David
Nelson (R-Pendleton), Rep. Peter
Buckley (D-Ashland), Rep. Ben
Cannon (D-Portland), Rep. Brian
Clem (D-Salem), Rep. Chris
Edwards (D-Eugene) and Rep. Jim
Thompson (R-Dallas).
* * *
'KAY BELL' RESONATES IN SALEM — A former teacher and
counselor who spent her entire career pretty much minding her own business is
the impetus behind SB 897, a measure that will place some responsibility on public
employees to make sure their PERS records are correct.
Kay Bell was an Oregon Education Association member who retired
based on the calculations given her by PERS, only to have PERS later tell her
they had made a mistake and would be taking $1,100 per month away from her
benefit check. In 2008 Oregon courts ruled for Bell in her eponymous case,
finding PERS liable for over $200,000.
SB 897 does lots of little "housekeeping" things pertaining
to PERS, but includes two pieces of interest to the unions that make up the
PERS Coalition, including AFSCME. One is a provision that establishes a
verification process for potential retiree employment history and subsequent
benefit level — in other words, a process to avoid any more Kay Bells in
the future. AFSCME supports the legislation.
"It will put some responsibility on the employees to verify
their employment history," said Botkin. "But we support it because it's in our
members' own best interests, and it will be really simple. As part of your
pre-filing for retirement, you'll be given a sheet that outlines what PERS has
on file as far as what agency you worked for and how many years you were there.
You will be obligated to double-check that information and sign-off that it's
correct. Over 99 percent of the time I'm sure it will be dead on, but it should
be checked and double-checked."
The other provision the unions like in SB 897 is a change
that would allow the designated labor representative on the PERS Board to be
either an active member or a PERS retiree; currently, it must be an active
member.
"We'll still have our designated seat, that doesn't change,"
said Botkin. "We want to be able to pick the best person to represent members,
and that person could very well be a retiree. It simply gives us more options,
and that's a good thing."
Botkin notes that with both PERS and the PERS Coalition
supporting the bill, SB 897 should have relatively clear sailing through the
Legislature. It is awaiting some minor amendments right now but should move
through committee soon.
* * *
Some odds and ends outside the capitol ...
DOCTOR BACK IN THE (MAHONIA) HOUSE? — We haven't shared any new
gossip with you lately about the 2010 Oregon governor's race because, frankly,
there hasn't been any new gossip.
Rumors persist that former
Gov. John Kitzhaber is seriously considering an attempt to regain Mahonia Hall. If
you're wondering, yes, he is eligible. Oregon law prohibits a governor from
serving more than two consecutive
terms, but once he or she sits out one term, they can once again re-run if they
so choose. One twist on Kitzhaber's possible candidacy: some pundits say he'd
only seek one term. Of course, that could change, too.
U.S. Rep. Peter DeFazio (D-Ore.), rumored many times over the years to be
interested in the job, apparently is now enjoying his new roles in Congress
with Democrats in the majority and isn't interested in the governor's position.
On the Republican side, I
suppose you could say Allen Alley
is the leading candidate. That's because at this point in time, Alley is the
only official candidate — he launched his campaign earlier this month.
Alley was a relative political unknown with deep ties to the business world
— as well as a stint on the staff of current Gov. Ted Kulongoski — when he ran a surprisingly credible campaign
last fall against Ben Westlund for
state Treasurer. Still, the big elephant in the room (sorry, couldn't pass that
one up) is former U.S. Sen. Gordon Smith (R-Ore.). Should Smith run, it's hard to imagine him not winning the
GOP primary.
* * *
THE VEEP TALKS TO AFSCME — U.S. Vice President Joe Biden was the featured speaker earlier this week at the
2009 AFSCME Legislative Conference in Washington, D.C.
Biden drew national coverage
of his comments that unions are the key to rebuilding America's middle class.
He made that statement during a discussion of the Obama administration's
continuing support of the Employee Free Choice Act. You can read the entire
story on the Associated
Press website.
* * *
OLD FACE, NEW PLACE — With obligatory apologies to the person who
hired me at AFSCME for referring to his face as "old," Cecil Tibbetts has a new gig with Washington AFSCME Council 28,
better known up north as the Washington Federation of State Employees (WFSE).
Tibbetts, the Council 75
Executive Director from 1981-1993, recently completed a five-month stint as a
temporary staff rep in the Bend field office. Earlier this month he was named
WFSE's new Director of Negotiations.
You can fully catch up with Tibbetts'
story on our website.
* * *
VOTE FOR CHUCK — Finally this week, a last reminder here for
Multnomah County residents to vote for Chuck Moffit for the at-large position on the Multnomah ESD Board
of Directors. Moffit retired from Local 189 and the City of Portland last year,
retired as Council 75 Treasurer last month and is now active in Retirees Local
155. MESD was the site of an ugly two-week strike by AFSCME Local 1995 in late
2007 and definitely needs some new perspective on its board. Moffit has the
endorsement of Local 1995, Council 75 and that of the Oregon Education
Association, which represents classroom teachers within MESD.
Local 1995 has also endorsed
former Multnomah County Sheriff Bernie Guisto and recent Multnomah County Commission candidate Mike
Delman, who are running unopposed for
two other MESD board positions. Delman was at one time many years ago a
part-time, Council 75 project staffer.
You have until 8 p.m. on
Tuesday night (May 19) to return your ballots.
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