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Brown changes minimum wage plan

New plan would boost minimum to $14.50 in Portland and $13.25 in rest of state by 2022.

Gov. Kate Brown’s minimum wage proposal apparently was unpopular enough that the governor revised it Friday.

Brown’s revised plan sets lower minimums than the original and begins boosting wages to $9.75 six months earlier, starting in July 2016.

Under the new proposal, the minimum would gradually climb from the existing $9.25 to $14.50 in the Portland metro area and $13.25 in the rest of the state by 2022.

Her former plan called for minimums of $15.52 in the Portland area and $13.50 in the rest of the state by 2022.

“Based on feedback from stakeholders, I have refined my proposal, beginning implementation in 2016, so workers get higher pay sooner, and extending the glide path to give businesses more time to prepare for higher wages,” Brown said in a statement.

The fiscal office released a report Friday that analyzed the cost to state government in one biennium of hiking the minimum immediately to $13.50 or $15 per hour.

Legislative Fiscal Officer Ken Rocco said the actual cost per biennium is difficult to calculate because there are multiple proposals, and all of the proposals raise the wage gradually rather than all at once.

“It would never happen all at once,” Rocco said. “No one is going to say we are going to raise minimum wage from $9.25 to $13.50. It’s all phased in.”

Immediately boosting Oregon’s minimum wage to $15 an hour could cost the state in excess of $140 million next biennium, according to the analysis.

The estimate excludes costs to local governments and any indirect costs such as higher paid public employees who might seek a corresponding raise.

Costs to K-12 education would be around $52 million. Pay for certain classified public employees such as entry-level assistants and custodians would cost $4.8 million. Universities estimate their costs would be on order of $75 million in the next biennium. The cost would be between $5.25 million and $9 million for community colleges, under the governor's previous plan.

Higher education officials "point out that, in general, an increase in wages for student workers is likely to reduce other assistance the students receive, including federal aid,” the fiscal office report stated.

The higher minimums also could affect workers’ eligibility for state assistance such the Oregon Health Plan, food assistance program, school lunch programs, subsidized preschool, and student financial aid.

It’s unclear how much a $15 minimum would cost local governments, including school districts. Oregon Employment Department data suggests an increase to $13.50 could cost about $50 million more per biennium for local governments, according to the legislative fiscal office.

Linn County commissioners conducted their own estimate in which they forecast Brown’s previous minimum wage proposal could cost local governments $450 to $500 million dollars a year.

The commissioners wrote in a letter to Brown that they believe the former proposal was “financially irresponsible” and an unfunded mandate.

By Paris Achen
Portland Tribune Capital Bureau Reporter
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