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State revenue forecast better than predicted

by: Courtesy photo Rep. Brad Witt (D-Clatskanie) represents House District 31 and can be reached at www.leg.state.or.us/witt/ or at 503-986-1431

On Wednesday, we received the latest update on the state's revenue forecast. It was better than we had hoped but still shows us losing an additional $35 million for a total of about $340 million for this biennium. According to the state economist, Mark McMullen, Oregon is experiencing broad-based growth across many private sector industries, although it is stubbornly slow and still very fragile. In addition, the loss of public sector jobs is still a drag on the recovery. Nevertheless, due to some very adroit maneuvering, there will be no further cuts to K-12 in the re-balance budget that we will vote on later this month. That is great news for our local school districts.

Furthermore, when we formulated the budget during the 2011 session for the 2011-2013 biennium, we knew that our ship of state had not quite turned around yet, so we held back 3.5% of all agency budgets, with the exception of K-12, as a contingency. Thankfully, the $340 million shortfall is almost exactly the amount of the holdback. Having said that, Human Services and Public Safety were left, often times, with programs operating at unacceptable levels.

We have heard from many constituents pleading with us to protect funding for essential programs for seniors, the disabled, and both in-home and long term nursing home care. I'm happy to tell you that we have been able to protect those programs. In addition, Employment Related Day Care (ERDC) and Temporary Aid to Needy Families (TANF) will continue at substantially their present levels of funding.

I'd also like to update you on the Senior Property Tax Deferral program, which was affected by the housing crisis and therefore threatened with insolvency. In order to fill a $19 million hole in this budget cycle, the 2011 Legislature passed HB 2453, which changed the parameters of the program in order to maintain its integrity. As a result, 1,664 participants were dropped from the program creating major angst within the low-to-moderate income senior community.

The House Committee on Revenue has been working with the Department of Revenue to find a solution to this unacceptable situation. Thankfully, they have, and key elements of the resolution are contained in HB 4039, outlined as follows:

• Delays by two years the reverse mortgage provisions of HB 2453

• Re-activates the 1,664 participants for the 2011-2012 property tax years

• Directs local tax collectors to issue refunds to those who have already paid their taxes

• Requires the Dept. of Revenue to collect information on program participants and report to the 2013 Legislature

• Requires financial institutions to notify individuals applying for a reverse mortgage that obtaining a reverse mortgage will make them ineligible for the property tax deferral program

On Thursday, HB 4039 passed the House on a unanimous vote.

Finally, the House passed two bills this week designed to support business and facilitate job growth. HB 4028 provides $29.6 million in lottery bond authority to create jobs by investing in air, marine, and rail freight infrastructure, as well as sewer and water projects and community college capital projects. HB 4150 expands the Credit Enhancement Fund to help businesses access capital. These bills should get construction workers on job sites right away and connect capital to growing businesses.

On Friday I was honored to be part of a panel sponsored by the Oregon Coalition to Stop Wage Theft. With me was Genice Rabe, Attorney for the Coalition, and John Molis, Chair of the OR Building Trades Council.