Analyst: Tax, public pension changes still on the legislative table
An Oregon political analyst says lawmakers left two big issues on the table when they adjourned July 7 — overhauls of the state tax and public-pension systems — and he sees no path open to resolve either.
"They need to begin putting together ideas that are politically possible now" if anything is to emerge from the short 2018 session starting in February, said Jim Moore, who teaches politics and government at Pacific University.
He made his observations Monday (Sept. 11) at the Washington County Public Affairs Forum in Beaverton.
State services and public schools rely mainly on state income taxes — which fluctuate with Oregon's boom-and-bust economy — and local governments on property taxes that Oregon voters limited in the 1990s.
Voters have rejected a retail sales tax nine times between 1933 and 1993 — the most lopsided defeat was by 9 to 1 in 1969 — and they rejected a gross receipts tax on business by a 60-40 majority in the form of Measure 97 in 2016.
Still, majority Democrats put forth variations on the ballot initiative, which public-employee unions backed. But all the proposals failed to advance beyond committee hearings in 2017. Business groups were lukewarm or opposed, and so were Republicans, who would have had to supply one vote in each chamber for the 60 percent majorities required to pass a tax plan.
"If we do a gross receipts tax, but it will be a lower tax so you will like it, how are you going to sell that? They couldn't even sell it to the Legislature, so it did not go anywhere," Moore said.
"Clearly, tax reform is something that people are looking at seriously. But coming up with a consensus is tough because people want different things out of tax reform."
Moore said the most likely scenario for success is for an informal coalition of interest groups to assemble a proposal that lawmakers then could pass on their own or refer to voters.
Moore is currently writing a biography of Vic Atiyeh, who as governor proposed a net receipts tax in 1983 and a retail sales tax in 1985. Lawmakers let the first die, and though they put a sales tax on the ballot, voters rejected it in 1985.
In the case of public pensions — the system has an unfunded actuarial liability pegged at $24 billion over several decades — Moore said there also is a lack of political consensus.
"We still do not have that coming together of minds about what public-pension reform would look like and who really ought to be at the table," he said.
"Many people use that figure ($24 billion) as a cudgel to say we have to fix this problem now.
"Things need to happen. But it's an amazing political process to watch it not line up."
Unlike tax reform, Moore said, the Oregon Supreme Court — not voters — has been the hurdle to sweeping changes in the Public Employees Retirement System.
The court upheld some of the changes approved by the 2003 Legislature, notably a shift to a plan blending defined benefits and defined contributions for public employees after August 2003. Under a defined-contribution plan, employees assume more of the risk of investing retirement savings.
But the court rejected other changes as constitutional violations of contracts between employers and employees.
A decade later in 2013, lawmakers pared future cost-of-living payments for public retirees in an attempt to offset liabilities that grew after the economic downturn in 2008. But the court ruled in 2015 that such reductions could not be made retroactive.
Asked during a question-and-answer session about the future of Donald Trump's young presidency, Moore said he expects impeachment efforts to remove him will go nowhere in Congress unless things change dramatically.
Unlike 1974, when Richard Nixon resigned the presidency before the House could vote impeachment, Moore said Republicans control both houses of Congress this time around.
In 1974, during the Watergate scandal and coverup, a number of Republicans joined majority Democrats on the House Judiciary Committee to support impeachment.
"There was evidence, there was testimony from people in the White House about criminal activity, and there was strong pressure from constituents," Moore said.
"Congress can impeach for whatever reasons it wants. But impeaching based on a snit borders on a coup."
Moore said it is more likely that Trump would resign early if he feels bored of frustrated — or would renounce a second-term bid, although Trump already has a re-election committee for 2020.
A Republican majority in the House impeached Democrat Bill Clinton in 1998, but the Senate fell far short of the two-thirds majorities required to remove Clinton from the presidency.
The Constitution provides for the vice president to fill a presidential vacancy, and does not authorize a special election.
"Think long and hard about what a President (Mike) Pence would be if you have problems with Donald Trump," Moore said. "It's not as if Hillary Clinton can come in and take over."