News

 

The PSU office of government relations prepares an update of legislative activity weekly during the 2005 Legislative Session. It is adapted from the newsletter prepared by the OUS government relations staff. Jennifer Williamson, Government Relations Associate, is the editor for this update. If you have questions about the content of the update, please contact her at 503-725-3537 or jwill@pdx.edu or Debbie Murdock at 503-725-5040 or murdockd@pdx.edu.

GOOD REVENUE NEWS, SEPARATE HOUSE AND SENATE COMMITTEES, SCHOOL FUNDING, AND FINANCIAL AID FOR STUDENTS DEFINE BUDGET WORK THIS PAST WEEK

Friday the 13th Proves Good For Oregon’s Future.

The news the Legislature, lobbyists, and state policy leaders have been waiting for – the May economic forecast – was released on Friday and the news is good. State revenues are up for this year and revenues are projected to be up for the 2005-07 biennium. That means there are revenues sufficient to meet the final budget limit of $12.393 billion agreed upon by the House and Senate leadership. Tom Potiowsky, State Economist (and Professor of Economics at PSU) and Michael Kennedy, Senior Economist, OEA, were greeted by House and Senate Revenue Committee members with relief and even lighthearted joking (an attitude that hasn’t been seen at other meetings where the forecast was released). They covered economic indicators such as job growth, manufacturing, personal and corporate income tax payments. Potiowsky reported a 2.9 percent employment growth increase, gaining about 12,000 jobs. The down side to that news is that Oregon needs an additional 18,000 jobs to erase the downturn that began in 2001.

The OEA projects general fund revenue for the current biennium (2003-05) to equal $10.4 billion, an increase of $105.6 million above the March 2005 forecast. The increase is due primarily to an increase in personal income taxes. Total resources for the 2003-05 biennium, including $113.5 million in funds carried over from 2001-03, are $281.2 million short of the 2003 Close of Session (COS) forecast, leaving a projected ending balance for 2003-05 of $292.6 million. The House Republicans have vowed to maintain ending balance in reserves to cushion the state for any future economic downturns.

For the 2005-07 biennium, the OEA projects General Fund revenues to total $11.3 billion, an increase of $118.4 million from the March 2005 forecast. Carrying over the $292.6 million from the 2003-05 biennium, total resources available amount to $11.6 billion, $224 million above the March 2005 forecast.

Lottery earnings for the 2005-07 biennium are expected to equal $931.2 million, a 19.3 percent increase from 2003-05.

The projected lottery earnings together with the increase in General Fund resources, brings available total resources to $12.431 billion, netting approximately $218 million to cover funding for essential state programs.

It is important to note that the 2005 COS forecast (usually released in September) will represent the "ceiling" for general spending for 2005-07. That ceiling could be negatively affected by various factors, including legislative action to change tax laws during the current session.

Highlights of Friday’s report showed that personal income growth in 2004 was greater than previously thought while corporate income growth was more moderate with few indicators for change. While the revenues will not be enough to initiate the "kicker" for individuals, corporate income tax collections are up $62.6 million, well above the 2 percent threshold required to trigger the kicker rebate. The OEA reports that about 80 percent of the corporate kicker does not stay in Oregon; instead, it is attributed to out-of-state companies based in Oregon and can be used as a credit against future tax liabilities.

Non-income tax revenues, including cigarette tax, liquor apportionment and interest earnings exhibit the largest forecast revisions, all in excess of $3.0 million.

The May forecast is typically the last piece of information needed by Legislative budgeters to finalize the state agency budgets. However, with the action taken last week to separate the Ways and Means Committee into a Senate and House Budget Committee, it seems unlikely that the two chambers will reconcile differences and reconvene a Joint Ways and Means Committee to hammer out a budget that will be supported by Democrats and Republicans.

Responding to the forecast, Governor Kulongoski said, “Our focus now must be on staying the course of making strategic investments in our economy and education so that we can build today the foundation for growth that is sustainable tomorrow. That means making sure our students have access to a quality and affordable education from pre-k through post-secondary and workforce development; creating a transportation infrastructure that can carry goods, people and commerce anywhere in the state; fighting – and winning – the methamphetamine epidemic that is plaguing our children and our communities; and continuing to make smart decisions today that will yield the greatest return for tomorrow.”

For more information on the March 2005 Revenue Forecast, go to http://www..das.state.or.us/DAS/OEA/index.shtml.

House and Senate Budget Committees Begin Separate Work on Agency Budgets.

Work on finalizing agency budgets began by both the House and Senate Committees formed when the Ways and Means Committee was split earlier in the month. This past week, the Senate Committee approved the K-12 school funding bill, setting it at $5.325 million, as well as budgets for smaller state agencies, including the Public Employee Retirement System, the Board of Dentistry, Department of Aviation, and the Board of Chiropractic Examiners. The House Budget Committee, which includes subcommittees met last week as well. The House Budget Education and Natural Resources Subcommittee met for an overview of all of the education sector budgets – K-postsecondary education.

This next week, the House Ways and Means Committee will meet to refer all bills that have been sent to it on to either the House or Senate Budget Committees. That includes the OHSU-PSU merger bill and the bill to continue the Dispute Resolution Programs at PSU and at OHSU.

Senate Approves K-12 Spending Bill.

The first budget bill considered by either the House or the Senate – the bill that would spend $5.325 billion on K-12 – passed the Senate on Friday by a vote of 17-12 (with Sen. Bruce Starr, R-Hillsboro excused). The vote split along party lines with the exception of Sen. Floyd Prozanski (D-Eugene) who voted with the Republicans (news reports indicate he wanted to hold out for a $5.4 billion budget for schools). That bill now goes to the House, where leadership there is committed to a $5.2 billion budget for schools.

State Financial Aid Package Last Budget Addressed by Ways and Means Committee. Before adjourning, the Education Subcommittee of the Joint Ways and Means Committee completed Phase II of the budget process for the State’s Student Assistance Commission, the agency that provides financial aid to low-and moderate-income students. Members of the public provided testimony to the Subcommittee, including PSU student body president-elect Erin Devany. Devany spoke about the need to invest in students and provide access to higher education through financial aid and low public college and university tuition. The Oregon Student Association coordinated the testimony of students from public universities. Student parents, students who are responsible for paying for their college, and students who come from families without resources to send their children to college all spoke about the need for greater investment in financial aid. Others testified about the importance of providing access for Oregonians to private colleges and universities. Parents also testified about the work that the Commission does to help high school students prepare for college and make decisions about financing their education through its ASPIRE program. Following the day of public testimony, the Subcommittee heard from the Executive Director Margie Lowe and Commission Chair Brian Clem about the work the Commission has done in recent months to close down its loan guarantee functions, and improve efficiency. Additionally, Tim Nesbitt, OUS Board member testified about the work of the Access and Affordability Committee and its work to devise a financial aid system that supports student access at community colleges, the Oregon University System, and in private colleges.

 

SENATE COMMITTEE HONORS JIM PEPPER AND RECOGNIZES PSU’S LEROY VINNEGAR JAZZ INSTITUTE

Robert Sylvester, dean of the School of Fine and Performing Arts testified before the Senate Rules Committee on Tuesday about Northwest jazz great Jim Pepper. SJR 31, introduced by Senator Avel Gordly (D-Portland), honors the musical legacy of Oregon jazz artist and composer Jim Pepper and directs that a copy of the resolution be delivered to the Oregon Historical Society, the National Museum of the American Indian and the Leroy Vinnegar Jazz Institute for inclusion in its permanent collections. The resolution also encourages the creation and endowment of Jim Pepper Chair at Portland State University. Sylvester told the Committee about the Jazz Institute at PSU led by Professor Darrell Grant, who is working to preserve the traditions of early Northwest Jazz greats and prepare jazz musicians to continue the legacies of Leroy Vinnegar, Jim Pepper, and others. Sylvester recognized the work of Jim Pepper and his leadership in the Native American community and his unique ability to bridge jazz and Native American traditions. The bill now goes to the Senate for a vote. Floy Pepper (his mother and former teacher in the PSU Graduate School of Social Work) and Suzie Pepper Henry (BS '78 Elem Ed, MS Educ '80), Jim Pepper’s sister also attended the hearing.

 

AGREEMENT REACHED TO ALLOW OUS OUTSIDE LEGAL COUNSEL- AND PARITY FOR PSU

An agreement was reached between the OUS and the Department of Justice that would allow the OUS Chancellor’s Office and the universities to retain attorneys outside of the Department of Justice to act as in-house counsel. This agreement was a result of negotiations surrounding SB 220, a bill introduced early in the session by the Oregon University System. Senator Burdick, Chair of the Senate Judiciary Committee, was a strong advocate for PSU to have parity with the UO and OSU and urged both the Attorney General and OUS to reach an agreement, making the legislation unnecessary. Currently, both UO and OSU have State Assistant Attorneys General (SAAGS) who are hired by the presidents on campus to provide day-to-day legal advice. PSU, however, has had no in-house counsel and has obtained legal advice from State Assistant Attorneys General (SAAGs) who were assigned on a part-time basis to PSU. Attorney General Myers has agreed to changes that would to allow PSU to have two SAAGs, and allow OSU and UO each to have an additional SAAG. PSU President Dan Bernstine is now developing the plan for hiring the PSU SAAGs.

 

NEW HIGHER EDUCATION FINANCIAL AID FUND PROPOSED

A bill that would create a program to generate additional financial aid for students attending OUS institutions was introduced last week. Sponsored by the Committee on Rules at the request of Governor Kulongoski, SB 1061 would allow the State Forester to acquire property for the establishment of “working forests”. This bill directs the State Forester to manage these forests for long-term revenue generation to fund the Working Forests Higher Education Fund which will support students attending OUS institutions. This bill also establishes the Working Forests Revenue Fund, the Working Forest Bond Fund, and the Working Forests Revenue Bond Administrative Fund to generate revenue to be used by the State Forester and the Oregon Department of Administrative Services. This bill was referred to Senate Environment and Land Use Committee and then to the Revenue Committee but a hearing has not been scheduled.

 

UPCOMING EVENTS

Senator Richard Devlin (D-Tualatin) and State Schools Superintendent Susan Castillo will hold a town hall meeting in Portland on Tuesday, May 17 at 6:00 pm at Jackson Middle School, 10625 SW 35th Avenue.

Representative Steve March (D-NE Portland), Representative Jackie Dingfelder (D-Portland), and Senator Avel Gordly (D-Portland) will hold a town hall meeting focusing on health care issues in Portland on Saturday, May 21 at 10:00 am at Warner Pacific College, McGuire Auditorium, 2219 SE 68th Street. Contact (503) 986-1446 for more information.

Representative Mitch Greenlick (D- NW Portland) has scheduled two upcoming town hall meetings. The first is scheduled for June 8 at 7 pm at the Zimmerman Community Center, 816 NW Hoyt (across from the main post office), and the second on June 14 at 6:45 pm at the Cedar Mill Library, 12505 NW. Cornell Rd at NW Saltzman.

 

AROUND THE CAPITOL

On Monday, May 9, thirty five future school administrators spent the afternoon in the capitol learning about the legislative process, meeting with lawmakers, and attending committee hearings in an effort to better understand how the Legislature makes decisions about school funding and programs. These students, from Professor Dan Johnson’s Leadership 2000 + Program, are part of an innovative, one year PSU program for prospective Oregon school administrators. Leadership 2000 is offered in the Portland, Beaverton, Clackamas, Salem, Oregon Coast, and Southern Oregon areas leading to the initial administrator license.

 

FUN FACT:

Question: What PSU program is represented more times in proposed state laws than any other PSU program?

Answer: The PSU Center for Population Research and Census.

LEGISLATIVE SCHEDULE

You may obtain a copy of the Legislative Schedule listing upcoming hearings and activities of the various committees on the world wide web at: http://www.leg.state.or.us/05reg/pubs/commsch.pdf