2013 legislative agenda

Building a sustainable Oregon economy that serves the common good

OregOn Business AssOciAtiOn

a Message FroM the PresidentFrom July until the end of October of 2012, our hardworking policy committee volunteers met with experts, commissioned studies and put in the time to develop a plan that can be summarized in five words: a few more tough votes. We present this agenda with great respect for the work that you, our elected leaders, do on behalf of Oregonians. We look forward to working together, with you and OBA partners, in the 2013 legislative session.

Our 2013 agenda is based on four pillars necessary for a strong state with a vibrant future: 1. Sound Budgeting and Resource Management (Cost Drivers)2. Grow the Economy (Jobs)3. Structure the Education System to Prioritize Student Achievement

(40-40-20 and University Autonomy)4. Balanced Voice (Effective, Bipartisan Policy Development & Court Funding)

Sincerely,

Ryan DeckertPresident, Oregon Business Association

Ryan DeckertPresident

ryan@oba-online.org

D.J. VogtLegislative Directordjv@oba-online.org

Joel FischerSenior Policy Analystjoel@oba-online.org

oBa staFF

Gina Williams, Public Affairs Director, gina@oba-online.orgPatti Winter, Director of Operations, patti@oba-online.org

Oregon Business Association6975 SW Sandburg Street, Suite 250, Tigard, OR 97223503-641-0990 oba@oba-online.org www.oba-online.org

With a focus on helping our state get its fiscal house in order for the benefit of all citizens, OBA is putting forth an ambitious, aggressive agenda for 2013 that addresses the top big-picture issues that impact the economy and our financial future.

The OReGOn STORyAs we enter the 78th Oregon State legislative session, it is important to reflect on several key points about the “state of our State.” Oregon is a state that continues to lag behind national averages when it comes to economic recovery. Several factors feed into this phenomenon, including high cost drivers (PERS, Prisons, Revenue Reform). Oregon also has a low per-capita income and fewer traded sector jobs (companies that buy and sell services outside of Oregon and tend to cluster in a region) than other states. In fact, since the late 1990s, Oregon wages and income relative to the U.S. average, has continued to decline as prison costs have soared and less money is available to fund education. By addressing cost drivers, spending smarter in the public sector, reducing revenue volatility, focusing on economic development and transportation projects to further stimulate jobs growth and income, we can make significant and lasting progress. Accomplishing these goals will result in increased education investments and higher per capita income through job growth, leading to a decrease in Medicaid and corrections spending and ultimately, reduced poverty.

oBa 2013 LegisLative agenda:setting the stage For oregon’s CoMeBaCk

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oBa PoLiCy CoMMitteesOur policy committees met from July-October with officials and experts in preparation for the 2013 legislative session. This effort is our vision at work – to “build a sustainable Oregon economy that serves the common good.” We thank our committee chairs and members for what amounts to hundreds of volunteer hours on behalf of OBA and the citizens of Oregon.

Business and FinanceChair: Robert Manicke, Stoel Rives

EducationInterim Chair: Kathy Swift, Capital Pacific Bank

Environment & Economic DevelopmentCo-Chairs: Bill Edmonds, NW Natural & Rick Glick, Davis Wright Tremaine

Health PolicyChair: Gayle Evans, Unitus Community Credit Union

Sound Budgeting & Resource Management Task ForceChair: Ruth Beyer, Stoel Rives

TransportationChair: Joan Snyder, Stoel Rives

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sound Budgeting and resourCe ManageMent & heaLth PoLiCy

Address Cost Drivers: Revenue Reform, Total Compensation & PERS Stabilization and Corrections Reform

OBA’s Strategic Imperative: Construct and effectively manage a strategic, sustainable, and stable state budget and public finance system. We will advocate for changes that lay the groundwork for revenue reform in 2014 by building the public’s confidence in Oregon’s fiscal system.

Comprehensive tax reform should be a priority in 2014. I. While our member companies work to analyze the financial impact of proposed tax or revenue changes this year, we will participate in the revenue reform discussions guided by the following framework:

•Consumption tax: Should not exceed a reasonable percentage; has parameters around it (i.e. constitutional limitations, sunset); has appropriate exceptions. •Decrease in capital gains rate: We will support reduction of the capital gains rate across the board. •Decrease in personal income tax rate: If a consumption tax is adopted, the personal income tax rate structure must be modified to minimize overlap of the income tax and the consumption tax at lower income levels and reduce the overall tax rate for taxpayers. •Kicker reform: All revenue generated from kicker reform should be used to build reserve funds. •Property tax & estate reform: We will evaluate proposals to reform Measures 5 and 50 and the Estate Tax.

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Isound Budgeting and resourCe M

anageMent & heaLth PoLiCy

Total Compensation & PERS Stabilization is necessary to bring II. employee labor costs in line with peer long-term market and revenue projections. Our policy priorities are as follows:

Use a market rate for annuitizing Money Match.•Reduce the earnings rate inside PERS accounts.• Fix the “tax fix” – stop paying the remaining tax gross-up for •retirees living in other states (legislation required).Re-examine benefit mix and value trade-offs.•

III. Corrections Reform

“ Oregon can revise its sentencing laws to continue our dramatic reductions in crime but do so at less cost…Although Oregon’s prison expansion has contributed to our drops in crime, we need to look at re-balancing our public safety system to emphasize cost-effective ways to reduce future criminal conduct.”

- Former Oregon Supreme Court Chief Justice Paul M. De Muniz

OBA’s Correction Reform Policy Priorities:•

Judicial Discretion » : Restore appropriate judicial discretion to sentencing. » Informed Decision Making in Sentencing: Promote cost-benefit analysis and risk assessment tools in crafting prison sentences. » Improved Sentencing Guidelines: Develop revisions to sentencing guidelines which incorporate the intent underlying the mandatory minimum sentencing initiatives, the principles of the 1989 sentencing guidelines, and the advances in the understanding of the causes of, and methods to, reduce recidivism. » Reduce Recidivism: Focus on the use of the most cost-effective and proven options, including education; community corrections; drug and alcohol treatment; education and job training; and visitation. » Eliminate the Need for New Prison Beds: No beds and no bonds in the biennium.

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heaLth PoLiCy agendaAs with addressing cost drivers, OBA’s health policy agenda involves cost reduction along with better service. Our focus areas for the 2013 session are as follows:

•Medical Liability Reform: We support an Early Discussion and Resolution program that balances stakeholder interests with the goal of reducing the cost and burden of medical liability. We believe this to be a first step toward comprehensive medical liability reform that should be followed by efforts to measure and assess impact over time. •Coordinated Care Organizations (CCOs): As a strong supporter of the legislation that created a new model of CCOs, OBA believes these models promise better outcomes at lower cost, but should be transparent and fiscally sustainable. We will continue to monitor and support these efforts. •Health Insurance Exchange (Cover Oregon): OBA members invested their support, expertise, and service to help create the Health Insurance Exchange, now known as “Cover Oregon.” As with the model of coordinated care, we expect Cover Oregon to deliver as intended, encouraging more people to obtain health insurance coverage.

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2000 2010 2020 2030 2040 2050 2060

12%

10%

8%

6%

4%

2%

0%

Oregon’s economic comeback requires the accomplishment of two main goals:

Achieve per capita income at the national average or higher.1. Consistently generate 25,000 jobs per year.2.

We must re-start the circle of prosperity:

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Oregon Per Captia Income

US average

Projection

Oregon Non-Farm Payroll Jobs2007-2012 (estimated), in thousands

1,750

1,700

1,650

1,600

1,550

1,500

105%

100%

95%

90%

85%

2007 2008 2009 2010 2011 2012

1990 1995 2000 2005 2010 2015 2020

a. Business & FinanCe PoLiCy

2013 Tax Credits: i. As the legislature reviews a number of credits in the 2013 session, OBA will focus on tax credits that directly impact business and have a well-defined purpose; include mechanisms to evaluate whether the purpose has been achieved; are not excessively burdensome on government or the participants; and promote economic development goals such as supporting traded-sector job growth.

Applying these principles, OBA supports extending •the Manufacturing Energy Tax Credit; Expanding the carryover period of the child care tax credit by an additional 5 years; and restoring the research and development tax credit from $1 million to $2 million.

Oregon Growth Board: ii. OBA supports the next step of creating a funding stream in order to make the Oregon Growth Board a permanent body. This funding will include support for investments across the capital continuum, including early state companies, venture capital and later-state growth investments.

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grow the eConoMy

IIgrow

the eConoMy

B. environMent & eConoMiC deveLoPMent Long-Term Energy Plan:i. OBA believes a ten year energy plan is a critical component in fostering economic development and wage growth. We will stay at the table with elected officials and other stakeholders to hammer out details of the plan to ensure a vibrant energy future for the state. Energy Efficiency:ii. OBA supports the Governor’s goal of increasing energy efficiency in ways that strengthen our economy, are economically efficient and make additional capital available for the Oregon economy. Legislation is necessary to build on and refine our system that is already effectively delivering energy efficiency. Innovative Water Solutions:iii. OBA supports in concept innovative solutions to address increasing competition for scarce water resources that balance the needs of irrigated agriculture, municipal and industrial demand and sustainable fisheries, among other values. One such approach we support involves winter time withdrawals of Columbia River Water. OBA will stay at the table to balance growth of Oregon’s economy, while protecting the state’s natural resources. Streamline Permitting:iv. OBA supports the Regulatory Streamlining and Simplification Project (Roadmap) as a key element in creating a plan for changing how government agencies and new and existing businesses work together for a more vibrant economic future for Oregon.

C. transPortationFor the 2013 legislative session, OBA supports investing in the transportation projects necessary to increase Oregon’s economic competitiveness in the global market.

Fund I-5 Bridge Replacementi. : The 2013 Oregon Legislature should commit to funding its share of the I-5 Bridge Replacement project to secure the federal government’s project investments in anticipation of a 2013-2014 construction start date. It is imperative that Oregon commit to this funding in 2013 before the window of opportunity to leverage federal funding closes.

Fund Connect V:ii. The 2013 Oregon Legislature should pass Connect Oregon V, funded with an additional $100 million investment in lottery-backed bonds.

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“ He who opens a school door, closes a prison.”

- Victor hugo

I. Move towards 40-40-20 goal: OBA supports moving Oregon toward the 40-40-20 goal through pursuit of a fundamental redesign of the education system. In order to achieve this, funding models must be redesigned to encourage innovation and improved outcomes, including an overhaul of funding for post-secondary education to ensure degree attainment consistent with our 40-40-20 goals.

OBA also supports the establishment of the STEM •Investment Council and the appropriation of $50 million from the general fund for the 2013-2015 biennium to support the council’s activities, including STEM goals for proficiency and post-secondary graduates. In addition, OBA agrees with and will participate in monitoring oversight of the STEM Investment Council to ensure goals are met and progress is being made in accordance with established timeframes.

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struCture the eduCation systeM to Prioritize student aChieveMent

IIIstruCture the eduCation systeM

to Prioritize student aChieveMent

II. University Autonomy: OBA supports the direction of establishing institutional governing boards for Oregon public institutions. We believe that policies for University Governance should: align and integrate the system and increase the efficiency and effectiveness of the statewide governance structure; support providing institutional boards to universities that want one; grant institutional boards the statutory authority to hire/fire the President; authorize boards to issue bonds; authorize boards to set tuition within set limits; provide broad governing authorities in statute; require boards to enter into achievement compacts to increase accountability; and continue to require coordination with other universities, community colleges and school districts.

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BaLanCed voiCe

“ If we do not maintain justice, justice will not maintain us.”

-Francis Bacon

Judicial Branch Funding: OBA believes a vital court system is essential to a well-functioning economy. We will work to ensure the judicial branch is adequately funded and able to hear cases five days a week with appropriate staffing to meet its growing caseloads.

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IVBaLanCed voiCe

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nIK BLOSSeR, Board ChairPresident, Celilo Group Media

GARy W. ReynOLDS, Board Vice-ChairPresident, Perkins & Company, P.C.

eRIK AMOSDirector, Corporate Tax DivisionColumbia Sportswear

MORGAn AnDeRSOnnorthwest Region Government Affairs ManagerInTeL

GARy BAUeRDirector of Government and Community Affairs, nW natural

Len BeRGSTeInPresident, northwest Strategies

RUTh BeyeRMember, Stoel Rives LLP

SCOTT BOLTOnVice President of Government AffairsPacific Power

JULIA BRIM-eDWARDSImmediate Past Board ChairDirector, Government & Public AffairsWestern States and Canada, nike

RICh BROWn Senior Vice President-Market DevelopmentBank of America

MATT ChAPMAnPresident & executive Directornorthwest evaluation Assoc. (nWeA)

BARBARA ChRISTenSenChief Sales & Marketing OfficerProvidence health & Services

AnDReW COLASPresident & COOColas Construction

JUSTIn DeLAneyVice President, Corporate Legal & Public AffairsThe Standard

BRIAn GARDPresident, Gard Communications

ADAM GRzyBICKI President, Oregon/Alaska/hawaiiAT&T

ALAn hICKenBOTTOMGeneral Manager, Tanner Creek Division, Christenson electric

CheRyLe KenneDyTribal ChairwomanThe Confederated Tribes of Grand Ronde

PeTeR KRATzexecutive Vice President, Operationsharry & David

BeRnIe KROnBeRGeRVice President-Oregon Regional Manager Foundation-Charitable Contributions/Government Relations Social Responsibility Group, Wells Fargo

MARK A. LOnGManaging PartnerSchwabe Williamson & Wyatt, P.C.

hIROShI MORIhARAPresident, hM3 energy, Inc.

MARTy MyeRSGeneral Manager Threemile Canyon Farms, LLC

MIKe RADWAySenior Director of Government RelationsKnowledge Universe

DAVe ROBeRTSOnVice President, Public Policy, PGe

ALySA ROSePresident and CeO, Rejuvenation

JOhn W. RUSSeLLPresident, Russell Development Company

LISA SeDLARPresident and CeOnew Seasons Market

COnnIe SeeLey Chief of Staff, Office of the President, OhSU

JAReD ShORTPresident, Regence BlueCross BlueShield of Oregon

PAT SMIThPresident/CeOUnitus Community Credit Union

BILL SMIThPresident, William Smith Properties, Inc.

JennIFeR SPALLDirector of Public Affairs & Government RelationsWAL-MART STOReS, InC.

ChRISTIAn VenDeRByChief Operating Officer, Vestas

DOn WAShBURnPrivate Investor

SeAn WATeRSDirector of Compliance and Regulatory AffairsDaimler Trucks north America

Ken WIGhTMAn Chief executive OfficerDavid evans enterprises, Inc.

RyAn DeCKeRTPresidentOregon Business Association

oBa Board oF direCtors

aBout oBa

Oregon Business Association is the state’s most effective advocate for the long-term enhancement of Oregon’s business climate.

Formed by a group of Oregon business leaders, OBA provides bipartisan, statewide business leadership that strives to ensure Oregon’s continued economic competitiveness. Today, more than 300 businesses, from Portland to Boardman, from homegrown to Fortune 500, have joined to support OBA’s commitment to a healthy economy for all Oregonians.

Photo Credits: Port of Portland, Travel Oregon, Gina Williams, Andrea Wright

Oregon Business Association6975 SW Sandburg Street, Suite 250, Tigard, OR 97223503-641-0990 oba@oba-online.org www.oba-online.org