A bit of sun in Salem

One would think that building a rainy day fund for the State of Oregon – Oregon, of all places, where the rain famously falls and state budgets fall when the economy darkens like our skies in late November – one would think that conservatives would demand that something be put away for the inevitable storm.

But the weather in Salem last week wasn’t that bad. Outside the capitol building, Rhododendrons were in bloom, buds like turgid minarets exploding into variegated blossoms of pink and purple.

Inside the marbled walls, it was not so floral.

The proposal to take the corporate kicker and start a rainy day fund was defeated early. It was a simple vote along party lines. There are 31 Democrats, 29 Republicans. The vote needed to pass by a two-thirds margin in the house, 40 to 20.

So Senate President Peter Courtney came down, and with his “experience and wisdom,” put a deal together. Double the estate tax exemption to $2 million. Raise the corporate minimum tax. Let the Legislature budget in a one percent contribution each year.

Except, the impact of the corporate minimum tax increase, proposed by Republicans, had not been properly thought out. Some small businesses or developers with multiple LLCs would get hammered. Phones began to ring, e-mails flooded in.

The deal fell apart.

Then something strange happened. Wayne Scott, House Minority Leader (watch out, we are going to say something nice about him after we blamed him for much of the mess earlier) worked with Jeff Merkley, Speaker of the House, and Dave Hunt, leader of the House Democrats, and they said... “Hey... we have to do something about this huge corporate kicker (85 percent of the kicker, about $275 million) going out of state...”

The House voted on a simple plan. Let small Oregon businesses keep the kicker. Put the rest in the rainy day fund. And it passed with all 31 Democrats and 17 Republicans voting in favor. After years of partisan paralysis, it looked like government was going to creak into motion and do the right thing.

Not quite.

There’s a deadline out there. If the legislature did not act, the Democrats intended to refer the issue to voters. But the deadline for filing is next Thursday, March 15. And the Senate needed to “read” the bill three times, with a session day in between each reading. While most of the Senators were waiting for the bill to come out of the House on Thursday, when it did....

... Senate Republicans were missing.

There were 18 Democrats and one independent. They needed 20 out of the 30 Senators for a quorum. Without a vote, the bill would not be read in time for to make the deadline.

The governor has a little known power. During a session, he can authorize the Oregon State Police to go get legislators who are “missing.” And it so happened that two Republican Senators were in Corvallis, at an Oregon State Beaver baseball game.

A phone call went out to Senator Ted Ferrioli, leader of the Senate Republicans. Reportedly, the conversation went something like this: “You will show up on the floor of the Senate so we have a quorum, or we will be bringing your guys back here in a police car.”

Ferrioli must have decided it would not be a good thing for Republican Senators to be hauled into the chamber by the Oregon State Police so they could vote on whether Oregon could build a rainy day fund with $275 million that would otherwise have gone to corporations out of state.

Ferrioli showed up. They had the first reading of the bill. They will have another on Monday, unless more games are played.

And with any luck at all, Oregon will begin to build a rainy day fund of about 10 percent of the state budget. They will eventually need $1.4 billion for a biennium (Oregon budgets for two years at a time, the legislature meets every two years), about $700 million per year.

It is not as good a deal as the one put together by Senator Courtney, which loosened the estate tax and fixed a seriously outdated corporate minimum tax, and would have had the Legislature put in about $140 million for each two-year budget.

But it’s a start.