Oregon 2016 Senate Session
Adjourns ending the most
destructive month in Oregon legislative history
3/9/16 Newsletter by Oregon
State Senator Doug Whitsett, Senate District 28
The Oregon Legislative Assembly adjourned last Thursday
afternoon, ending what was arguably the most destructive month
in Oregon legislative history. Some of the most damaging new
laws were supposedly aimed at compromising with the provisions
of even more destructive initiative petitions.
Public employee unions, environmental advocacy organizations and
purveyors of renewable energy represent much of the core of the
political support for Oregon majority Democrats. Political
divisions, for those support groups, have been actively engaged
in signature gathering for several of those initiative
The organizations are employing a great deal of effort, expense
and publicity to ensure their success. Some of those initiative
petitions seem likely to appear on the November ballot.
In “response” to the “impending threat” of these initiative
petitions, majority Democrats introduced several bills that they
claim were aimed at finding common ground to compromise and
defuse the threat of the ballot measures. They passed the bills
on party-line votes in order to “save the people” from the even
more destructive ballot measures.
Senate Bill 1574 was supposedly enacted in order to save us all
from the ravages of Initiative Petition 63. In my opinion, the
provisions of the new law are significantly worse than the
potential ballot measure.
The new law doubles the renewable portfolio standard by
eliminating the use of all coal-generated electricity in Oregon.
Both Legislative Counsel and the Public Utility Commission (PUC)
are on record stating it will not cause the closure of a single
coal fired power plant anywhere, and will not measurably reduce
global greenhouse gas emissions.
The act contains two provisions that functionally prohibit the
formation of a municipal utility district (MUD) or public
utility district (PUD) in PacifiCorp’s monopoly protected
service area. These poison pills serve to eliminate the
financial feasibility for any Klamath County MUD or PUD.
Incredibly, no one has performed a meaningful, in-depth cost
analysis for this scheme. The utilities admit the new law will
cause at least an average one and one half percent annual rate
increase. At minimum, it will result in at a 40 percent increase
in power costs to all PacifiCorp customers.
That enormous rate hike will be above and beyond the usual
PacifiCorp rate increases allowed by the PUC. PacifiCorp power
rates have already nearly doubled since 2005.
The new law was heavily supported and relentlessly lobbied by
PacifiCorp and PGE operatives. In fact, it is generally
understood that many of the provisions of the bill were largely
drafted by the utility companies.
In my opinion, this bill represents crony corporatism at its
worst. One and a half million Oregon PacifiCorp and PGE
customers, who had no representation in the closed door and
confidential negotiations, will be forced to pay the enormous
costs while the companies reap immense new profits that are
guaranteed under the new law.
SB 1532 was also enacted by the Democrat majority, supposedly to
save us from the effects of minimum wage initiatives 57, 58 and
59. The bill has already been signed into law by Governor Kate
This new law creates three regional minimum wage rates. The new
mandated minimum wage will sequentially increase, at different
rates, in each region. Compliance with the law, as well as with
the plethora of administrative rules it will require, will be
nearly as difficult as finding the money to pay the increased
In my opinion, this new law will result in wholesale destruction
of Oregon small businesses and kill many private sector jobs
that those businesses provide. Klamath and Lake Counties have
some of the highest percentages of minimum wage jobs in Oregon.
For that reason, the new law is expected to hit rural southern
Oregon among the hardest.
Thousands of Oregon community college and university students
help pay their college costs by working at university and
college provided minimum wage jobs. Much of that student
employment is now at significant risk, because no funding is
made available for the tens of millions of dollar increase in
labor costs directly caused by the new law.
SB 5701 increases Oregon’s current spending by more than $300
million. The preponderance of the increase is due to “collective
bargained” increases in public employee pay. Most of the rest of
the $300 million will be spent for projects that too often look
like ornaments on an election year Christmas tree.
According to the Department of Administrative Services, the
average state employee earned more than $89,000 in 2015. The
median compensation earned by state employees was more than
Last year’s labor contract will increase public employee
compensation by at least another 30 percent over the next three
and one half years. The new contracts will serve to increase
state employee compensation by more than half a billion dollars
for the budget period starting July 1, 2017.
Finally, Initiative Petition 28 would levy a two and one half
percent tax on Oregon corporations that have more than $25
million in Oregon gross sales. That includes most grocers,
convenience stores, clothing retailers, fuel distributors, auto
sales and utilities such as PacifiCorp.
Virtually all affected Oregon corporations will pass their
increased cost on to their customers and ratepayers. The new
levy will function as a two and one half percent sales tax on
most services and commodities purchased in Oregon. It is
expected to raise at least $2.6 billion in new taxes each year.
Some Democrat legislative leaders have called for a special
legislative session to enact a compromise law to save the people
from part of the enormous tax increase. One proposal would only
raise taxes by about a half billion dollars each year.
Governor Brown seems to believe state government must continue
to tax and spend. She appears to be in strong support of the
enactment of the new tax by the people.
Perhaps our Governor is aware of the several billion dollar
budget shortfalls that yawn, like a fiscal abyss, for the 2017
budgets. The Public Employee Retirement System, Oregon Health
Authority, Department of Human Services and Department of
Transportation each have impending budget deficits in the
hundreds of millions of dollars.
The majority party has summarily vetoed any and all efforts to
reduce government spending. Raising taxes continues to be their
only viable response to the enormous impending budget deficits.
Senate Republicans were able to delay, and thereby prevent
passage, of a number of other really bad bills during the short
session. Unfortunately, we no longer had enough bipartisan
coalition votes to stem the tide of bad legislation, when the
majority Democrats were united in their purpose.
The question that begs an answer: “At what point in time do
astute businessmen start to develop their strategies for leaving
Please remember--if we do not stand up for rural Oregon, no one
Senate District 28
Email: Sen.DougWhitsett@state.or.us I Phone: 503-986-1728
Address: 900 Court St NE, S-311, Salem, OR 97301 Website:
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