Short Session Off to the Races with Big Agendas
Legislators vow to focus on housing, homelessness as Measure 110 looms large
The Oregon short session may have originally been created with the intention of allowing for mid-biennium budget fixes, but in current practice they’re loaded with bills of all kinds; holdovers from the previous session, new legislative concepts, and spending packages based on new revenue projections.
With 300 bills to work and five weeks to do the work, the short session is a frenzy of activity where legislators are warned that evenings are considered working hours. The first work session posting deadline is today, and any bill that isn’t heard by Feb. 19 is dead. The next deadlines come in quick succession the following weeks and the entire session will wrap no later than March 10.
All of this takes place on the eve of a significant primary election in which four Republican senators — Majority Leader Tim Knopp (R-Bend), Brian Boquist (R-Dallas), Dennis Linthicum (R-Klamath Falls) and Art Robinson (R-Cave Junction) — won’t be allowed to run for their current seats based on the Supreme Court upholding the Secretary of State’s reading of Measure 113. Four others won’t be allowed to run when their term is up in 2026 and two more are retiring at the end of the year.
Because of this ruling, Republicans already facing the end of their current tenure in the Senate may be less than eager to show up to vote on proposals they object to. With no time to spare, this will force legislative leaders to quickly identify the path forward on bipartisan legislation.
Both parties have agreed that housing and homelessness remain the top priority, and action in the opening week has set bills in motion to increase the housing supply and support homeless shelters.
Measure 110 has become the lightning rod of the session, with a four-hour hearing on Feb. 7 to take public comment on how to fix the drug addiction ballot measure that has fallen deeply out of favor in the public’s eye. Balancing the severity of punishment appears to be a sticking point, and if the legislature fails to act there will likely be a repeal going to voters in November.
Everything that happens in the Capitol is connected, and the tenor of these discussions will have an outsized impact on the session as a whole.
Forecast Shows Growth in Corporate Revenue
The Economic Revenue Forecast published in the first week of the short session was stable heading into tax filing season, with little change since the December 2023 forecast. Revenue is tracking as expected, and there is bipartisan agreement that any additional revenue should be funneled toward spurring housing and addressing addiction.
From a national perspective, inflation is near the Federal Reserve’s target and the labor market is still tight. The population estimates certified by Portland State University in December indicate that population growth has stalled at about 0.6-0.7%, primarily due to migration out of the state. One highlight is the expected investment this year from the CHIPS Act and Inflation Reduction Act.
The General Fund revenue forecast looks much the same as in December, with a weaker outlook for labor-related tax collections offset by strong performance of the stock market and other investments in 2023. Overall, expected general fund revenues increased by $76 million since the previous forecast due largely to corporate tax collections. Corporate income and excise taxes also nearly tripled over the past five years and the number of corporate filers has been on the rise in recent years.
Since the close of the 2023 Legislative Session, personal tax revenue is up $160.4 million (0.8%), corporate tax revenue is up 533.1 million (23.9%), General Fund gross revenue is up $635.3 million (2.5%) and net General Fund and lottery resources are up $1.229 billion (2.6%). The estimated ending fund balance for the current biennium is expected at $1.65 billion.
Corporate tax revenue of $533.1 million is projected to be dedicated to K-12 education spending in the next biennium. Current reserves are estimated at $2.1 billion and expected to grow to $2.86 billion by the end of the biennium.