January 2, 2009 Volume 110 Number 1

Labor maps out goals for 2009 Legislature

By DON McINTOSH Associate Editor

Oregon lawmakers face a daunting challenge when the 2009 legislative session begins Jan. 12.

Because the state budget depends heavily on personal and corporate income taxes, job losses and business failures are taking a bite. The state general fund budget of about $7 billion a year could take a hit of $340 million. That will make it harder for government to deliver education, criminal justice and social services.

Gov. Ted Kulongoski and state legislators will be looking for new sources of revenue and making budget cuts, all while trying to reboot the economy.

Union leaders will be in Salem for those debates. They’ll be testifying when the Legislature discusses health care reform and measures to combat global warming. And they’ll be calling on the expanded Democratic majority to deliver on a pro-labor agenda.

Unlike the federal government, which can borrow to fund spending, states mostly have to pay as they go. A sales tax, regressive and unpopular, is almost certainly off the table this year, but lawmakers are expecting to consider raising tobacco, alcohol, and gas taxes. And they may look at higher taxes on the well-off and on businesses, two groups that have seen their overall tax burden shrink in recent years. One proposal would create a new top bracket on Oregonians earning more than $250,000 a year. Another would raise Oregon’s corporate minimum income tax, which is currently $10 a year and hasn’t been increased since 1929.

“The budget is going to be the backdrop against which everything is played out this session,” said State Sen. Diane Rosenbaum, a longtime union activist and state legislator. “But it also gives us the opportunity to make significant changes.”

Gov. Kulongoski is proposing to raise the corporate minimum to $25 for the smallest companies, an amount which would rise to $5,000 a year for companies that have annual sales of over $25 million. That would raise about $42 million a year, which he wants to use to increase need-based scholarships for students at Oregon universities and community colleges.

Kulongoski also wants a 2-cent increase in the gas tax, and increased registration and title fees — enough to raise $500 million a year, which he proposes to use to modernize Oregon’s transportation system, thereby creating 6,700 jobs. Most if not all of the public works projects are subject to state prevailing wage requirements.

Lawmakers may also decide to end the practice — which exists in no other state — of mailing refunds to taxpayers when revenues exceed projections. Instead, the so-called “kicker” would go toward a rainy-day fund to fund schools and other priorities in times of recession.

A plan to provide comprehensive health coverage to all Oregonians is still years away from enactment, but this year, health reform advocates will push to expand coverage to about one-third of Oregon’s 600,000 uninsured. That could take some pressure off union negotiators, who have trouble winning raises when employer-paid health care costs keep going up.

As outlined in a proposal from the governor, close to 200,000 children and low-income adults would be added to the Oregon Health Plan, which spreads federal Medicaid dollars around to cover more people than the minimum required by the federal government. Funding for the additions would come from a 60- cents-a-pack cigarette tax increase and from a “provider tax” of 4 percent of gross revenues on hospitals and 1.5 percent on insurers. Those state-generated funds would be matched 2-to-1 by the federal government.

The governor is also asking the Legislature to authorize Oregon’s participation in a regional “cap-and-trade” program to reduce greenhouse gas emissions. Large greenhouse gas emitters would have to buy permits or reduce emissions when the program goes into effect in 2012. This year, a proposed bill would require reporting of greenhouse gas emissions statewide, and create a task force to help the state work out the rules of the cap and trade system, which would be presented to the 2011 Legislature for approval.

The Oregon AFL-CIO favors other methods of reducing greenhouse gas emissions, and is on record opposing cap-and-trade. Still, the federation will lobby to limit the harms and maximize the benefits for workers of such a program.

The AFL-CIO also will be calling for a closer look at tax credits for renewable energy and energy efficiency improvements — auditing them to see what kind of jobs they’ve created, and passing minimum jobs requirements for the credits to be taken.

“We believe when you’re giving tax credits to companies, taxpayers should be assured that’s going to create good-paying middle-class jobs,” explained AFL-CIO President Tom Chamberlain.

Some workers’ rights reforms may have a better chance of passage this year. Two years ago, several such reforms passed the House only to die in the Senate, where “business” Democrats held sway. This year, the Senate will have three new Democrats who are considered solid labor allies: Rosenbaum, Jackie Dingfelder and Suzanne Bonamici. And all three will be in a position to advance legislation because they’ll be chairing committees: Rosenbaum at Commerce and Workforce Development; Dingfelder at Environment & Natural Resources; and Bonamici at Consumer Protection and Public Affairs.

One of the Oregon AFL-CIO’s priorities this year is the Worker Freedom Act. The bill would make it illegal for an employer to discipline a worker for refusing to attend a workplace anti-union meeting. Such meetings are a standard tactic by employers trying to prevent a union from getting majority support.

Another priority for the AFL-CIO, and for public employee unions, is a change in the definition of supervisor in Oregon’s public employee collective bargaining law. In 1995, a Republican-led Legislature delivered a blow to public employee unionization by passing Senate Bill 750. One provision of SB 750 — disallowing police and fire unions from bargaining over workplace safety — was undone by the 2007 Legislature. This year, labor will take aim at another provision of SB 750: Its expansion of the definition of supervisor, which led to thousands of public employees losing their right to join a union.

Lawmakers may also consider expanding unemployment insurance coverage to part-time workers, and improving the formula used to calculate benefits.

And supporters will try again to establish a modest paid family leave program. Funded by a small payroll tax, the program would give a stipend to workers who now are eligible for unpaid family leave, which they can take to care for a newborn child or sick relative. A similar proposal was debated near the end of the 2007 legislative session but failed to win passage.

For the Oregon State Building and Construction Trades Council (OSBCTC), priority number one will be increasing public investment — to keep people employed and get people back to work. Executive Secretary Bob Shiprack said the building trades will work to build support for infrastructure and transportation proposals. The governor is proposing several packages of that kind, and Senate President Peter Courtney is working on a proposal for bonding authority to do an additional $350 million of improvements on college campuses and other facilities.

OSBCTC will also get behind state support for renewable energy projects. And it will back a bill to mandate permitting and inspection on private renewable energy and energy efficiency projects that are certified to receive the state’s Business Energy Tax Credit — to ensure the work is done properly.

And the building trades will push to expand prevailing wage laws. One bill would require companies to pay construction workers the prevailing wage on capital improvement projects that are approved to receive three years or more of state Enterprise Zone property tax abatements.

American Federation of Teachers (AFT)-Oregon, which represents nurses, teachers, and classified school employees, will push several ideas. One is a bill that would set a minimum ratio of nurses to patients, and require hospitals to publicly disclose their staffing ratios.

AFT will also try to make progress in its campaign to halt the shift toward use of part-time college faculty who have few or no benefits. The cause could get a boost in the House Education Committee, which will be chaired by newcomer Michael Dembrow, a longtime AFT leader.

Union opponents of privatization will rally in a coalition seeking greater transparency and accountability for government contracts. One bill to be introduced would ensure that all government contracts be made available online in databases accessible by the public. Another would require a cost-benefit analysis before state or local governments (including school districts) could contract out things like janitorial or cafeteria services. And they wouldn’t be allowed to contract out for reasons of cost savings if those savings are only achievable because of lower wages and benefits.

The Oregon AFL-CIO and the Labor Education and Research Center (LERC) at the University of Oregon are planning a Jan. 24 legislative conference at the Sheet Metal Training Center in Northeast Portland. Legislators, elected officials and labor leaders will discuss their agendas for the 2009 session.Other ideas to be floated include quality considerations written into contracts, and requirements that only “responsible contractors” that obey the law and pay decent wages could get government business.

Privatization opponents will also look at reforming the state’s Products of Disabled Individuals Law. Its critics say the law is being abused by contractors who use low-wage workers with only very mild disabilities to take work from public employees and private sector contractors.

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