Walkout Fallout: Legislature Grapples with Dire Consequences

The Takeaway

Oregon's legislature is like a car stalled in the middle of nowhere without phone service to call for someone to bail them out. It has now been a month since the Senate last convened in a regular floor session and the prospect of the session regaining life seems fleeting. For the last week or so, Gov. Tina Kotek (D) had been meeting with legislative leaders and caucuses as part of a listening tour to see how to engage to break through the tensions and resolve the partisan conflict. On Tuesday, the governor issued a press release saying those talks had reached an impasse and she would step away from efforts to broker a deal to end the political crisis and focus on the state budget.

The state budget is becoming a bigger issue as the walkout lingers into the final days of the session. Service Employees International Union Local 503, the state's largest public-sector union representing tens of thousands of government employees and one of the most influential forces in Democratic politics, is deep into contract negotiations with the state. Their current contract expires on June 30 and if the legislature does not enact a budget before July 1, the walkout could have dire consequences for the union and its members. Although the legislature passed a continuing resolution before the walkout began, the resolution only maintains funding at 2021-23 service levels through September 15. Due to inflation and an increase in the cost of living, the next contract is likely to include salary and other compensation increases. If the state can only operate using funding levels from the previous budget cycle, furloughs and layoffs are possible. And for the union, that could mean reductions in their operating budget as member dues slow.

While it might seem like theater, this walkout is unlike previous walkouts experienced in recent years and the implications are very real. Late last week, House Republican Leader Vikki Breese-Iverson received a memo from legislative lawyers detailing the consequences of an extended walkout through the summer and into the fall. Perhaps most notably, the memo considers the possibility of the walkout's impact on the state budget if lawmakers fail to break through the stalemate by September 15. For many lawmakers and insiders, the idea of the long session collapsing, even after the walkout began, seemed to be an afterthought. The memo indicates political leadership is preparing for the possibility of a boycott extending many more weeks, maybe even months.

Despite the potential budget and political fallout of the walkout, the parties only entrenched themselves deeper in their positions this week. Senate Democrat and Republican leadership seemed to only communicate through heated exchanges of press releases throughout the week. Republicans regularly characterize Democrats, particularly Senate President Rob Wagner, as "unlawful, uncompromising, and unconstitutional" and portray Democrat actions as "extreme." Meanwhile, Democratic leaders regularly draw attention to the hundreds of bills awaiting votes in the Senate.

On Thursday, Senate Democrats turned up the heat on the Republicans and Independent boycotting the floor session. After their now customary quorum call and call of the senate, Senate Majority Leader Kate Lieber (D-Beaverton) motioned to compel the absence of missing members, potentially triggering daily fines imposed on legislators refusing to attend for regular business. Democrats also tried to impose penalties during the 2019 walkouts but abandoned the effort due to questionable authority and legal disputes that would likely arise from such fines. It's unclear if the analysis has changed or if temperaments have boiled to a point where using public resources to litigate the issue is now worth pulling the trigger.

Unlike previous walkouts, there is no negotiation to find a political breakthrough; both sides fundamentally believe they have the upper hand. Although it's important to hold onto some hope the session can adjourn under more normal circumstances, it's becoming difficult to map out a course where cooler heads prevail and the legislature adjourns for the year.

The Tale of Two Houses

Unlike the Senate walkout, the House has been refreshingly unremarkable. The chamber is close to finishing its business for the year and only holding floor sessions once or twice a week, a frequency that will continue into next week. That is not to say the House is without its drama. On Wednesday, the House rejected a Senate bill overriding homeowner's associations from prohibiting association members from raising chickens on their properties. While a measure failing on the floor is not particularly notable—it happens a few times each session—the death of this bill was particularly unusual. After the bill failed its first vote, the chamber received a motion to reconsider it, allowing for a second vote during its next meeting. Ultimately, the bill failed with even more votes than its first go around.

As the House continues to conduct regular business, moving bills out of their final committees and passing them on the floor, the chamber is close to running out of work for the session. Some lawmakers are discussing the possibility of adjourning early or only holding pro forma sessions as everyone waits out the will-they-won't-they return of the Senate.

Legislative Tax Plan Hits Some Bumps

The legislature has spent a lot of time over the last few months discussing policy proposals to promote economic growth. In the earliest days of the session, Democrats and Republicans worked together to advance a policy package aimed at boosting the state's attractiveness for investments from the federal Chips & Science Act. Due to technicalities (and politics), conversations about tax incentives were deferred until later in the session once lawmakers received the final revenue forecast of the session.

According to tax and legislative leaders, the window for legislative committees, including the tax and budget-writing committees, to finish their business is closing. And the optimism over a robust or even effective tax incentive package is fading. This morning, the Joint Committee on Tax Expenditures held hearings on dueling proposals from tax leaders and announced an ongoing effort to settle their differences. Unfortunately, the legislature seems to be reverting to its favorite pastime of microtargeting new incentives and scaling back the benefits the state has offered for decades.

What We're Reading This Week

• For generations, Oregon had a reputation for conducting its politics in a unique bipartisan manner, with its leaders prioritizing statesmanship over partisanship. A recent article by the Associated Press discusses how the walkout represents a fundamental change in that philosophy.
• As lawyers spend more time reviewing Measure 113, which intended to prohibit lawmakers from staging walkouts by barring them from reelection, some are finding loopholes that could undermine the entire constitutional amendment.
• Among the many demands from Senate Republicans to return to the building is to revive the practice of issuing the personal income tax kicker refunds as a check instead of a tax credit and sending those checks to residents much earlier than the next tax filing season.
• On Thursday, Republicans held an unofficial oversight committee digging into abuses in state government. According to some reports, some of the discussion turned into a rebuke of the party's walkout.
• Oregon agencies and school districts face dire consequences without the legislature adopting a state budget before the start of the next fiscal year on July 1.