Parties lay out their priorities for Oregon's 2023 session

House Republicans offered more specifics, such as a temporary cut in state income taxes, a rollback in the corporate activity tax that funds school improvements, and a return to checks instead of credits for refunds of excess taxes under Oregon’s kicker law.

However, it’s unlikely any of those will advance in a Legislature still dominated by Democrats, 17-12 with one independent in the Senate and 35-25 in the House. The smaller majorities will mean that Democrats cannot pass revenue-raising measures without support from at least one Republican in each chamber. But Democratic presiding officers will still control the flow of legislation and budgets with their authority to name members and leaders of committees and assign bills to them.

Still, there is a new governor — Democrat Tina Kotek, with 15 years in the House, nine of them as its speaker — House leaders with just the 2022 short session behind them, and Senate leaders mostly in new positions. The exception is Sen. Tim Knopp of Bend, who returns for a second cycle as Republican leader; he also led Republicans when they were a majority in the House two decades ago.

Also, it is the first time that all of Oregon’s leadership positions are held by people born after the post-World War II generation known as the baby boomers.

“As we set the tone for this legislative session, I think from my position it is making sure we are bipartisan,” said Democrat Rob Wagner of Lake Oswego, who advanced from majority leader in 2021 to Senate president this year.

But he let Kate Lieber, the new majority leader from Portland, and nine other senators — all of them committee leaders — do all of the talking.

“We all deserve to live with dignity in safe, sustainable homes, free of racism and discrimination, with equal access to quality health care, world-class schools and good-paying jobs,” she said.

Lieber conceded that the Senate Democratic agenda was ambitious, even aside from the top issues already acknowledged by Gov. Kotek and other leaders.

“The moment really deserves ambition. We are facing unprecedented challenges,” she said.

“Our state government should be solving problems, but we do have to do it together.”

House comments

During the House presentation, just three people spoke: Speaker Dan Rayfield of Corvallis, Democratic Leader Julie Fahey of Eugene, and Republican Leader Vikki Breese-Iverson of Prineville.

“We believe that all of this … has to happen with all of us working together,” Rayfield said.

Rayfield said Oregon should seize opportunities for federal aid under legislation that Congress has passed in the past two years for public works, semiconductor manufacturing and scientific research, and development of carbon-free energy.

He and Breese-Iverson did take a pre-session tour of her Central Oregon district.

Although she signaled her agreement on some key priorities, Breese-Iverson also said Republicans want to approach some of them in different ways.

She also spoke up for Republican constituencies such as small businesses and farmers. Small firms account for 90% of Oregon’s businesses, and agriculture accounts for 13% of the goods and services Oregon produces annually.

“These producers continue to be sent a message that their farms and ranches are not valued in this state,” she said, referring to the 2022 legislation that phases in minimum wages for farmworkers.

“Businesses are shutting their doors and moving because the cost of doing business in Oregon is simply too great.”

Breese-Iverson supports Kotek’s stated goal in her Jan. 9 inaugural to increase annual housing production from around 20,000 (the average for the past five years) to 36,000. “But I am not sure how we get there,” she added, unless the Legislature greatly reduces regulation. Kotek has said she does not envision an end to urban growth boundaries that separate development from farmland and forests.

But Kotek also has proposed a 25-member council, including four legislators, to advise her how it can be done.

“These are things we can have conversations about,” Breese-Iverson said. “I think we can find some good wins for everybody.”

Fahey led the housing committee in 2021 and 2022. She said her work with then-Rep. Jack Zika of Redmond and other Republicans, plus the results of a forthcoming study by two state agencies and funded by the Legislature, will lay the groundwork for potential solutions.

“I think there are areas of bipartisan cooperation, particularly as it relates to increasing the supply of housing,” she said.

Budget realities

What happens to these priorities — or anything else lawmakers want to do that involves spending — will be shaped by the two-year state budget, which legislators must complete by June 30. Kotek’s recommendations as a new governor are due by Feb. 1; there are two more economic and revenue forecasts, the last one by May 15.

State economists have warned that a “mild” downturn could result in a $3 billion gap between current and projected income tax collections and lottery proceeds, the most flexible sources for state spending. (The budget also contains federal grants and other sources that are restricted.)

Sen. Elizabeth Steiner, D-Beaverton, said the state budget has benefited from back-to-back cycles of healthy tax collections — a record $3.7 billion kicker refund is projected at the close of the current cycle — and one-time federal pandemic aid of $2.6 billion from the 2021 American Rescue Plan Act. About $500 million of that total was saved for use in the forthcoming 2023-25 budget.

“We have used it primarily for one-time investments, but some of them have gone to programs that people will want to see continued. We are going to have to figure out how to pay for that,” said Steiner, the Senate co-chair of the Legislature’s joint budget committee. “We have to be thoughtful about how we manage our budget.”