February 19, 2007

 

Contact: Rebekah Orr 503-986-1904

 

CORRECTION:

Please note that the previous release contained a typographical error.  

House Democrats Press Ahead on Rainy Day Fund Despite Republican Roadblocks
House Revenue Committee approves House Bill 2707 on a party-line vote
 

SALEM--House Democrats pressed ahead today with their goal to establish a real and sustainable "Oregon Rainy Day Fund" by passing House Bill 2707 out of the Revenue Committee with a do-pass recommendation.  The plan championed by House Democrats is backed by the state's leading business associations including the Oregon Council of the American Electronics Association, Associated Oregon Industries, Oregon Business Association, Oregon Business Council, Portland Business Alliance and the Smart Growth Coalition. House Bill 2707 would establish a Rainy Day Fund and direct the 2007-2009 Corporate Kicker and one percent of the state's general fund balance into the reserve, providing stability in education, public safety, health care and other essential services even in a future economic downturn.

"It is critical for the credit rating of our state and the security and stability of essential services that our state commit to the establishment and ongoing funding of a rainy day fund," said Revenue Committee Chair Phil Barnhart (D-Central Lane and Linn Counties). "It's good government, it is responsible fiscal policy and it is long, long overdue."

All of the committee's Republican members voted against the proposal and filed notice of plans to  issue a minority report, despite indications from all 29 House Republicans in the last two weeks that they were ready to work with Democrats to create such a fund.

"Today's vote demonstrates to Oregonians that Democrats are serious about creating a stronger, more stable state," said State Representative Sara Gelser (D-Corvallis). "Today, Democrats have done what House Republicans failed to do during their sixteen years in power. Finally, real progress on a real Rainy Day fund is not only a possibility, but a certainty."


House Democrats have been fighting for years for a real Rainy Day Fund that would ensure funding for schools, health care, public safety and natural disaster recovery but previous proposals have been consistently blocked by Republican leadership.  In 2005 alone, House Democrats put forward three specific proposals for a Rainy Day Fund. All were killed by House Republican Leadership.

"The fact is that House Republican leaders have failed to lead on the issue of a Rainy Day Fund for years and they failed again today," said House Majority Leader Dave Hunt (D-Clackamas County).   "They are continually moving the goal post--continually throwing up roadblocks to progress. Today's vote, unfortunately, signals that House Republicans have either been misled by their leadership or aren't yet serious about saving or working together to create real solutions."

House Democrats had worked to negotiate with House Republican Leadership to find agreement before today's vote, but Republican leadership dug in their heels, saying House Democrats would have to  move forward on the entire package of Republican proposals if they wanted Republican votes.  That proposal by Republican Leadership would generate $400 million, but spend $620 million in new tax cuts for the wealthiest Oregonians, creating a more than $220 million hole in the 07-09 biennium and a $305 million hole in the next.

"That's not a savings plan. That's bad math and bad fiscal policy," said Hunt. The all-or-nothing ultimatum issued by Republican Leadership meant that productive negotiations came to a stand-still.

House Democrats, however, say they remain open to working collaboratively with House Republicans to find common ground on issues related to real tax reform, real support for small businesses and other responsible fiscal policy, but that HB 2707 will come to a vote as-is.

"Today's vote is the first step, not the final step, in a longer conversation about tax reform and the stability of state funding--a conversation that will continue over time," said State Representative Diane Rosenbaum (D-Portland). "But, this is the time to put aside partisan political ploys and make good on our promises to create a more accountable state government that the people of Oregon can put their faith in. It is my sincere hope that House Republicans will join us in that effort."

House Bill 2707 now moves to the floor of the House of Representatives for a full vote.

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