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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
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
"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.