Local reps to challenge carbon tax in short session

by STEPHEN FLOYD, Herald and News Jan 28, 2018  

Local legislators are prepared to push back against a proposed carbon tax when the 2018 short session begins in Salem next month.

Termed “Cap and Invest” by supporters (a play on Cap and Trade, the label typically applied to such legislation), bills proposed in the House and Senate aim to reduce greenhouse gases by imposing gradually heavier taxes on carbon emitters.

The goal is to reduce carbon emissions in Oregon to 80 percent below levels recorded in 1990 by 2050. In theory, more businesses would invest in pollution reduction after doing so becomes less expensive than being taxed.

However, Sen. Dennis Linthicum, R-Bonanza, and Rep. E. Werner Reschke, R-Klamath Falls, said businesses may choose simply to relocate rather than pick between higher taxes or higher pollution reduction costs.

“They’re going to say, ‘We need to go to a different state where we can operate our business,’ and that’s the big fear,” said Reschke.

Cost to the taxpayer

He said early estimates predict an impact of $1,500 to $1,700 per year for the average household as energy costs go up.

This includes an estimated $0.16 per gallon increase in fuel taxes, leading to higher prices at the pump and greater freight costs.

“If this goes through, $3 a gallon for gasoline is going to be the norm going forward,” said Reschke.

He said the costs of fertilizer would also increase by a yet-unknown amount, placing a greater burden on the agricultural industry.

Linthicum added electrical costs are expected to go up as well, further hampering Oregon farms.

“It’ll impact agriculture far more than it’ll impact a homeowner because ag uses enormous wads of electricity for water pumping,” said Linthicum.

Urban-rural disconnect

Proponents of Cap and Invest said income from the taxes would be used to lessen the effect of the policy on households and to invest in communities they believe are hit hardest by global warming, particularly rural areas. Reschke said this perception of rural Oregon being overwhelmed with pollution comes from urban residents whose only exposure to agriculture is seeing a tractor emitting smoke as they drive down the highway.

“They never interact with it,” he said. “Their income isn’t dependent on using the environment…We work with the environment every day and we’re working to make sure it can be sustainable long-term.”

Reschke said his goal during the short session, which begins Feb. 5, is to delay discussion of Cap and Invest until the regular session in 2019. He said this would be more appropriate given the weight of the proposal and the time required for discussion and analysis.

“I still don’t believe in it, but I’d rather have a thorough discussion with time,” he said.

Pressure to support

Reschke and Linthicum said they believe the Democratic majority will feel pressure to push the proposal through this session because environmentalists were unable to accomplish many legislative goals last year.

“There’s very powerful  lobbyists lobbying for this to go through,” said Reschke. “The environmental lobby got what I’d call a nothing burger in 2017 and they are furious and they want something in 2018 or heads are gonna roll.”

Linthicum said some supporters see the proposal as a step to save the environment and arguing against this perception could be difficult. But he said Oregon’s continuing problem is one of over-spending and the state must eliminate wasteful expenditures if it will be in a position to provide help.

PERS on the table

The two also plan to continue addressing deficits in the Public Employee Retirement System (PERS) and support a bill that would prevent public employees from including non-state income in calculating retirement benefits. Currently employees who are paid by third parties for consulting, speaking or other work are allowed to include this income with their state salary in calculating PERS payouts.

As an example, they said former University of Oregon football coach Mike Bellotti is drawing $492,000 per year from PERS despite his $180,000 salary at U of O, owing to payments from Nike and other third parties for work performed during the last three years of Bellotti ‘s employment. Supporters of eliminating third party payments from PERS calculations have called the proposal the Bellotti Bill.

Linthicum said this bill may not have an impact on reducing existing PERS liabilities, but will prevent future retirees from exploiting PERS.

Reschke estimated this proposal will gain support in Salem as the current policy “reeks of unfairness and no one wants to be seen as unfair or gaming the system.”

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