Legislative Lawyer Paints Dire Picture of Consequences of Failure to Pass Budget

As GOP senators continue work stoppage, the Senate president threatens daily fines.

CARDINAL SINS: Oregon school funding would largely vanish come November if the Legislature doesn't pass a budget. (Blake Benard)

As the Oregon House gamely continues work on bills destined to die if Senate Republicans do not return from their walkout, a new opinion from the office of Oregon Legislative Counsel Dexter Johnson paints a dire picture of what it would mean if the Legislature fails to pass a budget (which it cannot do unless GOP senators return).

The Oregon Constitution requires that the Legislature pass a balanced budget every two years to fund continuing operations.

In short, the legislative counsel’s opinion says, the failure to pass a budget would cause the state to rely on a “continuing resolution” to fund most basic services until Sept. 15, 2023, when the resolution expires. (Agency budgets would not increase from the previous biennium, which means some services would be curtailed.)

After the resolution expires, the opinion says, things would take a serious turn for the worse: K-12 schools would lose two-thirds of their funding; Oregon Department of Transportation work would grind to a halt.

The other source of school funding, property taxes, could not fill the gap and would not become available until long after school starts in the fall. “Local property tax revenue is not available until after November 15,” the opinion says. “Projects primarily funded by the state highway fund could not continue.”

Other major state agencies, such as the Oregon Health Authority, the Oregon Department of Human Services and the Oregon Department of Corrections, that depend on the general fund could shut down, according to the opinion penned by senior deputy legislative counsel David Fang-Yen.

And, by law, there is nothing Gov. Tina Kotek can do to extend the continuing resolution, nor can the Legislature’s Emergency Board, which makes budget adjustments between regularly scheduled legislative sessions, provide any relief.

“The governor cannot extend the continuing resolution,” the opinion says. “The emergency board could exist but could not conduct business.”

Yesterday, Kotek issued a pessimistic statement after days of unsuccessful negotiations with Senate President Rob Wagner (D-Lake Oswego) and Senate Minority Leader Tim Knopp (R-Bend) aimed at getting Republican senators back to work.

She said that House Bill 2002, a reproductive rights bill and top Democratic priority, remains a sticking point.

“Sen. Knopp has made clear to me that there is not a path forward unless HB 2002 is substantially amended or dead. It is clear from my conversations that negotiating on HB 2002 is not an option,” Kotek said May 31. “There is still a window for Senate Republicans to return to the table and achieve some of their policy goals for the session and deliver for Oregonians, but it is getting more narrow by the hour.”

The legal opinion notes that Illinois, which also has a balanced budget requirement, failed to pass a budget in 2016-18, necessitating court action to keep state government running. One further consequence of that failure: Bond rating agencies downgraded Illinois’ debt, making it more expensive to borrow money.

Many Salem observers are skeptical that Republicans will return prior to the scheduled June 25 conclusion of the session. If they don’t, Kotek could later summon lawmakers to a special session to pass budgets, but there’s no guarantee Republicans would comply.

During a Senate floor session June 1, Wagner attempted to increase pressure on his Republican colleagues, many of whom already face the possibility of not being allowed to seek reelection under the terms of Measure 113 (although that process is in dispute).

He announced he will fine absent members $325 per day starting June 5.

That threat didn’t appear to motivate Knopp. “Senate Republicans don’t feel compelled to entertain his political theater,” Knopp said. “Once again, he has retaliated against members who are exercising their right to peacefully protest his own unlawful, hyperpartisan actions.”

The walkout is now in its fifth week and is the longest in Oregon history.

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