Special session looms as virus hammers economy
With the spread of the COVID-19 virus straining Oregon's economy and health care systems, legislative leaders are calling for a special legislative session to allocate money and pass laws to ease the outbreak's impact.
However, with the federal government still finalizing its response and as the situation continues to change daily it's not clear what shape the session will take.
"It is likely that until the public health situation improves, or at least the fears subside as health policy plans are announced, the economic damage will continue to mount."
"This is dynamic," said Republican Senate Leader Herman Baertschiger Jr. "We don't know how bad this is going to get."
On Monday, March 16, legislative leaders from both parties issued statements calling for a special session but didn't include details such as the date, how long legislators would meet or what specifically they would work on. During a press call on Tuesday, March 17, Gov. Kate Brown said that the Legislature was likely a week or two away from convening.
In her eyes, there are two main pieces that need to be addressed by the Legislature: financial relief for workers and business owners, and the needs of Oregon's health care systems and the workers responding to the outbreak.
"These are answers to questions that we will need in the next week or so that I think we need before we move into a special session," Brown said. "It would also be helpful to know what in terms of a financial package and what type of relief will be available from our federal partners."
On Monday, the federal Centers for Disease Control and Prevention announced it awarded $7.2 million to support Oregon's efforts to fight the spread of novel coronavirus. That's in addition to $500,000 the state received earlier this month, with more federal help expected to be allocated to the state in the coming weeks.
'Narrow budget items'
Legislative leaders couldn't be reached for comment. But Baertschiger said that he didn't expect the session to be called any time soon, citing the many unknowns.
He said that Congress is currently in the process of allocating money to states for the coronavirus outbreak and Oregon will have to wait until it knows how much money it has before going into a special session.
He said he expected that the session would be limited to "pretty narrow budget items" and would likely not deal with policy issues unless they relate to the state's handling of the outbreak.
The regular session ended earlier this month in acrimony about a Republican walkout intended to stymie a carbon-reduction bill. When asked about controversial legislation being introduced during the session, Baertschiger said that he expects everyone to be focused on the coronavirus. "I think this is not the time to fight but solve problems," he said.
Legislative staff who handle budgeting could not be immediately reached. Earlier this year, legislators were presented with a rosy outlook on the state's finances. Ken Rocco, legislative fiscal officer, said that the state's General Fund is projected to have $1.15 billion above what the Legislature has already committed in the current state budget. "As of right now that is money that has not been addressed or appropriated," he said.
Rocco also pointed to an additional $621 million in the Education Stability Fund and $667 million in the state Rainy Day Fund, which serve as reserves.
The most recent revenue forecast, issued in February, notes that "Fortunately, Oregon is better positioned than ever before to weather a revenue downturn."
However, the forecast also describes the coronavirus triggering a recession as a "worst case scenario."
Legislators aren't required to have an updated forecast going into a special session. But the next forecast is due in late May, which could coincide with a special session.
On Tuesday, state economist Josh Lehner published a blog post indicating that the coronavirus would dampen money flowing into state coffers. He said the Oregon Office of Economic Analysis was assessing damage the outbreak has inflicted and running forecast models that include a recession.
"It is still too soon to know the full extent of the economic damage as solid data remains weeks away," he said. "It is likely that until the public health situation improves, or at least the fears subside as health policy plans are announced, the economic damage will continue to mount."
Lehner said the full picture of the state's finances wouldn't emerge for months. The next full budget forecast update will be released May 20. So far, he said that income tax withholdings were weak, but growing, and initial employment claims didn't show cause for concern.
However, video lottery sales declined, he said.
Despite uncertainties, the groundwork for a special session is already being established. Two new committees — the Legislature's Special Joint Committee on Coronavirus Response and the Governor's Economic Advisory Council — will meet this week to identify some of the lingering issues around economic relief and needs of health care systems to respond.
"We recognize the urgent and wide-ranging needs facing Oregonians as the worldwide coronavirus pandemic continues to develop," legislative leaders from both chambers and both parties said in a statement Monday. "The Legislature will return for a special session as soon as we have an emergency response package that will address the statewide impacts on families, workers and businesses."
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