Policy Update - 5.26.17
Renewing the Residential Energy Tax Credit (RETC) is OSEIA’s top legislative priority this session. Since the prospects for winning on RETC are very much entwined with the question of how the legislature will address the state’s $1.4 billion budget deficit, OSEIA has been following the budget deficit discussion closely.
The legislature’s first job, above all others, is to pass a balanced state budget for the next biennium. With such a large shortfall, any program that costs money is potentially on the chopping block—that includes RETC and even critical state programs like education and healthcare.
Oregon’s budget deficit is structural in nature, meaning that the state’s taxes and other revenue sources routinely fail to generate sufficient funding to cover the cost of state services. Without reform to Oregon’s tax policies, large deficits will continue to impact Oregon policy-making in future sessions and threaten state programs.
To address this structural deficit, legislative leaders in both chambers are developing revenue proposals. Depending on an eventual revenue package’s overall size, it could be a systemic fix that also prevents future year’s budget deficits.
It remains very unclear whether the legislature could pass any revenue package. Any new tax bills require a three-fifths majority vote (rather than the usual simple majority). Without a new revenue package, legislators will most certainly face another large budget deficit in the 2019 session and will have to resolve this year’s budget deficit through a combination of smaller increases in taxes, fees, and other sources of revenues and large spending cuts. Given all of that, the prospects of extending RETC without a new revenue package this year is much smaller.
OSEIA has never weighed in with legislature on tax issues before. But the need for the RETC may require us to do that. We are seeking input on how potential policy positions on these issues could affect members’ work and company. Members have a survey in their inbox. Go here to fill out the survey if you haven’t already.
We will be also asking for OSEIA members to contact legislators very soon to support RETC. Once we define a specific funding mechanism, we’ll need to make sure that any extension stays in the final package. We know OSEIA members are ready to help deliver the message on how important RETC is. The time to help is coming quickly so stay tuned!