INFORMATIONAL MEETING: INVITED TESTIMONY

PUBLIC HEARING: SB 549

TAPES 58-59, A-B

SENATE REVENUE COMMITTEE

March 11, 2003 1:00 PM STATE CAPITOL BUILDING

Members Present: Senator Ryan Deckert, Chair

Senator Ted Ferrioli, Vice Chair

Senator Tony Corcoran

Senator Lenn Hannon

Senator Charlie Ringo

Senator Bruce Starr

Invited Witness Present: Randall Edwards, Oregon State Treasurer

Witnesses Present: Fred Hansen, General Manager, Tri-Met

George Passadore, President, Tri-Met Board

Mike Salsgiver, Portland Business Alliance

Lynn Lundquist, President, Oregon Business Association

Randall Thom, CEO, Bio Reaction Industries

Baltazar Ortiz, CEO, Ortiz & Associates

Tom Brian, Washington County Commissioner

Linda Lynch, Lane Transit District Board

Pat Hocken, Lane Transit District Board

Bob Shiprack, Oregon State Building and Construction Trades Council

Jeff Carlson, Iron Workers Union Local 29

Marc Anderson, International Brotherhood of Electrical Workers Local 125

Mary Lou Ritter, Washington County Dept. of Aging and Veteran’s Services

Roger Martin, Oregon Transit Association

Bill Perry, Oregon Restaurant Association

Tom Gallagher, Urban Developers Coalition

Staff Present: Lizbeth Martin-Mahar, Legislative Revenue Office

Paul Warner, Legislative Revenue Office

Tara Lantz, Committee Assistant

TAPE 58, SIDE A

003

Chair Deckert

Calls meeting to order at 1:07pm

010	Randall Edwards	Discusses the reasons for the drop in Oregon’s financial ratings. Gives recommendations on how to improve them in the future. Exhibits 1-3.
091	Sen. Ringo	Asks if a downgrade means that the raters see a risk of default on a bond.
093	Edwards	Responds that they don’t believe Oregon would default on a bond and that they see the financial integrity of the state in many facets.
098	Sen. Deckert	Asks if Edwards would comment on the media’s views on Oregon’s policies.
112	Edwards	Gives history of the last time Oregon was downgraded. States that this downgrade is really about the perceptions of how the state manages its finances. Discusses several factors over the last decade that have come to a head in the last week with the continuing downfall of state revenue and recommends looking at new revenue options.
146	Sen. Corcoran	Discusses a letter from a constituent who complained about the media downplaying the cumulative factors that have led to the downgrade in ratings and the need to educate the public on the policies that have put Oregon in this situation.

OPENS PUBLIC HEARING ON SB 549

204	Lizbeth Martin-Mahar	Explains SB 549 which increases the maximum payroll tax rate for mass transit districts by .1 percent, phased in over 10 years at .01 percent a year. Exhibit 4. Discusses revenue impact. Exhibit 5.
226	Fred Hansen	Gives background on TriMet and discusses the service area. Exhibit 6.
274	Hansen	Discusses the LIFT program for the frail, elderly, and disabled.
291	Hansen	Discusses the growth in ridership. Questions and answers follow.
311	Hansen	Discusses the environmental benefits of TriMet.
344	Hansen	Discusses bus system improvements and the transit tracker.
387	Hansen	Discusses rider demand and regional expectations.
408	Hansen	Discusses new federal funding for 2003-2009 and how SB 549 will enable the TriMet to obtain federal dollars.

TAPE 59, SIDE A

020	Hansen	Explains the productivity improvement project.
034	Hansen	Discusses the current payroll tax and how SB 549 would affect it. Discusses their projected revenues.
063	Hansen	Stresses the importance of SB 549 in making federal funding available to TriMet.
067	George Passadore	Explains that SB 549 is intended to help them through the current recession but rather to plan for future growth. States that they have found universal support for the concept of a payroll tax from the business community and have made the commitment to use the authority to increase the tax rate only when the economy is improved. Refer to written testimony. Exhibit 6.
138	Sen. Deckert	Asks if they have a percentage for the average employer.
141	Hansen	Responds that they have calculated them for every employer that has come to them and summarizes those findings.
148	Mike Salsgiver	Testifies in support of SB 549 for three reasons: the Alliance was impressed with TriMet’s Productivity Improvement Program, they see the need for an increase in revenue for TriMet to meet their service obligations, and are pleased with TriMet’s commitment to wait to implement the tax increase until the region is well into economic recovery. Refer to written testimony. Exhibit 7.
212	Sen. Starr	Asks if the increase would be phased in until 2016 if it weren’t implemented until 2006 or if the phase in would end ten years from the passing of the bill.
237	Hansen	Responds that it would be phased in until ten years after the increase was implemented.
241	Sen. Starr	Asks why the bill limits the annual payroll tax increase to .02 percent when they’re talking about .01 percent.
247	Hansen	Responds that if there was a year that there was no reason to implement the increase, this would say that to make that up they could not go over .02 percent a year.
271	Lynn Lundquist	Explains that the Oregon Business Association only gets involved in local issues except where they have statewide significance and that SB 549 has a statewide significance. Testifies in support of SB 549 because the Association agrees with the concept of using new revenues for new services and because TriMet will not impose these increases unless they have support from the business community.
321	Randall Thom	Discusses his small startup business and testifies in support of SB 549. Explains his past frustrations with TriMet but how his experiences have proved to him that it is efficiently run and important to business in the metro area. Refer to written testimony. Exhibit 8.

TAPE 58, SIDE B

010	Baltizar Ortiz	Testifies in support of SB 549 because the investment is worthwhile to his business and the community, it provides an essential service for low income and Hispanic people, and it is a very minor increase. Refer to written testimony. Exhibit 9.
053	Tom Brian	Presents a packet of letters from various local governments in support of SB 549. Testifies in support of SB 549 because the regions ability to increase and sustain economic vitality and quality of life is dependent on the continued investment in transportation system.
114	Sen. Deckert	Asks how the state became the arbitrator of local transit payroll tax fees.
119	Brian	Responds that it goes back to when Tri-Met was formed.
127	Linda Lynch	Testifies in support of SB 549. Discusses Lane Transit District (LTD).
142	Pat Hocken	Discusses the services provided by LTD and future plans to expand which are dependent upon federal funds and matching dollars. Discusses the negative impact of the current recession on Lane Transit District and how SB 549 would help them maintain services during this time.
221	Sen. Deckert	Asks if LTD has been doing outreach to the business community.
223	Lynch	Responds that they have done outreach and that they have generally seen support. States that they have made the same pledge to the business community that they would come back to the business community before imposing a tax increase.
233	Hocken	Discusses the history of LTD’s relationship with the business community.
249	Bob Shiprack	Discusses the unemployment rate for the members of the Building and Construction Trades Council. Testifies in support of SB 549 because it would provide employment for construction workers and contractors.
279	Jeff Carlson	Testifies in support of SB 549 because it would create jobs for his members. Discusses the unemployment rate for the Iron Workers Union Local 29 and his experiences using various transportation systems, pointing to the failure of Seattle to build a viable transit structure.
300	Marc Anderson	Testifies in support of SB 549 because it would create employment for his members. Discusses the work that would be created by transit expansion.
347	Bill Perry	Testifies against SB 549 because the hospitality industry has a low total revenue intake compared with the labor dollars spent. States that he is supportive of the idea but not a payroll tax.
398	Tom Gallagher	Expresses concern for section 2 of the bill and how the full implementation level will be reached. Testifies in support of the concept of using the new revenues for new services but is concerned that there is nothing in the bill about it.

TAPE 59, SIDE B

010

Bill Perry

Discusses the current move in Portland to implement a payroll tax for schools and how this has created extra volatility.

018	Sen. Deckert	Asks if the payroll tax for Portland schools is going to be voted on tomorrow.
019	Perry	Responds that he doesn’t know.
027	Mary Lou Ritter	Testifies in support of SB 549 because transportation is critical for people who cannot drive, such as the elderly, and this bill will help to build transportation in the future to make it more accessible to these people.
078	Roger Martin	Gives historical background of Oregon transit. Testifies in support of SB 549 because it is the least onerous tax and is important to the business community. States that all regions of the state are in support of SB 549 because when TriMet and LTD get stronger, the transportation across the whole state also gets stronger.

CLOSES PUBLIC HEARING ON SB 549

164

Sen. Deckert

Adjourns meeting at 2:40pm.

Tape Log Submitted by,

Tara Lantz, Committee Assistant Reviewed by Kim Taylor James

Exhibit Summary:

1. Randall Edwards, Standard & Poor’s Oregon Rating, 2pp.

2. Randall Edwards, Moody’s Investors Service Oregon Rating, 4pp.

3. Randall Edwards, Fitch Oregon Rating, 5pp.

4. SB 549, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.

5. SB 549, Lizbeth Martin-Mahar, Revenue Impact Statement, 1p.

6. SB 549, Fred Hansen, Written Testimony, 38pp.

7. SB 549, Mike Salsgiver, Written Testimony, 1p.

8. SB 549, Randall Thom, Written Testimony, 2pp.

9. SB 549, Baltazar Ortiz, Written Testimony, 2pp.

10. SB 549, Marcela Alcantar, Written Testimony, 1p.

11. SB 549, Carrol Lynn Jolley, Written Testimony, 1p.

12. SB 549, Tom Brian, Written Testimony, 11pp.

13. SB 549, Pat Hocken, Written Testimony, 1p.

14. SB 549, Christine Hagerbaumer, Written Testimony, 2pp.

15. SB 549, Jacob Brostoff, Written Testimony, 1p.