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 Veteranís 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 Oregonís 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 donít 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 mediaís views on Oregonís 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 TriMetís Productivity Improvement Program, they see the need for an increase in revenue for TriMet to meet their service obligations, and are pleased with TriMetís 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 werenít 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 theyíre 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 LTDís 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 doesnít 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 & Poorís Oregon Rating, 2pp.

2.      Randall Edwards, Moodyís 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.