Local legislators are prepared to push back
against a proposed carbon tax when the 2018 short session begins
in Salem next month.

Termed “Cap and Invest” by supporters (a
play on Cap and Trade, the label typically applied to such
legislation), bills proposed in the House and Senate aim to
reduce greenhouse gases by imposing gradually heavier taxes on
carbon emitters.

The goal is to reduce carbon emissions in
Oregon to 80 percent below levels recorded in 1990 by 2050. In
theory, more businesses would invest in pollution reduction
after doing so becomes less expensive than being taxed.

However, Sen. Dennis Linthicum, R-Bonanza,
and Rep. E. Werner Reschke, R-Klamath Falls, said businesses may
choose simply to relocate rather than pick between higher taxes
or higher pollution reduction costs.

“They’re going to say, ‘We need to go to a
different state where we can operate our business,’ and that’s
the big fear,” said Reschke.

Cost to the taxpayer

He said early estimates predict an impact
of $1,500 to $1,700 per year for the average household as energy
costs go up.

This includes an estimated $0.16 per gallon
increase in fuel taxes, leading to higher prices at the pump and
greater freight costs.

“If this goes through, $3 a gallon for
gasoline is going to be the norm going forward,” said Reschke.

He said the costs of fertilizer would also
increase by a yet-unknown amount, placing a greater burden on
the agricultural industry.

Linthicum added electrical costs are
expected to go up as well, further hampering Oregon farms.

“It’ll impact agriculture far more than
it’ll impact a homeowner because ag uses enormous wads of
electricity for water pumping,” said Linthicum.

Urban-rural disconnect

Proponents of Cap and Invest said income
from the taxes would be used to lessen the effect of the policy
on households and to invest in communities they believe are hit
hardest by global warming, particularly rural areas. Reschke
said this perception of rural Oregon being overwhelmed with
pollution comes from urban residents whose only exposure to
agriculture is seeing a tractor emitting smoke as they drive
down the highway.

“They never interact with it,” he said.
“Their income isn’t dependent on using the environment…We work
with the environment every day and we’re working to make sure it
can be sustainable long-term.”

Reschke said his goal during the short
session, which begins Feb. 5, is to delay discussion of Cap and
Invest until the regular session in 2019. He said this would be
more appropriate given the weight of the proposal and the time
required for discussion and analysis.

“I still don’t believe in it, but I’d
rather have a thorough discussion with time,” he said.

Pressure to support

Reschke and Linthicum said they believe the
Democratic majority will feel pressure to push the proposal
through this session because environmentalists were unable to
accomplish many legislative goals last year.

“There’s very powerful lobbyists lobbying
for this to go through,” said Reschke. “The environmental lobby
got what I’d call a nothing burger in 2017 and they are furious
and they want something in 2018 or heads are gonna roll.”

Linthicum said some supporters see the
proposal as a step to save the environment and arguing against
this perception could be difficult. But he said Oregon’s
continuing problem is one of over-spending and the state must
eliminate wasteful expenditures if it will be in a position to
provide help.

PERS on the table

The two also plan to continue addressing
deficits in the Public Employee Retirement System (PERS) and
support a bill that would prevent public employees from
including non-state income in calculating retirement benefits.
Currently employees who are paid by third parties for
consulting, speaking or other work are allowed to include this
income with their state salary in calculating PERS payouts.

As an example, they said former University
of Oregon football coach Mike Bellotti is drawing $492,000 per
year from PERS despite his $180,000 salary at U of O, owing to
payments from Nike and other third parties for work performed
during the last three years of Bellotti ‘s employment.
Supporters of eliminating third party payments from PERS
calculations have called the proposal the Bellotti Bill.

Linthicum said this bill may not have an
impact on reducing existing PERS liabilities, but will prevent
future retirees from exploiting PERS.

Reschke estimated this proposal will gain
support in Salem as the current policy “reeks of unfairness and
no one wants to be seen as unfair or gaming the system.”

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