Senator Doug Whitsett

Jul 19, 2012 — by: Senator Whitsett

Under current law, American families and businesses are facing nearly half a trillion dollars in increased federal taxes next year. If Congress and the President fail to take action, this unprecedented expansion in federal taxes will equal nearly $1,600 for every man, woman and child in the United States.

The specter of these enormous additional tax burdens is already causing a significant negative impact on our economy. Investors, businesses and families alike are delaying investments and foregoing purchases until they know what to expect in the federal tax arena. The economic stagnation caused by government-created uncertainty is slowing private sector job creation and preventing millions of unemployed Americans from going back to work.

The combined expiration of the Bush-era tax cuts, the ending of employer payroll tax reductions and enormous new taxes imbedded in President Obama’s Affordable Care Act will cost American taxpayers at least $494 billion next year. The preponderance of these tax increases will be levied on America’s middle class, working families and the owners of the small businesses that create nearly three out of every four new jobs.

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Mar 10, 2012 — by: Senator Whitsett

Current Oregon law requires that all public building construction and reconstruction projects include solar energy technologies when their total contract price exceeds one million dollars. The law requires that one and one half percent of the entire construction cost for new building must include solar electric, solar thermal or passive solar technologies. It also applies to building renovations that exceed one million dollars and fifty percent of the total building value. The solar requirement can be transferred and added to another building in the event that the contractor determines that solar technologies are not feasible for a specific building.

I voted against the enactment of the law in 2007 for two reasons. First, I believe that construction contract decisions should be based on free market cost-to-benefit analysis rather than political mandates. Second, the most cost effective form of renewable energy should be used if our state government is going to force the inclusion of renewable energy technology.

A salient example of the second point is the application of the solar technology requirement to a reconstruction project for the hospital in Lakeview. Geothermal energy was piped into the building from an existing resource to supply virtually all the HVAC system. Yet Oregon law absurdly required the contractors to spend more than a quarter of a million dollars on solar technologies for the building. This is not an isolated occurrence in our area. Five of the seven known major geothermal resource areas in Oregon are located in Klamath, Lake and southern Deschutes counties.

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Feb 26, 2012 — by: Senator Whitsett

The Oregon Department of Environmental Quality (ODEQ) will soon decide whether or not to adopt a Low Carbon Fuel Standard (LCFS) for Oregon. The Department was directed to study the issue by the Oregon Legislature by HB 2186 in 2009. That bill was adopted by a very close vote even though the Legislature was controlled by a Democrat supermajority at the time. Many of us that opposed the concept in 2009 believed it was unnecessary, probably illegal and likely to trigger an economic chain reaction that would drive up costs, drive out businesses and destroy jobs.

The alleged purpose of the LCFS is to reduce greenhouse gas emissions by reducing the full fuel-cycle carbon intensity of transportation fuel used in the state. Carbon intensity is an estimate of the total greenhouse gas emissions related to the extraction, refinement, shipping and consumption of a finished transportation fuel. The LCFS would neither require the use of a specific fuel nor establish any motor-vehicle specifications.

The concept is to reduce Oregon’s dependence on petroleum products and to stimulate the production of alternative low-carbon fuels such the production of ethanol from both corn and cellulose and the production of biodiesel. It is similar in concept to the Renewable Portfolio Standard that requires the use of an ever increasing percentage of renewable energy regardless of the cost to the consumer. The LCFS too would serve to require the use of an ever increasing percentage of regionally produced biofuels regardless of the cost to the consumer.

In my opinion, the adoption of a state LCFS is unnecessary because greenhouse gas emission has little if anything to do with global warming or climate change. A growing number of climatologists and other learned earth scientists are publicly stating their rejection of the greenhouse gas theory of global warming. They are systematically identifying scientifically reproducible data that demonstrates the theory to be fatally flawed. They are also advancing alternative explanations for the modest global warming that has occurred in the past half century. Those explanations more closely correlate with empirical data and the stable to cooling temperature trends currently being experienced. Moreover, even if the greenhouse gas theory of global warming was valid, the changes in greenhouse gas emissions contemplated by implementing an Oregon LCFS would result in no significant difference in global greenhouse gas emissions.

The proposed Oregon LCFS is nearly identical to the LCFS adopted by the state of California. That LCFS has just been ruled unconstitutional by the United States District Court for the Eastern District of California (Case No. CV-F-09-2234 LJO DLB). In a summary judgment the Court ruled that the LCFS violates the Commerce Clause of the United States Constitution for a variety of reasons. It only stands to reason that another U.S. District Court would find the nearly identical proposed Oregon LCFS equally unconstitutional.

The costs of complying with any LCFS can only result in higher fuel costs for everyone. Compliance with a state or regional LCFS would certainly result in an uncompetitive business environment that would result in out-migration of businesses and jobs. The last thing that Oregon needs is another reason for businesses to leave Oregon or for capital investors to further shun the state.

Oregon is currently a national leader in biofuel requirements even without a LCFS. The state already mandates ten percent ethanol in each gallon of gasoline and five percent biodiesel in every gallon of diesel sold in Oregon. To unilaterally increase those already strict standards would be useless and economically dangerous. The ODEQ should make those obvious findings and report them to the Legislature as directed.

Oregon must NOT adopt a Low Carbon Fuel Standard. Any hope of a meaningful economic recovery depends on avoiding the LCFS like the economic plague that it will certainly bring to Oregon.

Please remember, if we do not stand up for rural Oregon no one will.

Best Regards,

Doug

 

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Jan 5, 2012 — by: Senator Whitsett

From Senator Whitsett’s Friday, January 6, 2012 Newsletter

Oregon statistics paint a grim picture of local family violence and neglect. Klamath County ranks in the top tenth percentile in domestic violence, child abuse and the use of illegal drugs. Our local rate of child abuse and neglect stands at an astounding twenty five cases per one thousand children. That rate of abuse is twice as high as the Oregon and national averages. In fact among the 36 Oregon counties, Klamath ranks a dismal third in child abuse and neglect.

What kind of a craven coward would beat his wife or child senseless for any reason? Personally, I cannot fathom what would cause a man to physically or sexually abuse a woman or child even once. Yet it happens on a daily basis in our community. The abuse is usually serial and prolonged.

A very small percentage of the domestic and sexual violent acts that are committed are ever reported to law enforcement authorities. Of those victims that do report, we know that, on average, they have previously experienced violent intimate partner abuse at least seven times. Domestic and sexual violence affects not only those abused, but witnesses, family members, co-workers, friends and the community at large.

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Jan 5, 2012 — by: Senator Doug Whitsett

From Senator Whitsett’s Wednesday, January 4, 2012 Newsletter

Our stagnant economy plus our ongoing high rates of unemployment and underemployment continue to result in reduced state revenue. The actual amount of money available to spend during this budget period is in fact projected to be less money than was spent during the last budget period. At the same time the cost of paying state employees will increase by about 7 ½ percent. Add inflationary costs, increased debt service on borrowed money plus expanded case loads and the cost of maintaining current state services will swell by about 12 percent.

This sobering reality will result in Oregon state legislators searching for ways to reduce the cost of state government during the upcoming February Legislative Assembly. I believe that we must prioritize those services and then drastically curtail or eliminate the services determined to be the least important.

In my opinion, the cost of state advertising and communications is one area of spending that is ripe for reductions. A recent investigative report by the Oregonian determined that Oregon employs at least 220 public affairs specialists, design shop employees, and communications and public relations managers. The cost of their combined biennial salaries and benefits approach $40 million.

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Jan 5, 2012 — by: Senator Whitsett

From Senator Whitsett’s Friday, December 24, 2011 Newsletter

For nearly a century Klamath County irrigators received significant financial benefit from two very low-cost 50-year PacifiCorp power contracts. Those agreements authorized PacifiCorp’s utility precursor to build hydroelectric dams on the Klamath River. The pacts provided the irrigators with inexpensive electricity to power their irrigation pumps in exchange for the company’s right to use the “run of the river” to generate electricity.

The first contract provided low cost power to the Klamath Project irrigators. The original contract was due to expire in 1956. At that time the utility negotiated two new 50-year contracts in exchange for the authority to enlarge their hydroelectric generating capacity on the River. One contract provided low cost power to Project water users and the other contract provided essentially the same benefits to Off-project water users. PacifiCorp made clear in 2005 that it would not renew the two 50-year low-cost power contracts when they expired in 2006.

It was apparent that PacifiCorp’s unilateral decision would have resulted in at least a ten-fold increase in the power rates irrigators were charged to run their pumps beginning in 2006. Many local Project and Off-project irrigators told me that this massive cost increase in only one year would drive them out of business.

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Dec 10, 2011 — by: Senator Whitsett

From Senator Whitsett’s Friday, December 9, 2011 Newsletter

At first blush the recent Bureau of Labor Statistics unemployment report is encouraging.

The report shows that our national economy created more than 120,000 net new jobs in the last month. It also reveals that an average of more than 100,000 net new jobs have been created in each of the past three months. Most of the new hiring is being done by small businesses that traditionally create three out of every four new jobs.

The report alleges the national unemployment rate to be at 8.6 percent. This is down four tenths of one percent in only the last month. These labor trends are certainly welcome.

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Nov 21, 2011 — by: Senator Whitsett

From Senator Whitsett’s Friday, November 19, 2011 Newsletter

Last May the Oregon state economist predicted that a great deal more General Fund and Lottery Fund revenue would be available to spend during this budget period than has materialized. Many of us believed, and publicly stated, that the economist’s estimates were too high. We based our concerns on persistent high unemployment, low business profits and Oregon’s current dismal business environment. Never the less, the inflated tax and lottery predicted-income was considered to be actual-income. Most of that estimated revenue was scheduled to be spent during the current two year budget period.

Thankfully, more conservative legislators were able to prevail in our attempt to set aside a meaningful reserve. We established a contingency ending balance fund of about $460 million in unbudgeted money. Many of us were very publicly maligned for that effort. House Ways and Means Co-Chair Dennis Richardson took the brunt of the abuse offered mainly by representatives of public employee unions.

The November financial forecast released last Thursday reported yet another hundred million dollar reduction in the economist’s inflated projections for state General Fund and Lottery Revenue. The combined September and November quarterly forecasted revenue reductions total $306 million. Two thirds of the $460 million cushion has already disappeared during only the first four and one half months of the twenty four month budget period.

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Nov 13, 2011 — by: Senator Whitsett

Government created barriers to private sector business growth and job creation are a major cause of the current prolonged recession. One of the more significant barriers to free market entrepreneurs is the estate tax. It is often referred to as the death tax because, after exempting a certain dollar value for each estate, the tax is levied on the remaining accumulated value of a person’s holdings at the time of their death. According to the Congressional Joint Economic Committee, death taxes are the primary reason why small businesses fail to survive beyond one generation.

The first federal estate tax was imposed to help pay the costs of the Civil War. Over nearly a century and a half, the death tax has been repealed and reinstated several times. It reached the highest marginal rate of 60 percent in 2001. That year, Congress passed the Economic Growth and Tax Relief Reconciliation Act that gradually phased out the estate tax to zero in 2010. However, that law was structured so that if it was not reauthorized by Congress, the tax would return to 55 percent in 2011. A congressional compromise with the Obama administration reestablished the marginal rate of the death tax at 35 percent for 2011 and 2012. It is our understanding that without further action, that marginal rate will automatically revert back to the 55 percent rate in 2013 and the federal exemption will be lowered to one million dollars.

Oregon is one of only twenty two states that levies an additional death tax. The current combined state and federal estate tax for Oregonians is the sixth highest in the nation standing at 45.4 percent. That combined marginal rate is scheduled to escalate to nearly two thirds of the taxable estate value in 2013. Death taxes are generally due and payable within nine months of the death of the estate owner. Penalties of up to 25 percent, plus annual interest payments, are added to the tax bill
in the event that the heirs are unable to timely pay the draconian tax.

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Oct 30, 2011 — by: Senator Whitsett

From Senator Whitsett’s Friday, October 28, 2011 Newsletter

Last spring Senator Betsy Johnson and I were approached by several organizational camp owners seeking relief from what they described as oppressive and even capricious administrative rules being enforced by the Oregon Health Authority (OHA). The OHA is an agency with a multibillion dollar annual budget whose regulatory tentacles reach into nearly every aspect of our daily lives. Moreover, the camp owners told us that at that time OHA was in the process of drafting some thirty four pages of amended rules that would make compliance even more difficult and expensive.

An organizational camp is defined in Oregon administrative law as any facility operated for recreational use by groups or organizations. They include youth camps, scout camps, summer camps, day camps, nature camps, science camps, athletic camps, survival camps, and camps run by religious, private and public educational and community service organizations. Oregon has one hundred forty seven organizational camps licensed and regulated by the OHA. About twenty of those camps directly serve the citizens in our Senate District 28.

In response to the camp organizers’ concerns, Senator Johnson and I reviewed the current and proposed draft rules in question. We then met with Oregon Health Authority employees in my Senate office to discuss the scope and content of the rules. Following that in depth conversation, the OHA staff decided both to discontinue the implementation of the draft rules as well as to review the appropriateness and applicability of the current rules. They agreed to seek out and listen to the concerns of the camp owners and managers.

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