Sweet Home residents attending a town hall meeting with state Rep. Jeff Kropf told him they wanted to see the state meet its obligation to pay off federal retirees, who recently won a lawsuit against the State of Oregon; but they didn’t want the state government to use kicker money to do it.
Rep. Kropf held the meeting at the Jim Riggs Community Center Thursday night.
“I just want to tell you briefly about a few things happening, then I want to hear from you what’s on your mind,” Rep. Kropf said. Among them, Rep. Kropf explained how federal retirees recently won a $110 million settlement in a lawsuit against the State of Oregon. Legislators are planning ways to cover that cost during the upcoming biennium.
“Right now, the governor has proposed to us that he’d like to pay off the federal employees and use part of the kicker,” Rep. Kropf said. The kicker is estimated at $336.7 million. The kicker refers to money returned to taxpayers when tax revenues are 2 percent or more above the state’s projections.
State agencies are requesting budgets that exceed, some considerably, inflation. Among those, Rep. Kropf said he voted against a Justice Department budget that would have increased by 85 percent. The previous day he voted against four agency budgets that would increase between 9 and 17 percent. Those four budgets were approved by the House of Representatives.
“We don’t have that kind of money, and we’ve got to get serious about the budget,” Rep. Kropf said, especially when the economy is not as strong as it has been. The state’s looking at cutting budgets. “We normally don’t cut. We just slow the growth.”
Rep. Kropf suggested starting with the salaries of elected officials. His own salary as a representative is 1,283 per month.
“We’ve got to lead by example and leadership,” Rep. Kropf said.
By using the settlement, Gov. John Kitzhaber proposes to reduce revenues below the 2 percent threshold, which would eliminate the kicker payment to taxpayers, Rep. Kropf said. The Legislature could pass a bill to send out the kicker even below the 2 percent threshold.
Rep. Kropf asked those present at the meeting, about 20 persons, whether that money should be used to cover the cost of the settlement or whether the Legislature should find the money elsewhere in the budget.
A half dozen persons responded that part of the kicker should be used to pay the settlement. Most of the rest present said the kicker should not be touched. One person thought the State of Oregon should hang onto all of the kicker.
Electricity
In other areas, Rep. Kropf said that the days of cheap power are over no matter what happens with deregulation.
On Oct. 1, Bonneville Power Administration will raise its rates, a minimum of 100 percent, Rep. Kropf said. That increase could be as high as 200 to 300 percent.
The impact will affect those who most rely on the BPA for purchasing power, Rep. Kropf. Pacific Power produces 80 percent of its electricity, but companies like Consumer Power buy from the BPA, and the rate increase will affect its customers more sharply. With those companies, a 100 percent BPA increase would increase retail bills by about 60 percent.
“All of that’s going to happen whether Oregon deregulates or not,” Rep. Kropf said.
Rep. Kropf said Oregon’s deregulation is nothing like California’s, which is blamed for an energy shortage causing “rolling blackouts” throughout certain areas of the state over the winter.
The problem is a lack of supply, Rep. Kropf said. A city the size of Salem uses 250 megawatts. In the last 10 years, California’s demand for electricity has increased by 10,000 megawatts. Its supply has only increased by 600 megawatts. Washington’s construction of new power supply also has lagged behind its increasing demand.
“All of the sudden, they do this stupid deregulation down there,” Rep. Kropf said emphasizing the word “stupid.” That was followed by a cold winter, and power companies had to buy electricity from the spot market. Prices, which had been $50 to $60 per kilowatt-hour ranged as high as $500.
“They’ve got to conserve big time in California,” Rep. Kropf said. “But they’ve also got to build new power plants.”
In Oregon, thins are better, Rep. Kropf said. The state is bringing on 750 megawatts of production, using natural gas, this year. Another 750 megawatts is planned in 2002, and produces have just applied for permits to build 2,000 megawatts of production.
Rep. Kropf supported and voted for Oregon’s deregulation, but in light of the current energy situation, he is in favor of delaying Oregon’s deregulation, scheduled for Oct. 1.
Comments among those present at the meeting tended to oppose deregulation or favored delaying it.
The argument for deregulating an industry is to provide lower prices, better service and more options, Rep. Kropf said. “Right now, you’re not going to get any of that.… Keep in mind that if we do deregulate or not, prices are going up.”
Like those at the meeting, Rep. Kropf is concerned that Oregon’s additional supply will be shipped south and north to Washington for higher prices, leaving Oregon with a smaller supply and higher prices as well.
In the short term, it appears deregulation in Oregon may make the problems worse, Rep. Kropf said. That is why he is in favor of holding off deregulation. The Legislature is considering a bill to postpone deregulation another two years.
“The problem is, with regulation, how do you give people an incentive to produce more power,” Rep. Kropf said.
Police Academy
Rep. Kropf reported that the race for siting a new Department of Public Safety Standards and Training academy is close.
“I think Sweet Home has a 50-50 shot of getting this at this location,” Rep. Kropf said. “It’s now Scappoose and Sweet Home are neck and neck.”
Local economic development activists have been pursuing the opportunity to get the state to site the proposed facility in Sweet Home.
“Having a training center like that is good money for your community,” Rep. Kropf said, although there may be some concerns about noise. “It’s clean money, and think about it, it’s the ultimate neighborhood watch program.”
The state needs to hear from Sweet Home’s City Council, Sweet Home Economic Development Group, the Ambassadors, the Chamber of Commerce and the citizens about siting the facility, Rep. Kropf said.
“We are turning up the pressure up there,” Rep. Kropf said. “There are, I think, really two sites being considered.”
Two other sites, Monmouth and Salem, are increasingly unlikely, Rep. Kropf said. DPSST ran into some opposition from Monmouth residents, and Salem is not really interested in siting more government facilities.
Rep. Kropf said his part in this is to work behind the scenes.
“I have to figure out a way to trade, try to find a way to get somebody something they need so you can get what you want,” Rep. Kropf said. This is something that Sen. Mae Yih is good at with her experience in the Senate.