House Approves Rainy-Day Fund

It's on, it's off, it's on: yesterday, House Democrats managed to pass legislation that would funnel $290 million in  '07-'09 corporate kicker payouts into a state savings account. 

The move came after House Republicans refused to support a wider deal inked last week by their leaders that included lower estate taxes and higher corporate taxes.

House Democrats agreed to drop those two provisions, giving up $85 million in added revenue for the 2007-09 budget, to secure the needed two-thirds majority to withhold corporate kicker rebates.

In order to pass, the legislation needed 40 votes, but ended up receiving overwhelming support of all but nine Republicans.  The compromise marked the third chapter in a strange drama: a week ago, Republicans appeared to kill the deal, only to announce a day later that it had their support.  Later, however, GOP leaders admitted they didn't have the votes.  In the final iteration, Democrats agreed to preserve $25 million in kicker refunds to companies selling less than $5 million this year. 

Rep. David Edwards said the plan would end the cycle of "boom and bust" that characterize Oregon's unstable funding stream:

No longer will the fate of our economic stability rest largely on speculation and chance. No longer, in periods of recession, will the system continue will our most vulnerable citizens—children, the elderly and infirm, the working poor—suffer because of drastic cuts to essential public services when times are tough.

Senate Republicans, led by Minority Leader Ted Ferrioli, staged a theatrical walkout on Thursday, hoping to force the inclusion of an estate tax cut into the bill.  Democrats, who need only one Republican vote, are confident the Senate will support their version.  If not, they are prepared to put it on the May ballot. 

Discuss.