Black-owned businesses and out-of-work Oregonians still awaiting unemployment payments are among those who will benefit from a new round of state spending to address the COVID-19 pandemic.
In a hearing Tuesday, the Legislature’s Emergency Board earmarked more than $200 million in federal relief money for those and a range of other priorities, the latest push as lawmakers work to urgently address an ever-growing host of needs created by the coronavirus.
At the same time, some lawmakers voiced concerns about whether the state is doing due diligence as it rushes to salve economic wounds around the state. An opinion from the Legislature’s own attorneys suggests one pot of money created Tuesday “would almost certainly be unconstitutional” as things stand now.
Funding priorities approved Tuesday include:
- $62 million to create a grant fund for Black businesses, nonprofit organizations and individuals or families. That fund will be administered by The Contingent, a Portland-based nonprofit. As conceived, it will disburse grants of up to $3,000 for families, and up to $100,000 for Black-run businesses.
- $50 million to aid cultural institutions around the state. That includes large payments to several of Oregon's biggest arts organizations, and seven months' worth of operating expenses for dozens of theaters and other venues.
- $35 million for emergency relief checks that would be paid out to people waiting for their unemployment payments to be approved by the state. Some Oregonians have waited months for their applications to clear the system, creating severe economic distress. The fund would pay $500 per person, but faces uncertainties in how it will actually work — and how quickly it will provide relief.
- $30 million to pay workers who need to quarantine due to the virus, but who don't have access to paid leave, worker's compensation or unemployment payments in order to do so. The fund would pay qualifying workers $120 for each day they are forced to miss work, but only would apply to individuals who make less than $60,000 a year (or $120,000 for an entire household).
- $25.6 million in stepped-up grants to small businesses.
While nearly all of those priorities passed by a large margin, Tuesday’s meeting was at times fraught, with lawmakers voicing concern that the Legislature was acting too hastily.
“So many of the mechanical details, the operational details, are either obscured or not developed,” said state Sen. Betsy Johnson, D-Scappoose, always a voice of caution on the committee. “Some of these e-board actions are getting increasingly uncomfortable for many of us.”
But the most intense debate concerned the specifics of several proposals.
Some Republican lawmakers raised objections to the proposed "Oregon Cares Fund" for Black families and businesses, arguing that a fund sending money to a specific racial group could be unconstitutional. They pointed to a July 13 opinion from the Office of Legislative Counsel that suggested the fund could violate Constitutional protections mandating equal protection under the law, unless the state specifically put forth detailed evidence of past discrimination against Black families and businesses.
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“We are not aware of any evidentiary findings by the legislature or the Emergency Board in support of the … grant program at issue here,” the opinion said. “Without any such findings, the program would almost certainly be unconstitutional under the Fourteenth Amendment.”
Sens. Lynn Findley, R-Vale, and Fred Girod, R-Lyons, urged a no vote, suggesting that Oregon would have to pay back any federal funds that were spent illegally. Both said the fund should be expanded to include Native Americans, Latino residents and other people of color.
Girod appeared to alarm some lawmakers on the board when he suggested that Native Americans had suffered more than other minority groups at the hands of historical and institutional oppression, and thus deserved the money just as much as Black Oregonians.
He added: “Most of the Black population is in Portland. If you look at it from a dollar perspective, this is just another dollar grab for Portland.”
Senate President Peter Courtney, D-Salem, immediately cautioned against such remarks. And lawmakers in both parties spoke in favor of the fund.
“When white folks sneeze, Black folks get pneumonia,” said Sen. Lew Frederick, D-Portland. “The Black community has been sickened by this virus disproportionately. Housing, education [and] transportation disparities are now as clear as they can be in this emergency. We must do something now.”
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Meanwhile, House Speaker Tina Kotek, D-Portland, downplayed the internal legal opinion. A separate analysis submitted by the law firm Schwabe, Williamson & Wyatt suggests that the fund might survive a challenge.
"Although the Oregon Cares Fund would constitute a race-conscious program and, should it be challenged, litigation always poses risks, the State will have persuasive arguments," the memo said, before laying out a history of racial discrimination against Black Oregonians.
“Saying it ‘could be’ unconstitutional does not make it unconstitutional,” Kotek said. “I don’t think we want to make the argument that if we are not in this meeting today serving all vulnerable communities that we shouldn’t do it.”
More questions surround the $500 checks Kotek and Courtney have proposed giving to Oregonians stuck waiting weeks or months for unemployment payments.
Lawmakers, who have been inundated with outrage and panic from constituents who are stuck waiting for payments, widely supported that proposal. But there is not currently any certainty about how people will apply for the money, who should qualify, how checks will be distributed and how to best prevent fraud.
Kotek said last week that the state’s Department of Administrative Services should run the program, but now believes that the agency should work with financial institutions who could more readily pay out qualifying workers.
Even with that approach, however, it could be a while before the state can offer assistance. In written remarks submitted Tuesday, DAS director Katy Coba laid out a litany of steps the agency would have to take to create such a system, concluding that "ultimately getting checks into the hands of Oregon workers will take at least six weeks if not longer."
Kotek and Courtney both appeared optimistic they can find a way to move more quickly.
“We need this vote to say, ‘We’re going,’” Courtney said. “We don’t have all the details. I fully admit that.”
Gov. Kate Brown’s office would not say last week whether the governor supports the idea, saying the office was “looking into the feasibility of the proposal.”
By Tuesday, Brown's office appeared to have warmed to the idea somewhat. "We look forward to working with financial institutions to work to implement this proposal," spokesman Charles Boyle said.
Lawmakers also debated the $50 million fund meant to rescue cultural institutions around that state. More than half the money will be doled out to county coalitions that will identify local needs. But most questions surrounded roughly $23 million that is earmarked in direct grants to venues around the state.
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The largest single disbursement, $4.71 million, will go to the Oregon Shakespeare Festival, which was forced to cancel much of its 2020 season because of the pandemic. The organization has already secured more than $7 million between federal loans and fundraising, but said Tuesday it has a long way to go in order to ensure it can re-open in the future.
“Our failure would essentially fail the region,” spokesperson C.J. Martinez told OPB. “It’s really about having to save Ashland and having to save Southern Oregon moving forward.”
Other organizations receiving large infusions of money include the Oregon Symphony and Metro, the Portland-area’s regional government. Much debate, however, concerned dozens of venues throughout the state that will receive seven months’ worth of operating expenses as part of the new fund.
According to the Legislative Fiscal Office, venues were able to self-report their own expenses to arrive at those payments, which range from $7,000 to more than $500,000. Johnson called such a system “dangerous.”
“We are pushing out an enormous amount of money,” she said. “It is incumbent upon us to have a modicum of scrutiny.”
But Kotek pushed back, suggesting Johnson might cause the public to believe that “something nefarious is going on here.”
“They were asked what they needed,” she said. “They can verify they need this and we are trying to keep them alive and kicking.”