• May 09, 2019 5:27 PM | Connie Shipley (Administrator)

    Now is the time to act on HB 3427

    This is a critical time for this NEW $2.8 billion business sales tax, which would levy a gross receipts tax on all Oregon businesses with at least $1 million in sales. 

    If this bill passes, local businesses and consumers will be subject to pyramiding of taxes up and down the supply chain and increased costs that are certain to hurt small business and stifle Oregon’s economy.

    With our Action Alert on Tuesday, we were able to send 100 messages to key Senators. If you have not sent in your testimony to your elected Senator, now is the time. 

    Please tell your Senator that HB 3427 hurts small business and does nothing to ensure that Oregon's PERS costs will now swallow up the entire tax increase within a few short years. 

    Click the link below to log in and send your message:
    https://www.votervoice.net/BroadcastLinks/Tv-AyIDYK2j_M6jOknQznw


  • May 08, 2019 3:49 PM | Connie Shipley (Administrator)

    ACTION ALERT

    HB 3427-A is the wrong approach for Oregon


    HB 3427-A would levy a $2.8 billion gross receipts tax on all Oregon businesses with at least $1 million in sales. This is NEW revenue to fund proposed education priorities. The goal is laudable but the mechanism is not.  A gross receipts tax, as proposed in HB 3427, is one of the most regressive taxing mechanisms.  If this bill passes, local businesses and consumers will be subject to pyramiding of taxes up and down the supply chain and increased costs that are certain to stifle Oregon’s economy.
     
    Enough is enough!  The total cost of proposed taxes, programs and fees being considered by the 2019 Legislature is $5.67 billion over the next two years.  That is too great a burden on local Oregon businesses. 

    Click the link below to log in and send your message:
    https://www.votervoice.net/BroadcastLinks/DKlm_qeAjoOfUeU5KgydpA


  • May 08, 2019 3:48 PM | Connie Shipley (Administrator)


    -What's Happening (OSCC Political Observations)

    We think that things will start getting more interesting now that the major $2.8 billion business tax passed the House 37-21. Even though the tax bill was muscled through the House, there is still not yet a clear path to the goal.

    Because although legislative leadership appears to have made a deal with some business organizations that includes:

    1. HB 3427, the $2.8 billion gross receipts tax on businesses with $1 million or more in sales. The details of the tax are still in discussion.
       
    2. An undefined PERS reform proposal
    3. A paid family leave proposal that would require both employers and workers to pay new taxes
       
    4. The death of HB 2269, the employer health care tax

     

    ...there are still some serious unanswered questions that have real consequences. For instance:

    • What will Senator Betsy Johnson do? She's never been a supporter of higher taxes.
       
    • With only 12 members to account for, Senate Republicans clearly have a realistic ability to deny quorum and shut down Senate business. Will they?
       
    • What are the details of the deal struck between some business groups and legislative leadership? The devil is always in the details, and to our knowledge, there are no details on the issues that were agreed to. Negotiations have yet to occur on PERS or paid family leave, and yet business has already given up its leverage by going neutral on the major tax hike.
       
    • What happens if the unions oppose elements of the deal including the paid family leave program or PERS reform? Will Democrats be able to deliver the votes for these issues if their major benefactors oppose them?
       
    • And if Democrats cannot deliver the votes on these issues, will business groups have the standing to ask for Republican support after having just crossed them on the $2.8 billion gross receipts tax?
       
    • What about Cap & Trade? Cap & Trade was not addressed in the deal-making, and yet the dual impact of Cap & Trade with a gross receipts tax could be devastating to businesses.

    Like we said, it's starting to get interesting.

     

    Activity on Major Issues

    • The $2 billion Commercial Activity Tax (HB 3427) passed the House on a party line vote, 37-21. It is scheduled to hit the Senate floor on Tuesday, but Senate Republicans may force a delay. As it stands, HB 3427-A has the following components:

    -  A gross receipts tax rate of 0.57% on Oregon sales over $1 million;

    -  A 35% deduction from taxable sales for labor OR business inputs, whichever is higher;

    -  An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and

    -  An exemption for groceries (defined as those that qualify for 'SNAP').

    • Cap and Trade (HB 2020). The Joint Committee on Carbon Reduction will unveil yet another re-write of the Cap-and-Trade on Monday evening. OSCC and other business groups will quickly analyze the new version of the bill to understand potential impacts. The committee will meet again on Friday to further consider the re-write. OSCC will share analysis and impacts of the new version of the bill as soon as we are able to conclude our analysis.

     

    What happened last week?

    • Equal Pay Technical Fixes (SB 123A). SB 123 passed out of the Senate Rules Committee with an amendment to provide clarity to employers in implementing Oregon's Equal Pay Act.  OSCC joined other business organizations in supporting the amended bill.  Some technical amendments were not included in SB 123A, but Senators Kathleen Taylor (D-Portland) and Tim Knopp (R-Bend) put forward a letter, requesting that BOLI look at making other necessary fixes in rulemaking later this year.  We appreciate their work to help local businesses understand and implement the equal pay law. 
    • Prevailing wages in enterprise zones. HB 2408 requires prevailing wages on all private projects in Enterprise Zones in excess of $20 million. Such a policy erodes one of Oregon's last remaining economic development tools. The bill received a very robust public hearing last week in the Senate Workforce Committee in which there was very strong opposition. OSCC is actively opposing the legislation and lobbying it. We anticipate that the bill will need to be amended in order to pass the Senate. 
    • Workers' compensation compromise (HB 3022). OSCC initially testified against this legislation, which would have upended 30-years of successful workers' compensation reforms and drastically raised workers' comp costs on employers. However, the bill was deftly negotiated by SAIF so as to end up a compromise bill that won't impact employer rates. The House Rules committee passed negotiated version of the legislation last week, which eliminates a major threat to the business community.

      

    Other key issues coming up this week.

    • Diesel regulations (HB 2007). The House Rules Committee is expected to amend HB 2007 this week and pass it out to Joint Ways & Means for additional consideration. HB 2007 would phase out 2010 and older on-road diesel engines over a ten year period, including both public and private fleets. It also allocates the remaining Volkswagen Settlement dollars (approx. $55 million) to retrofit and replace older on-road medium- and heavy-duty trucks. We anticipate an amendment this week to narrow the scope of the bill before it moves out of committee. 
    • Lawsuit Damages (HB 2014). The Senate Judiciary Committee will hear this bill Monday. HB 2014 would repeal Oregon's legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers. We have been successful in killing this bill in the Senate for several session. We expect another major fight on this bill in the coming weeks.

     



  • April 29, 2019 4:06 PM | Connie Shipley (Administrator)

    Save Oregon’s Enterprise Zones!
    Oppose HB 2408A: Public Procurement Requirements on Private Projects

    Property tax abatements are among our best tools for growing local businesses, particularly in economically distressed areas. HB 2408A puts future investments in local economic development in jeopardy!  

    HB 2408A imposes public procurement requirements on projects within enterprise zones; specifically, the requirement to pay prevailing wages. Requiring prevailing wage rates on private construction projects offsets the very local economic development incentives provided by tax abatements. By eliminating this incentive, private investors may decide against industrial expansion or may choose a site outside of the state.

    This bill already passed the House, and we need your help to let your state Senator know that HB 2408A is bad for Oregon’s local business community. 

    A public hearing on the bill is scheduled for tomorrow morning at 8:00 am.

    Please write your Senator and/or show up tomorrow and tell policymakers that HB 2408A is the wrong policy for Oregon!

    Click the link below to log in and send your message:
    https://www.votervoice.net/BroadcastLinks/DcKJfkZK1r020ButjCfGfQ 


  • April 29, 2019 9:57 AM | Connie Shipley (Administrator)

    ACTION ALERT

    OSCC will be issuing an Action Alert for HB 2408 this week. This bill, which will require prevailing wages in privately-funded Enterprise Zone projects of $20 million or more, would be a strong hindrance to much needed economic development projects. Enterprise Zones are one of Oregon's last remaining viable economic development tools.


  • April 29, 2019 9:56 AM | Connie Shipley (Administrator)

    What's Happening (OSCC Political Observations)

    Negotiations are underway on what a "go home" package of legislation would be for legislative Democrats who hold strong majorities in the legislature.

    Legislative leadership appears to be signaling to the business community that they will pass:

    1. HB 3427, the $2 billion gross receipts tax on businesses with $1 million or more in sales. The details of the tax are still in discussion.
    2. An undefined PERS reform proposal.
    3. A paid family leave proposal that would require both employers and workers to pay new taxes.
    4. A buy down of PERS liabilities that would include about a $300 million contribution from SAIF.
    5. An amended version of Cap and Trade (HB 2020). 

    The one concession that leadership appears to be willing to make is to kill HB 2269, the employer health care tax. It is unclear at this point which policy bills will get wrapped up in the negotiation.

    Activity on Major Issues

    • The $2 billion Commercial Activity Tax (HB 3427) is now clearly the top priority of legislative leadership. Although there was a serious effort to pass the bill out of committee on Thursday evening, the bill ultimately did not move.

    Absent any real movement on negotiations with democrat leadership in the House and Senate, the bill is slated to move out of committee on Monday night.

    As it stands, HB 3427 has the following components:

    • A gross receipts tax rate of 0.49% on Oregon sales over $1 million;
    • A 25% deduction from taxable sales for labor OR business inputs, whichever is higher;
    • An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and
    • An exemption for groceries (defined as those that qualify for 'SNAP').
    • Cap-and-Trade (HB 2020). The Joint Committee on Carbon Reduction is scheduled to resume its work again this week with two meetings (Monday and Friday) to consider new amendments to HB 2020, the Cap-and-Trade bill. OSCC anticipates that amendments will be released Monday for consideration by the committee. We will keep you updated after we've had a chance to review changes in the amendments. The rumor is that there will be a serious attempt to pass HB 2020 out of committee right as early as next week (the week of May 6th).

    What happened last week?

    • Employer Health Care Tax (HB 2269A). Last Monday, OSCC joined Oregon Business & Industry, Oregon Farm Bureau, and the Northwest Grocers in testifying in opposition to HB 2269A. This bill would require employers with 50 or more employees (who work at least 8 hours a week) to provide a minimum payment towards the employees' health care or pay the state the difference. Although it's not being called a "tax", the Oregon Health Authority is projecting $0.50 per hour worked per employee and a total revenue generation of $500 million. 
    • Sexual Harassment (SB 726A). SB 726A passed out of the Senate with a 23-6 vote. Individual liability for owners, officers and executives (who knew or should have known about the alleged harassment) remains out of the bill, but there are still concerns about the ability of small businesses to maintain records and data for the new 5-year statute of limitations to file harassment claims. Under the bill, employers are prohibited from using non-disclosure agreements as a means to settle harassment claims. 
    • Pregnancy Accommodations (HB 2341A). HB 2341A moved out of the Senate Workforce Committee last week. As written, employers with 6+ employees must provide reasonable accommodations for pregnant employees, but any of those businesses may file an undue hardship exemption with BOLI. Easy final passage is expected on Senate floor. 
    • Expressing Milk in the Workplace (HB 2593A). Under HB 2593A, all employers must provide reasonable rest periods for an employee to express milk during a child's first 18 months. However, an employer with 10 or fewer employees may file an undue hardship exemption with BOLI. The next stop is the Senate floor for final passage. 

     

    Other key issues coming up this week.

    The upcoming week is going to be fairly quiet on key issues. There will be no additional hearings on Cap and Trade this week, but there will be consideration of the following: 

    • Prevailing wages in enterprise zones. HB 2408 requires prevailing wages on all private projects in Enterprise Zones in excess of $20 million. Such a policy erodes one of Oregon's last remaining economic development tools. The bill easily passed the House and is already up for a public hearing in the Senate Workforce Committee on Tuesday. OSCC will issue an Action Alert on this critical economic development issue. 
    • Workers' compensation compromise. (HB 3022) OSCC initially testified against this legislation, which would have upended 30-years of successful workers' compensation reforms and drastically raised workers' comp costs on employers. However, the bill was deftly negotiated by SAIF so as to end up a compromise bill that won't impact employer rates. The bill will see committee action in the House Rules Committee on Monday.


  • April 25, 2019 5:48 AM | Connie Shipley (Administrator)


    It is vitally critical that chambers respond to the Action Alert on HB 3427, the $2 billion gross receipts tax on Oregon businesses. We have very little ability to impact this debate unless Chambers show up!

    HB 3427 is the wrong approach for Oregon

    We’ve reached the mid-point of the 2019 Legislative Session with the clear theme of generating revenue.  You name it, there’s a tax for it.

    HB 3427 would generate $2 billion in NEW revenue to fund proposed education priorities. The goal is laudable but the mechanism is not.  A gross receipts tax, as proposed in HB 3427, is one of the most regressive taxing mechanisms.  If this bill passes, local businesses and consumers will be subject to pyramiding of taxes up and down the supply chain and increased costs that are certain to stifle Oregon’s economy.
     
    Enough is enough!  The total cost of proposed taxes, programs and fees being considered by the 2019 Legislature is $5.67 billion over the next two years.  That is too great a burden on local Oregon businesses.  

     
    Tell Oregon legislators that HB 3427 is the wrong approach for Oregon!

    Write you

  • April 25, 2019 5:47 AM | Connie Shipley (Administrator)

    What's Happening (OSCC Political Observations)

    From a business perspective, the 2019 session can be distilled into four primary categories:

    1. Revenue. As we've noted, there is currently over $5.67 billion in additional revenue proposals that are alive in the legislature. The crown jewel of the revenue proposals is HB 3427, the $2 billion gross receipts tax for K-12 and early education. OSCC is also very concerned about HB 2269, the sneaky $500 million health care tax on employers with 50+ employees. HB 2005, a $1+ billion tax to establish a new paid family leave program, is also alive in the legislature.
       
    2. Cap and Trade. OSCC has consistently opposed HB 2020 and is currently working with key legislators on changes to the bill that would offset the increase in costs on electricity and natural gas for local businesses. These efforts could prove successful. But at the same time, there appears to be very little legislative effort underway to reduce the major increases in gas taxes that would result from the bill. An initial 16-cent per gallon gas tax hike is projected from the legislation. HB 2020 also establishes a new bureaucracy, the Carbon Policy Office, which would have broad powers over the economy.
       
    3. SAIF raid / PERS reform / Cost containment. The response to the Governor's proposal to take $500 million from SAIF, take $500 million from the 'kicker,' and require active Tier 1 and Tier 2 public employees to contribute 3% of salary to their pension has hit with a thud. Republicans will not support taking the 'kicker,' unions won't support public employee contributions to the pension, and business is vehemently opposed to raiding SAIF.
       
    4. Ancillary business issues. OSCC continues to be concerned with the significant number of bills that would hurt business operations (SB 379, marijuana accommodations), hurt economic development (HB 2408, prevailing wages in enterprise zones), hurt existing programs (SB 595, diversion of transient room taxes to fund housing), create additional liabilities (SB 726, workplace harassment liability) and add additional business costs (HB 2014, eliminates $500k cap on non-economic damages in civil lawsuits). 

     

    Activity on Major Issues

    • The $2 billion Commercial Activity Tax (HB 3427) is now clearly the top priority of legislative leadership.

      The Thursday public hearing was a disaster for business as only OSCC and two agricultural groups showed up to testify against the gross receipts tax.

      HB 3427 has the following components:
      • A flat $250 tax on all business entities for sales under $1 million;
      • All business entities with sales over $500,000 must register with the state;
      • A gross receipts tax rate of 0.49% on Oregon sales over $1 million;
      • A 25% deduction from taxable sales for labor OR business inputs, whichever is higher;
      • An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and
      • An exemption for groceries (defined as those that qualify for 'SNAP').

        OSCC testified against the proposal because of its impacts on small and start-up businesses.
    • SAIF. There is ongoing negotiation between SAIF and the Governor's office about SAIF's potential contribution to the PERS unfunded liabilities. The Governor's office is looking for a $700 million contribution from SAIF while SAIF believes it can contribute somewhere in the neighborhood of $300 million over the next 7 years without impacting policyholder rates and dividends. OSCC continues to be opposed to a raid on SAIF to pay down PERS liabilities.      

     

    What happened last week?

    • Prevailing wages in enterprise zones. OSCC was disappointed to see that HB 2408 passed the House floor so easily. The bill required prevailing wages on all private projects in Enterprise Zones in excess of $20 million. Such a policy erodes one of Oregon's last remaining economic development tools. OSCC will fight the bill much harder on the Senate side.

     

    Other Key Issues Coming up This Week

    The upcoming week is going to be fairly quiet on key issues. There will be no additional hearings on Cap and Trade this week, but there will be consideration of the following:

    • HB 2269 health care tax.  OSCC strongly objects to this legislation which will give the Department of Consumer and Business Services (DCBS) a blank check to determine how much each business 'should' be spending on health care for its employees and then tax each business that does not spend as much on health care as DCBS believes it should. The bill will be engineered to raise $500 million per biennium. To make matters worse, Legislative Counsel has determined that because the bill simply allows an agency to construct and levy the tax, it does not require the 3/5th supermajority to pass the legislature.
    • HB 3022 workers' compensation compromise. OSCC initially testified against this legislation, which would have upended 30-years of successful workers' compensation reforms and drastically raised workers' comp costs on employers. However, the bill was deftly negotiated by SAIF so as to end up a compromise bill that won't impact employer rates. OSCC continues to monitor to ensure that the terms of the compromise are honored.


  • April 24, 2019 2:36 PM | Debbie Utberg (Administrator)

    Stop the Raid on SAIF

    Governor Kate Brown recently proposed raiding SAIF, Oregon’s leading workers’ compensation insurance carrier of nearly $500 million to cover unfunded liabilities within our state’s Public Employee Retirement System (PERS). 
     
    Small businesses, school districts, and local governments depend on SAIF’s affordable rates and safety programs to ensure a safe and healthy workplace.  Raiding SAIF’s reserves could damage what’s been a very successful model for Oregon employers and injured workers.  In a recent editorial, The Oregonian newspaper cautioned against the raid stating it, “risks destabilizing an entity that has competently, reliably and efficiently administered workers’ compensation for public and private employers for years.”  We agree!
     
    Raiding their reserves increases the likelihood of rate increases and fewer resources for accident prevention and workplace training programs.
     
    While PERS faces a $26 billion deficit, there is no tie or correlation between their unfunded liability and the premiums that Oregon employers pay to SAIF.  Should it ever be determined that SAIF does have excess reserves those funds should be returned to policyholders and not grabbed by politicians for unrelated matters. 

    Click the link below to log in and send your message:
    https://www.votervoice.net/BroadcastLinks/CpBUntByQaJOpD_hFU-5kQ


  • April 20, 2019 2:33 PM | Connie Shipley (Administrator)

    It is our analysis that a $2 billion schools tax will pass.  At this time, it is prudent for OSCC to analyze its options as we have no ability to stop this tax increase.

    OSCC's current position is in opposition to HB 3427, the $2 billion gross receipts tax.  Our opposition, while appreciated and meaningful to our members and allies in the legislature, renders us unable to affect any outcomes in a very adverse legislative session.  Our opposition is also only a small impediment to ultimate passage of the tax. 

    It may be prudent at this time to signal a willingness to support $2 billion in taxes if certain conditions are met.  It is acknowledged that signaling a willingness to support $2 billion in taxes is both out of character for OSCC and carries some risk.  However, there is also a risk to not adapting to our political surroundings - namely, forgoing any chance to protect small business from the proposed tax, advocating for increased funding for community colleges, and being better leveraged to defeat additional bad bills that will impose major additional costs on our members.

    Below is the analysis stemming from yesterday's OSCC Government Affairs call:

    Context: OSCC currently opposes HB 3427, the $2 billion gross receipts tax on business. However, it is our analysis that the $2 billion tax for Oregon schools will pass. There’s 18 votes in the Senate and at least 36 in the House. There will be a $2 billion tax that passes the legislature. The overall package is currently being negotiated, but leadership wants to “fast track” the issue. The question is whether OSCC would be willing to support $2 billion for schools if certain conditions are met. __________________________________________________________________________________ OSCC Decision Options: (1) Continue to oppose HB 3427 and $2 billion tax. (2) Indicate support for $2 billion in additional taxes if certain conditions met. __________________________________________________________________________________ ‘Opposition’ upside: Our members expect us to stand with them on issues that affect their ability to be profitable. Maintain ability to join coalition to refer measure to Oregon voters. ‘Opposition’ downside: We are steamrolled with a 0.49% gross receipts tax that hurts small businesses down to $1 million in sales. No ability to kill additional bad legislation. No seat at table. ‘Support’ upside: Seat at table. Can potentially shape the tax to protect small business. Can potentially shape how money is spent. Can potentially kill other threatening bills that would impose additional burdens on our members. ‘Support’ downside: Our ability to shape the tax, the expenditures, and kill other threatening bills may not meet expectations. Our members will have difficulty with supporting a tax increase. We lose leverage to refer the measure to voters. __________________________________________________________________________________ Possible OSCC conditions: 1. No gross receipts 2. Protect small & start up business 3. Cost containment of $1 billion 4. Community colleges must receive priority funding 5. Other damaging bills must die – HB 2020, HB 2269, HB 2408

    If you want to make your opinion known, contact Mary Ann Gray, who is East Portland's representative on the OSCC Government Affairs Committee at MaryAnn@westsidesec.com. 

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