Your monthly round-up of news, policy updates and more from the OBI team. |
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Survey Shows Number of Businesses are Considering Leaving Oregon Due to Taxes |
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Due to recently passed new taxes and increases of existing taxes, at both the state and local levels, a stunning number of Oregon businesses are now giving serious consideration to leaving Oregon, according to findings from a survey of nearly 500 business CPAs and local chamber of commerce leaders.
The survey, conducted in the spring and summer of 2021, shows the roster of new local and statewide taxes imposed in Oregon over the last three years has created a negative perception of the cumulative impact of these taxes on business owners and employers. As a result, most report that they have clients or members who are considering leaving the Portland region – or the state altogether, while others are considering pulling back on future Oregon investments, including restricting new hiring. Read the full report here.
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OBI is closely tracking news that broke earlier this month around the proposed list of new taxes and tax increases that look to be part of House Democrats’ $3.5 trillion omnibus reconciliation budget plan. Unfortunately, the taxes being proposed would be detrimental to Oregon businesses, to say the least. A few of the new federal taxes being floated include an increase in the top corporate tax rate, to 26.5% from the current 21%. This is a 26% increase and would result in a nearly $1 trillion corporate tax increase. The plan would also change the current flat corporate rate to a graduated rate structure based on taxable income. The full 26.5% rate would apply to taxable income above $5 million.
The proposal would also raise taxes on small businesses that are structured as pass-through entities (PTEs), like partnerships and S-corps. Taxes would rise for these businesses through 1) a new cap on eligible deductions; 2) an increase in the top individual tax rate, that many PTEs pay, to 39.6% compared to the current 37% top rate; and 3) a new 3.8% surtax on PTE income.
Passage of these taxes would be bad for businesses in Oregon and across the country. The increased cost of these taxes will translate to reduced hiring, higher consumer costs, reduced owner and shareholder value, and a significant step backward for America’s global competitiveness. Read more about the plan here.
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Department of Environmental Quality's Climate Protection Program |
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The regulatory framework for the Oregon Department of Environmental Quality’s (DEQ) Climate Protection Program to reduce greenhouse gas emissions was issued in early August and is open for public comment until October 4. OBI has been evaluating the proposed regulation and will be providing comments. We’re concerned with the cost of the program, with the adequacy of compliance pathways for regulated entities, and that the proposal hurts Oregon companies, particularly manufacturers, that compete in national and international markets.
Most frustrating is that this large and complex new regulation is being rushed without transparency and a close examination of DEQ’s data. Delays from other agencies providing input to the rulemaking and concerns with poor public process are also contributing to our worry that a flawed policy could be implemented in the interest of sticking to DEQ’s arbitrary timeline.
On Tuesday, 26 organizations including OBI, requested a 21-day extension of the public comment period and additional public hearings to ensure that stakeholders have the information and time needed to understand the impacts of the proposal and make our voices heard before the climate program is adopted.
At this time, public hearings are scheduled for Sept. 22 and Sept. 30 at 4 p.m. More information on the proposal and process are available here.
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Paid Family Leave Releases First Round of Rules |
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The Paid Family and Medical Leave Insurance (PFMLI) division has released the first round of rules for the new program. The law, passed in 2019, provides up to 12 weeks of paid leave insurance benefits to employees, funded through a 1% payroll tax – 60% paid by employees and 40% paid by employers. Contributions to the payroll tax will begin on Jan. 1, 2023 and employees will be eligible to claim benefits on Sept. 15, 2023. This batch of rules relate to wages, contributions, employer size, employer assistance grants, equivalent plans, self-employed individuals and public outreach plans. A rulemaking advisory committee will meet on Sept. 29 at 9 a.m. and the public can comment at 11:30am. You can register here. There will be additional future opportunities to comment if you are unable to participate in this meeting.
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On Monday legislators met for a Special Session to adopt new maps to reflect the changes from the 2020 census. The Senate passed the Democrat proposal for new congressional and legislative political maps, sending them over to the House to be voted on. After Speaker Kotek walked back on an agreement with House Republicans for an evenly split Redistricting Committee, the newly formed committees approved the congressional map without any Republicans present and approved the legislative map over Republican leadership objections. The House was scheduled to convene Tuesday afternoon until it was announced someone who was in the building on Monday tested positive for COVID-19. They are scheduled to reconvene Saturday morning for a potential vote. Currently, it is uncertain whether House Republicans will be present for that vote.
Constitutionally the Oregon Legislature has until Sept. 27 to pass new maps. If they fail to do so, the job of redrawing legislative maps will move to Secretary of State Shemia Fagan and a five-judge panel appointed by the chief justice of the Oregon Supreme Court will draw the congressional maps.
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Applicants Needed for Cost Growth Target Advisory Committee |
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The Oregon Health Authority and Oregon Health Policy Board are seeking members for the Cost Growth Target (CGT) Advisory Committee, the new governance committee for the Sustainable Health Care Cost Growth Target Program beginning in 2022.
The goal is to build upon work done by the Cost Growth Target Implementation Committee (2019-2021) to advise and support the Oregon Health Policy Board, Oregon Health Authority, and Oregon Department of Consumer and Business Services. The new Advisory Committee is tasked with overseeing the ongoing program implementation, reviewing the cost growth target value for 2026-2030, reviewing trends and health care cost drivers, monitoring negative impacts of the CGT, exploring opportunities to improve equity, and reviewing the progress toward value-based payment goals. The Committee will meet bi-monthly for approximately three hours and members will serve two-year terms.
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Now Taking Nominations for the OBI Board |
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OBI is seeking your input on applicants to join the OBI Board of Directors. If there is someone (yourself or otherwise) you’d like to nominate please, send their name and resume to Angela Wilhelms. Duties of the board of directors include attending bimonthly meetings and providing legislative and organizational guidance for staff.
Have you joined an OBI Committee? The committees identify hot button issues to advocate on behalf of a strong and healthy business climate for Oregon. Our issue areas include Education & Workforce Development, Health Care, Tax & Fiscal Policy, Employment, Energy & Environment, Retail and Transportation. Reach out to Morgan Beltz for more information or to join a committee today.
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Celebrate Oregon Manufacturers with OBI on Oct. 1! |
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Join OBI for our annual celebration of Oregon’s thriving manufacturing sector and the critical role these businesses play in supporting our economy and way of life. On Oct. 1, organizations and businesses across the country will mark the occasion with events and acknowledgements in coordination with our partners at the National Association of Manufacturers.
With the success of last year’s virtual event, we’re continuing with the online format and will take attendees on a tour of different manufacturers throughout the state and host a panel of community leaders to discuss the importance of supporting this industry. We’ll dive into the various challenges facing these businesses in Oregon, the role public policy plays in solutions, and highlight some of the extraordinary contributions and accomplishments OBI manufacturing members have made throughout the past year as the state recovers from the pandemic.
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THANK YOU TO OUR SPONSORS |
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Oregon Business & Industry
1149 Court Street NE
Salem, OR 97301
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