The Oregon Biz Report - Business News from Oregon

Arkansas newspaper next to jeer at Oregon tax vote

By Oregon Small Business Association;

From the Arkansas Democrat Newspaper
“Take the Oregon Trail

THE GOOD news from Oregon is that its voters have just done their best to boost the economic fortunes of all the rest of us out here in the good old, investment-hungry U. S. of A. We’d like to think the good voters of that state were moved by nothing more than generosity of spirit when they adjusted their tax rates in order to make their state a happy hunting ground for other states’ economic development people. But we suspect it was political correctness in action, or maybe just plain economic illiteracy. It’s not always easy to tell the difference between the two.

For whatever reason, Oregon has just raised its taxes, and how, on that state’s employers, investors and rich folks in general. You know, the people who employ the rest of us, who invest in things like power plants and wind turbines and widget factories. They’re about to get hit hard by Oregon’s new tax structure.

IRS crackdown: Employee reimbursements, gift cards, vacations

IRS Begins Employment Tax/Fringe Benefit Plan Audit Focus
Barran Liebman LLP
Oregon Law Firm,

Each year, March signals the start of Spring and Daylight Savings Time. This year, however, March brings the start of yet another important landmark: the Internal Revenue Service’s long-foreshadowed employment tax audit program, known officially as the Payroll Tax Audit Initiative. The Initiative will randomly select employers for audits of their compliance with employment tax laws, with a focus on:

• Fringe Benefits
• Employee Reimbursements
• Executive Compensation Reasonableness
• Classification of workers as Employees or Independent

Oregon State Treasurer dies of cancer

Oregon State Treasurer Ben Westlund dies of cancer
State Treasurer Press Release,

SALEM — In life, there are those who take the road less followed. Oregon State Treasurer Ben Westlund’s was miles past where the pavement ends. His path took him from Apple Valley, Calif; to the shores of Lake Oswego; to the painted hills of Eastern Oregon; to rural Deschutes County; and then to the statehouse, where he served as a legislator and as Treasurer. In Central Oregon and then the Capitol, where Westlund spent much of the past 13 years since being first elected in 1996, he was known for his easygoing wit and his signature sign off: “Down the trail.”

Complete Review of 2010 Special Session

By Associated Oregon Industries,

1. Employment and General Business 2010 Session Report
2. Fiscal Policy & Tax Issues
3. Health Care 2010 Session Report
4. Retail 2010 Session Report
5. Employment and Fiscal Policy
6. Environment & Energy 2010 Session Report

1. Employment and General Business 2010 Session Report
Article by: J.L. Wilson - February 26, 2010

SB 1045. Senator Diane Rosenbaum (D-Portland). Employer Credit Checks.

As introduced, the bill would effectively prohibit employers from running credit checks on employees for employment related purposes and create new Unlawful Employment Actions against employers who took adverse employment actions based on credit reports.

Actions: AOI strongly opposed bill. AOI worked this issue in order to gain language that allows employers to continue to use credit checks, so long as those checks are substantially job-related.

Where Oregon payroll is dropping most

From Chris Greaves
Oregon Employment Department,

Oregon’s Payroll Employment

Information: -5.4%
Other services: -3.5%
Professional business services: -1.6%
Leisure  hospitality: -1.5%
Manufacturing: -0.9%
Retail trade: -0.9%
Educational & Health services: -1.2%

Oregon Unemployment Rate Peak Shaved to 11.6 Percent in 2009
Revised data for 2009 and prior show that Oregon’s unemployment rate reached a recent high of 11.6 percent in May and June 2009, lower than the originally published high of 12.2 percent in May 2009. Due to the sample size of the household survey that is one of the primary inputs to Oregon’s unemployment rate calculation, the difference between these two levels is not statistically significant, but the change does mean that the highest unemployment rate of this current recession (to date) is now lower than the highest rate of the recession of the early 1980s (12.1 percent).

Survey: Young boss vexes youth more than older peers

More Than Four-in-Ten Workers Over the Age of 35 Currently Work for a Younger Boss, Finds New
By CareerBuilder Survey

As generations continue to mix in the workplace, many older workers are reporting to younger bosses. A new CareerBuilder survey finds that 43 percent of workers ages 35 and older said they currently work for someone younger than them. Breaking down age groups, more than half (53 percent) of workers ages 45 and up said they have a boss younger than them, followed by 69 percent of workers ages 55 and up. This survey was conducted from November 5 and November 23, 2009, among more than 5,200 workers.

Occasionally, the younger boss, older worker situation can create challenges. Sixteen percent of workers ages 25-34 said they find it difficult to take direction from a boss younger than them, while 13 percent of workers ages 35-44 said the same. Only 7 percent of workers ages 45-54 and 5 percent of workers ages 55 and up indicated they had difficulty taking direction from a younger boss.

Don’t blame manufacturing for Oregon’s chronic unemployment

For Portland, more bikeways mean fewer paved roads
By Dr. Eric Fuits,
EconInternational

At 11 percent unemployment, Oregon is tied with Alabama for having the ninth highest unemployment in the U.S.  Some politicians and policy makers are cheering the fact that Oregon is not tied for first or second place, as it was a few months ago. Even so, Oregon has occupied a spot in the top ten highest unemployment states in 18 of the past 34 years.

Is new credit-check ban for job applications good or bad?

By Patrick Emerson
Oregon Economics Blog

Oregon state Senate Bill 1045 prohibits most employers from using credit checks in their pre-employment screen of job seekers.  It has passed the house and senate and awaits the Governor’s signature.

It is not clear to me where the market failure is here.  It seems to me that proponents of the bill are suggesting two problems: the information is not meaningful (good people caught due to no fault of their own), or the information is wrong.  If the information is not meaningful or inaccurate then the market should take care of the problem by itself: employers will find that using credit reports does not yield good information and costs money and time and thus they should decide that it is not worth the effort.

What is in the Senate Jobs bill that was passed

Senate Jobs Bill: Tax Incentives to Hire Unemployed, but no COBRA Subsidy Extension
by Dennis Westlind
Stoel Rives LLP, Attorneys at Law

Last week the U.S. Senate  voted 70-28 to approve the Hiring Incentives to Restore Employment (HIRE) Act, a $15 billion bill aimed at creating jobs, helping small businesses, and rebuilding public infrastructure.  However, the bill does not include a further extension of the current COBRA subsides for unemployed workers, nor does it increase funding for state unemployment insurance programs.  Click here to read the New York Times’ coverage of the HIRE Act’s passage.  Click here to read the full text of the HIRE Act.

The key features of the HIRE Act include:

- An exemption from Social Security payroll taxes for private employers for each worker hired in 2010 who previously had been unemployed for at least 60 days;

CA & WA eye taxes on Amazon, candy, & bottled water

California & Washington Consider Taxes on Amazon, Candy, & Bottled Water
By Oregon Tax News,

As desperate States struggle to balance their budgets, California’s Legislature plans to place a bid on the governor’s desk this month in hopes of reaping up to $150 million annually for state and local coffers. The proposal would force Amazon to start collecting tax from their customers.  The revenue is tiny in comparison to the state’s $20-billion deficit, but supporters say every dollar counts in tight times.

The online retail giant has enjoyed an edge over many competitors in the state because it is not required to collect sales tax from residents who buy books, top-of-the-line plasma televisions, cases of diapers and thousands of other products from its website. The Seattle Corporation has no store, warehouse, office building or other physical presence in California, and the state cannot tax such businesses under a 1992 Supreme Court decision.

Business Alliance gives final comment on 2010 Session

Statement on the February 2010 Session
Alliance of Oregon Business Associations,

The Democrat-controlled legislature spent the month of February increasing spending and debt, raiding the state’s cash reserves and imposing more regulations on Oregon’s struggling businesses instead of reaching out to Oregon’s Main Street businesses to help create private sector jobs for Oregonians.

The legislature’s failure to deal with Oregon’s 11 percent unemployment rate was evidenced by the fact that hundreds of unemployed union members came to the capitol to plead with the legislature to create family wage jobs. Their pleas fell on deaf ears.

U.S. Chamber Comments on Wyden’s Tax Fairness Plan

U.S. Chamber Comments on Bipartisan Tax Fairness and Simplification Act
By U.S. Chamber of Commerce

WASHINGTON, D.C.—The U.S. Chamber of Commerce today said it believes the bipartisan efforts of Senators Wyden and Gregg to begin the process to reform the tax code take steps in the right direction, addressing two major concerns in the tax code – the high marginal corporate tax rate and onerous and burdensome alternative minimum tax.

“While this is a great beginning, with tax reform the devil is always in the details,” said Dr. Martin Regalia, chief economist for the Chamber. “This proposal includes tax increases which are intended to pay for the proposal’s broad benefits but which fall disproportionately on specific sectors, industries, and income groups.”

AIG to pay $8 million for Oregon losses

Insurance giant AIG will pay $8 million to settle lawsuit over its role in causing Oregon pension fund losses
Oregon Public Employees Retirement Fund filed suit to recoup losses for workers and retirees
BY Oregon State Treasurer Ben Westlund,

SALEM – The Oregon Public Employee Retirement Fund will recover losses that were attributable to a pattern of poor disclosure and bid-rigging by insurance giant American International Group Inc. (AIG), under a settlement announced today by State Treasurer Ben Westlund and Attorney General John Kroger. The company agreed to pay $8 million to settle the lawsuit, which alleged securities fraud. The suit was filed by the State Treasurer’s Office and Public Employee Retirement System Board.

“We go to great lengths to protect Oregonians and their public investments,” said Treasurer Westlund. “This settlement is another example of how your State Treasury is protecting the public good.”

Serving on a board — Honor or Minefield?

Board membership - an honor or a financial minefield?
By Dunn, Carney, Allen, Higgins & Tongue

It is often thought of as an honor to be asked to serve on boards of directors.  However, those asked may be in for a surprise when it comes to the personal liability to which they may be exposing themselves.  An astute board prospect would certainly ask to see the articles and bylaws to see the degree to which these documents provide for indemnification and the advancement of expenses that might be incurred as a director.

Do these provisions protect the proposed director?  Maybe, if the circumstances are right.  Otherwise, no.

A recent Delaware court found that a former board member was not entitled to advancement or reimbursement of defense expenses after the board amended the bylaws to eliminate this protection for former directors, even though this amendment was made after the alleged bad acts or omissions occurred and after the former director ceased to be a director.

EEOC Proposes New Age Discrimination Regulations

by Dennis Westlind
Stoel Rives LLP, Attorneys at Law

Today the Equal Employment Opportunity Commission (EEOC) releases new regulations that will define employers’ “reasonable factors other than age” or “RFOA” defense under the Age Discrimination in Employment Act (ADEA).  The new regulations would reflect two Supreme Court cases interpreting the RFOA defense: Smith v. City of Jackson (2005) and Meacham v. Knolls Atomic Power Laboratories (2008).  Click here to read the EEOC’s Proposed ADEA Regulations.

The Supreme Court held in Smith that employment practices having a disparate adverse impact on workers age 40 and older may violate the ADEA.  The Court in Meacham then ruled that when a plaintiff proves such an adverse impact, employers have the burden of proving that the practice that caused the adverse impact was based on reasonable factors other than age.”  Since Smith and Meacham, however, there have not been any interpretive regulations under the ADEA to guide employers on the RFOA defense.

Ron Wyden showcases Bipartisan Tax Reform

The Bipartisan Tax Fairness and Simplification Act of 2010
By Senators Wyden (D-OR) and Gregg (R-NH)

As Congress readies for the inevitable partisan debate over how best to address the expiring 2001 and 2003 tax cuts, U.S. Senators Ron Wyden (D-Ore.) and Judd Gregg (R-NH) today offered a bipartisan solution. The “Bipartisan Tax Fairness and Simplification Act of 2010″ takes a comprehensive approach to reforming the tangled web of nearly 10,000 exemptions, deductions, credits and other preferences that currently clutter the U.S. tax code in order to create a simpler and fairer system that American workers and businesses can more easily navigate. By eliminating many of the tax expenditures that benefit narrow special interests, Wyden-Gregg offers fiscally-responsible tax-relief to the middle class and growth opportunities for American businesses to create jobs and compete globally.

Could Nike leave Oregon?

Business News Note: A few years the Governor of Arizona invited Phil Knight for a visit which immediately started rumors that the Governor was luring NIKE to his state.  Now the rumors are awaking again in light of new Measure 66-67 taxes passed on Oregon business that Phil Knight opposed. Below is an editorial from the Idaho Statesman Newspaper.

By Dan Popkey , Idaho Statesman (Boise, Idaho)
February 20, 2010

Nike founder Phil Knight is hopping mad at $727 million in tax increases on corporations and the wealthy in Oregon. Idaho leaders long to catch their rich neighbor’s eye.  Idaho has wooed Nike before - a revelation offered by Lt. Gov. Brad Little, who salivates at the prospect of landing one of the world’s best-known brands.   “Phil Knight was up front: Don’t change the tax code, and if you do, we’re going to do something,” Little said. Knight hasn’t expressed interest yet, Little said. “But we’re gonna call him.”  Knight is No. 24 on Forbes’ list of richest Americans, with a net worth of $9.5 billion. He gave $100,000 to the campaign to defeat Measures 66 and 67. Both tax bills passed Jan. 26.

9 bills to watch in Special Session

Oregon NFIB,
The Oregon Legislature is now in its third week of the special session. Feb. 11 was the last day for bills to move out of their committee of origin, except for those in Revenue, Rules, or Ways and Means. This means a number of bills will be left in committee and are effectively dead.  The Legislature passed on any type of kicker reform. Gov. Ted Kulongoski asked legislators before the special session to pass a measure that would permanently place the kicker in a rainy day fund. But lawmakers decided now is not the right time for it.

The Senate Rules Committee passed a measure that would permanently put in place annual sessions. This would be a constitutional change and would require a vote of the people in the November election. Polling recently showed Oregonians in favor of annual sessions. The Senate should vote on the measure later this week.

US Chamber Report Finds Fault in Copenhagen Plan

New Energy Institute Analysis: Copenhagen Commitments Fall Short
US Chamber of Commerce

WASHINGTON, D.C.— A new analysis released today by the U.S. Chamber’s Institute for 21st Century Energy reveals that even if emissions reduction pledges made under the Copenhagen Accord were adopted, the world would still see a significant rise in greenhouse gas emissions, primarily because of growing emissions from developing countries.  In a new report titled “Copenhagen Accord By-the-Numbers,” the Energy Institute analyzed all 2020 emissions reduction targets submitted by developed and developing nations to the Copenhagen Accord.  Under the Institute’s analysis, even if the targets submitted are adopted, global emissions in 2020 will still be above 2005 levels by as much as 20 percent.