The Oregon Biz Report - Business News from Oregon

What’s on the Health Care Table to Keep $800 Million in Fed Matching Funds in Oregon
By Betsy Earls
Associated Oregon Industries
Oregon’s Largest Business Advocate

The Current Program
There are two distinct revenue streams in Oregon’s current program: a tax on the 25 largest hospitals (those with more than 50 beds), and a tax on the state’s Medicaid Managed Care Organizations (MCOs).
The revenue from these two taxes is then used to draw down federal matching funds for Medicaid.  The federal match is significant: Oregon receives approximately $2 federal dollars for each $1 provider tax dollar it raises.

By Bill Conerly,
Businomics, Conerly Consulting LLC

We all know there’s a credit crunch, right?  That’s the basis for the latest (March 2009) Treasury bailout proposal.  So I went looking for the evidence, just to prove to you skeptics that there really is a credit crunch.  I looked at business loans from banks (data here), comparing all the post-World War II recessions.  Here’s what I found (latest cycle in thick blue):

The data link above has a plain-vanilla chart, in case you don’t like my recession-comparison baby.

Safeguarding Service: Focus on the Faithful

Times are unquestionably tough with businesses closing at an alarming rate so what are the successful ones doing to survive? You now have the opportunity to learn the “secrets to success” from the top 25 customer service companies as reported by BusinessWeek. The key is to implement four important ideas for keeping costs down and cutomer service solid: Flex Your Workforce, Spoil Surviving Staff, Invest in Simple Technology, and Baby Your Best Customers.

Wells Fargo Gallup Survey:  Small business owners’ optimism recently dropped to its lowest level in the six years that the Wells Fargo/Gallup Small Business Index has been conducted. Covering a survey period of January 22 – February 2, the score now stands at negative four (-4), down 14 points from the previous survey (November, 2008), and 118 points lower than the Index high of 114 (November, 2006). It is the first time the index has dropped below zero. A score of zero indicates that small business owners, as a group, are neutral — neither optimistic nor pessimistic — about their companies’ situations.

Paul Bissett, CEO of WeoGeo, was one of the Oregon Entrepreneurs Network $80,000 winners
Liz Overson
Oregon Entrepreneurs Network

Paul Bissett, CEO of WeoGeo, a geo-spatial content management service for surveyors, engineers, cartographers and scientists, knows there is a vast market for his product. Some people have described his product as an iTunes for maps because it has better indexed maps which has reduced customer storage,  hosting costs, and saved thousands for businesses.   Bea.gov reports (as of 2002) a $175B demand for architectural services and IDC quotes a $145B worldwide demand for mapping. WeoGeo can help with that and so much more. To that end, Paul moved his family and much of his team across the US, from Tampa to Portland, in search of a business community that fosters growth for entrepreneurs and start ups.

By Ken Niezgoda,
BIZ Reporter

President Barack Obama promised to elevate science to play a key role in the nation’s recovery. While the economic impact of this pledge is still taking shape as stimulus dollars trickle down, the impact of science on Oregon’s economy can be assessed through several key reports.

Obama Pushes Health Care and Renewable Energy Agenda

“We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories,” said Obama in his inaugural address. The pledge reflects a philosophy long-embraced in Oregon.

By Associated Oregon Industries,
Oregon Largest Business Lobby

Outnumbered ten to one by medical marijuana advocates in a House Business & Labor Committee hearing this week, representatives of Oregon’s leading business organizations testified in support of HB 2497 and HB 3052.  These identical bills, sponsored by Representatives Bruce Hanna and Mike Schaufler, clarify that employers are not required to accommodate medical marijuana in the workplace, regardless of where the use occurs.

Business representatives also raised concerns about HB 2881, sponsored by Representative Peter Buckley, which seeks to require employers to use a Medical Review Officer (MRO) to review any positive marijuana test and give the MRO the decision on whether medical marijuana cardholders no longer pose a safety risk and can return to work.

By Alyssa Williams,
BIZ Reporter,

The Oregon House Committee on Environment and Water voted to drop wine and liquor bottles last Thursday from the potential amendments to House Bill 2184 which would expand the almost 40-year-old Oregon Bottle Bill, Oregon’s beverage container return law. It was also decided to increase the deposit from a nickel to a dime only if bottle-bill recycling falls below 80 percent by 2015. The committee has yet to deliberate on the full bill.

Other possible additions to the bill based on recommendations from the Bottle Bill Task Force would require deposits for bottles and cans containing sports drinks, coffee, tea, juice and similar non-carbonated drinks, as well as adding 90 redemption centers across the state.

By Bill Conerly, Businomics, Conerly Consulting,

Housing Starts Weak Despite the Headlines.  The Wall Street Journal says, “Surprise Jump in Housing Starts.” Yahoo Finance says, “Housing Starts Surge Unexpectedly.” So let’s look at the data (Chart on Right): The uptick doesn’t seem to match the headlines.  We’ve seen a few up months during the downward trend, so don’t get too excited.  We are still overbuilt in houses, as shown by the vacancy data.

You might wonder why any housing units at all are being started.  Remember that housing is local, so there may be a community without the huge excess inventory.  Then examine the inventory in that community; there may be neighborhoods without an excess.  There may be types of housing and price points that are not in excess.  That justifies some new construction.

Oregon-Based Plastics Recycler First in Nation to Reclaim Synthetic Crude Oil from Unwanted Plastic.
Agri-Plas ships first batches of crude oil to refinery

BROOKS, Ore.–(BUSINESS WIRE)–In the latest showing of Oregon’s entrepreneurial and environmental prowess, Agri-Plas, an Oregon-based plastics recycler, is the first company in the nation to convert unwanted and typically unrecyclable agricultural plastics into crude oil and ship it to a refinery for commercial processing.

Oregon Association of Hospitals & Health Systems,
Press Release,

The Facts: Oregon’s uninsured population is at least 632,000 and hospitals and health insurance plans are committed to expanding health coverage. The following is a summary of a model proposed by health care stakeholders to raise revenue necessary to expand coverage to low-income adults and children.
How it works in Two Parts:

Medical claims: A claims assessment of up to 1% would be levied on all processed health insurance claims in Oregon with the exclusive intent of funding health care services for low-income adults and children. The assessment would be applied to the claims of insurers, third-party administrators, Medicaid managed care plans (MCOs) and Medicare contractors. The assessment would apply to medical claims, prescription drug claims and dental claims for customers who are insured, self-insured, or enrolled in Medicaid or managed Medicare plans.

By Ken Niezgoda,
BIZ Reporter,

Seventy percent of all jobs lost last year in Oregon were lost in the last quarter, and the state will continue to lose jobs in nearly all industries throughout 2009, according to Oregon Economic and Revenue Forecast released by the Department of Administrative Services
Office of Economic Analysis. The report also mentions economic indicators that show Oregon experienced the largest decline in economic activity of any state for a three-month period going into November 2008.

José Pinomesa, President
Oregon Independent Auto Dealers Association

Gas prices are just under half of the all time high and hybrid vehicles are still not selling as fast as they use to.  The summer of 2008 was a time that I will never forget.  Hybrid vehicles brought the most money in history while consumers paid thousands over the Manufacturers Suggested Retail Price (MSRP).  They panicked and in most circumstances they traded in their fuel slurping sport utility vehicle as fast as they could.  Anything with a six or eight cylinder engine was not worth much in trade due to the demand for four cylinder cars.  Many people financed these purchases and only found themselves upside down in a purchase they thought was a green choice.

By John Ledger
Associated Oregon industries

“Open Season” bill encourages lawsuits against agriculture, businesses, and forestry – local government immune.A late breaking bill in the Senate Judiciary committee, SB 962, would allow any person “adversely affected” by a “violation of a state environmental law (or any permit), or by the failure of a state agency to enforce a state environmental law” to file for “injunctive and other equitable relief.”  Attorney fees may be awarded to successful plaintiffs for expenses including costs of expert witnesses, supporting studies, and reports.  The provisions of SB 962 expressly do not apply to violations by “local government.”

By Bill Conerly, Businomics, Conerly Consulting

Last week the market (as measured by the S&P 500) rose 10 percent.  Ten percent is a decent gain for an entire year.  (Yes, I know that we have some losses to make up, but that’s not the point).  The lesson from Mr. Market is that you get gains when you least expect them.  If your long-term asset allocation guidelines call for owning  a certain percentage of your wealth in stock, then stick with the plan.  It really paid off this past week.

Wells Fargo & Company (NYSE:WFC) issued this statement about allegations made by the National Association for the Advancement of Colored People (NAACP).

“The NAACP’s allegations are totally unfounded and reckless. We have never tolerated, and will never tolerate, discrimination in any way, shape or form in any of our business practices, products, or services. We are proud of our lengthy record leading the industry in responsible lending practices and in support of the communities we serve, which makes the very thought of a discrimination claim reprehensible to us.”

By Barran Liebman,
Electronic Alerts

The EEOC issued proposed rules today that would implement Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”), which prohibits the use of genetic information in employment decisions and extends Title VII-type protections to applicants, employees, and former employees with respect to genetic information. GINA is scheduled to go into effect November 21, 2009, and specifically will:

Forbes Billionaire’s list diminishing, but the NW Microsoft triad remain strong

The world’s richest have not escaped the reaches of the financial disasters of the past year. According to Forbes magazine there are 332 less billionaires, a 30% decline from one year ago. Their collective net worth is $2.4 trillion, down $2 trillion, and their average net worth fell 23% to $3 billion. There are fewer of them, and their collective net worth has fallen, but the shift of power that remains may surprise many.

After slipping in recent years, the U.S. is regaining its dominance as a repository of wealth. Americans account for 44% of the money and 45% of the list’s slots, up seven and three percentage points from last year, respectively. Even though there are 110 fewer billionaires than a year ago.  Oregon’s Phil Knight moved up the list from 73rd to 52nd. the Northwest’s three Microsoft giants maintain their prominence.

March Update – More Changes & Challenges For Employers
By Dunn, Carney, Allen, Higgins & Tongue

1. Employee Free Choice Act
2. Oregon Senate Bill 519 – Limits Employer Free Speech
3. Retaliation Protection Expanded by the Courts
4. New Form I-9 Effective Date

This year has been filled with changes and challenges for employers.  This month is no exception.  To assist you in navigating through these challenges, we offer brief, practical articles about the status of efforts to pass State and Federal legislation impacting the process of unionization and about the impact of the U.S. Supreme Court expansion of retaliation protection through its decision in Crawford v. Metropolitan Government of Nashville and Davidson Country, Tennessee.

By Traci Scott,
BIZ Reporter,

U.S. warehouse clubs and discount retailers recently reported a mixed bag of sales results.  Shoppers looking to warehouse clubs for bargains on groceries contributed to increased food sales at both Costco Wholesale Corporation and BJ’s Wholesale Club, Incorporated, but both retailers reported sales of other items declined in the last quarter.

Costco, the largest warehouse club in the U.S. based on sales, reported profits fell 27% to $239.7 million, or 55 cents per share, for its fiscal second quarter.  This compares to $327.9 million, or 74 cents per share a year earlier.  Revenue declined to $16.84 billion from $16.96 billion for the quarter.