The Oregon Biz Report - Business News from Oregon

By Dr. Eric Fruits, EconInternational

The S&P/Case-Shiller Home Price Indexes measure the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. The most recent data covers home sales through February 2009.  In Portland, prices are down 14 percent from last year.  Portland home values are down 19 percent from their peak in July 2007.  Read more: “Portland and U.S. home prices continue their decline “

By Alyssa Williams, BIZ Reporter

Oregon Restaurant Association (ORA) Director of Government Relations Bill Perry is looking out for our waists and wallets as he works on implementing legislation for restaurant menu labeling and questions minimum wage increases in the poor economy.

As of March 12, 2009, legislation requires chains in Multnomah County with 15 or more locations nationwide to display calories counts for food, drinks and condiments that are not provided free next to the item name on menus, menu boards, drive-through order boards and food tags at buffets and self-service stations. This will affect over 500 restaurants in the county.  “It is better for a consumer and a business to have a uniformed standard,” said Perry.

John Marshall
Associated Oregon Industries
Oregon’s Largests Business Lobby

Raising taxes on Oregon businesses in an economic recession and during a period of record unemployment makes no sense, was the message conveyed this week to the House Revenue Committee by AOI and other business community representatives.  The committee held a public hearing on four bills (HB 2119, HB 2913, HB 3049 and HB 3405) that increase the current $10 corporate minimum tax.  The proposals raise between $21 million and $120 million per year.  No action was taken on the bills, but behind-closed-door discussions are apparently being held to determine the structure and revenue impact of a corporate minimum tax increase measure.

By Bill Conerly, Businomics, Conerly Consulting

When the recession is over, business challenges will be different, not gone.  Companies wrestling with the downturn need to consider what new problems they’ll face in the recovery.

You may have cut back on your staffing level to survive the recession.  When sales recover, you’ll start hiring—but whom?  Many of the folks you laid off will not be available.  Some of the people you hire may not have worked in your industry before.  You will have a training challenge greater than you had before the recession.

Businessweek’s Top 25 Most Innovative Companies 2009

Skycore LLC, developers of the leading mobile messaging and content platform, Cellyspace.com, and Oregonian Publishing Co. today announced the debut of the Pulitzer Prize-winning newspaper’s storefront featuring historic pages available as mobile wallpapers. The joint effort makes The Oregonian one of the first newspapers in the country to take advantage of the ground-breaking mobile technology.

Potential conflicts of interests plague Energy Trust of Oregon board and council members
By State Senator Larry George,

Salem, OR – According to public records, at least thirteen Energy Trust of Oregon board and council members work for companies and organizations that receive incentive and consultant payments from the trust. The Energy Trust of Oregon is also exempt from ethics and reporting requirements required of other public officials. Every two years the board and employees of the Energy Trust of Oregon are responsible for spending a fund that has exploded in size by 480% to over $150 million of public money.

By Dr. Eric Fruits,
EconInternational

By Traci Scott, BIZ Reporter

According to a recent Nielsen consumer survey, 66 percent of fine dining patrons admit they are going out less often compared to a year ago. This trend was echoed by 65 percent of nightclub patrons, 55 percent of bar patrons, 59 percent of casino and resort patrons and 52 percent of casual dining visitors.  A report from Fitch Ratings suggests things aren’t likely to improve anytime soon.  Although gas prices are declining and the government stimulus package is in effect, these conditions are being canceled out by rising unemployment and downward pressure on the housing and stock markets.

To counter lagging business, U.S. restaurants and bars are turning to innovative and desperate measures to lure in diners and retain their customers, including the following:

Betsy Earls
Associated Oregon Industries
Oregon largest business lobby

Health insurance mandates are thick on the ground this session, although not all of them have had hearings.  Those that have had hearings will have to move out of committee in the next few weeks; others may turn into study groups or task forces which make recommendations next session.

SB 316—Routine costs of care while participating in clinical trials:
SB 316 requires health insurance carriers to cover the costs of routine care for patients enrolled in clinical trials.  The bill does not require that insurance companies pay costs related to the clinical trial—only those costs that would be incurred and covered if the patient was not enrolled in the trial.  AOI met with health insurance carriers, OHSU and Senators Alan Bates and Richard Devlin in early February in an effort to reach agreement on specific language in the bill.  The meeting was a complete success, but due to drafting problems, correct amendments did not emerge until recently.  SB 316 had a work session last week, and passage is expected.

Bill Conerly, Businomics, Conerly Consulting

Today’s headlines sound gloomier than the data–once again.  The Wall Street Journal says, “U.S. Retail Sales Show New Weakness.”  Yahoo Finance says, “Stocks slip as retail sales data disappoint.”  So how bad is the new data?

Mark G. Neil, KBNP Business radio host
President Northwest Wealth Advisors

Welcome to the middle of April.  March began with stocks heading even further into the doldrums, falling over 9% in the first week of trading. The turnaround in share prices can be pinpointed to a single catalyzing event: On March 10th an announcement from Citigroup CEO Vikram Pandit, started a wave of optimism in the market that sent bank stocks soaring and the markets soon fell in step.  An internal email stated that the company was profitable in the first two months of 2009, and had passed internal stress tests with flying colors. Stocks responded dramatically, with the S&P 500 gaining over 6% on the day and the KBW Banking Index more than doubling that result, rising 15.6%. Over the following two days, the CEOs of JP Morgan Chase and Bank of America made similar comments regarding their companies. Equity markets never looked back, ending March with substantial gains, led by the banking sector.

Northwest Natural Gas Company, dba NW Natural (NYSE:NWN), today announced a tariff filing has been made with the Public Utility Commission of Oregon (OPUC) to provide a $32 million credit to its Oregon customers as a result of a recent decline in wholesale natural gas costs.

By Ken Niezgoda, BIZ Reporter

Oregon businesses that may have never considered significant layoffs in the past are facing the prospect of huge staff reductions. Many employers are aware that the Worker Adjustment and Retraining Notification Act requires employers facing large-scale layoffs to post written notice so that employees can seek new jobs or retraining. Some don’t realize that state services are available even if a layoff doesn’t meet WARN criteria.

“It would be nice if we could get the word out,” said Laura Roberts of The Dislocated Worker Unit. As part of the Department of Community Colleges and Workforce Development, the unit provides services to employees facing layoff.

By Alyssa Williams, BIZ Reporter

1. Family Leave Payroll Tax: (SB 966)
2. Employer censorship bill (SB 519)
3. Corporate minimum tax bill

With Oregon now having the highest rate of unemployment in the nation, hitting a staggering 12.1 percent in March, the Oregon division of the National Federation of Independent Business (NFIB/OR) is evaluating most current legislation based on whether it kills or creates jobs, according to NFIB/OR State Director Jenna Kaluza.

Senate Bill 966 family leave payroll tax. NFIB/OR opposes Senate Bill 966 for paid family leave because the program taxes employees in the worst economic times, said Kaluza. The bill, which taxes workers 2 cents for every hour of work (around a total of $42 a year), allows an employee $300 a week for up to six weeks of leave at a time for extended caregiving, not personal illness. However, the law would exclude companies with less than 25 employees, she said.

Dr, Eric Fruits, EconInternational,

If passed, Oregon SB 80 would establish a greenhouse gas cap-and-trade scheme for the State of Oregon. The Oregon Senate Committee on Environment and Natural Resources will have a public hearing on SB 80 on Thursday April 9, 2009 at 3:00 P.M. in Hearing Room C.  The following is the written testimony submitted by Eric Fruits regarding the costs of Oregon SB 80.

TESTIMONY: In September 2008, I co-authored a comprehensive analysis of the economic and fiscal impacts on Oregon of meeting the ambitious greenhouse gas reduction goals outlined in the proposed amendments to SB 80. In February 2009, I submitted testimony on the economic and fiscal impacts associated with the cap-and-trade scheme introduced in SB 80. I have attached my past testimony and the report I co-authored.

By J.L. Wilson, Associated Oregon Industries,
Oregon’s Largest Business Lobby

In a packed Senate hearing room, AOI delivered strong opposition this week to a new proposal that would tax Oregon workers to fund a paid family leave benefits program to be implemented by the state.  The new proposal – SB 966 – would tax Oregon workers at a rate of two cents per hour worked.  The proceeds of the new tax would allow Oregon workers who elect to take family leave to collect weekly paychecks in the amount of $300 for up to six weeks.  In its current form, the new tax and benefits in SB 966 only apply to workers who work in companies with 25 or more employees.

By Bill Conerly, Businomics, Conerly Consulting,

I don’t think we’re headed to depression, but that’s the word used by Steven Gjerstad and Vernon Smith in a Wall Street Journal article that is well worth reading.  I wrote about how we got into the mortgage mess in a five-part series:
Part 1 asks why the mortgage mess happened, and why did it happen when it did.
Part 2 explains the role of the Great Moderation and the mild housing cycle in the 2001 recession.
Part 3 explains the role played by securitization of mortgages.
Part 4 explains how the 2001 recession set up the trigger for the current crisis.
Part 5 looks at the future and provide some suggestions for policy.

Miller Nash
Oregon and Washington Law Firm

Miller Nash LLP, one of the Pacific Northwest’s larger multispecialty law firms focusing on business and litigation, has highlighted key opportunities for businesses in the American Recovery and Reinvestment Act of 2009. Signed into law on Feb. 17, 2009, the Act includes incentives for individuals and businesses to help jumpstart the economy. While certain individual incentives – such as for car buyers or first-time homebuyers – have been well publicized, the Act’s benefits for businesses may not have the same broad awareness.

By Dunn, Carney, Allen, Higgins & Tongue

As Mara, an accounting clerk at a dental supply wholesaler, hung up on the phone, she knew that her coworkers heard everything –another creditor demanded money she didn’t have.  Four months earlier, her husband lost his job and bills were piling up.  Mara shared her tale of financial woe, time and again, with her colleague Jenny.  But as months passed, Mara simply stopped talking about her debts.

Six months later, Jenny discovered why Mara had been silent on the subject.  At the end of one workday, when no one else was around, Jenny saw Mara slip a vendor check into her purse.  Now it all began to make sense: Mara was stealing from the company.