The Oregon Biz Report - Business News from Oregon

Barran Liebman LLP

A new decision from the Washington Court of Appeals, Roe v. Telletech Customer Care Management LLC, provides a victory for employers who resist employees’ requests to accommodate their medical marijuana use. The case involved an employee who, after only two weeks of work, was terminated once she informed management that she was authorized by the State of Washington to use marijuana to treat her migraine headaches. The company was unwilling to make an exception to its substance abuse policy, and terminated her when the results of a standard pre-employment drug test came back positive for marijuana.

The court answered two questions on appeal. First, did the Washington State Medical Use of Marijuana Act (MUMA) imply a civil cause of action to sue an employer who refuses to accommodate employee use of marijuana? Second, for purposes of Washington’s wrongful discharge tort, does MUMA express a strong public policy in favor of medical marijuana use such that an employer who terminates an employee for off-duty medical marijuana use can be liable?

By Dr. Eric Fruits
Econinternational

Portland politicians love their streetcars. Earlier this month, the city council unanimously approved a streetcar concept plan (PDF) that calls for a massive expansion of the streetcar system throughout Portland.

Streetcar systems have substantial construction costs. On top of that, Portland’s system has huge operating losses. The City of Portland alone provides a subsidy of $1.9 million (or more) a year, or about $1.50 per rider (this PowerPoint has more information). Other funding comes from TriMet, sponsorship, and farebox revenues.

Rasmussen reports that, “Just 41% of voters nationwide now favor the health care reform proposed by President Obama and congressional Democrats. That’s down two points from a week ago and the lowest level of support yet measured. The latest Rasmussen Reports national telephone survey finds that 56% are opposed to the plan.  Senior citizens are less supportive of the plan than younger voters. In the latest survey, just 33% of seniors favor the plan while 59% are opposed. The intensity gap among seniors is significant. Only 16% of the over-65 crowd Strongly Favors the legislation while 46% are Strongly Opposed.” Continue Reading

By Bill Conerly, Businomics, Conerly Consulting LLC

For years I heard sellers of luxury goods say, “The rich will always have money.”  Then the recession came and we learned that the rich will not always spend their money.  As an example, I wrote a blog post using the mega-yacht business as an example of the economics of the luxury market.

Now some hot-shot quantitative economists have illuminated me even more.  Jonathan A. Parker and Annette Vissing-Jorgensen (both of Northwestern University) have written a paper about how consumer spending varies across the business cycle.  Their conclusion is that the spending of the upper income groups is much more variable than the spending of lower income groups.  (The article appeared in the American Economic Review: Papers and Proceedings, May 2009.  Available here: Who Bears Aggregate Fluctuations and How?)

Oregon Entrepreneurs Network Names Winners at the 16th Annual OEN Tom Holce Entrepreneurship Awards
By Oregon Entrepreneurs Network

Ray King of AboutUs wins the award for individual achievement. Jama Software, Monsoon, and Motorcycle Superstore are Selected as this year’s award winners in company categories

Sept. 24, 2009, Portland, Ore. — The Oregon Entrepreneurs Network (OEN) announced the winners of the 2009 OEN Tom Holce Entrepreneurship Awards during its 16th annual awards ceremony. The ceremony honored finalists in four categories: OEN Entrepreneurship Award for Individual Achievement; OEN Development Stage Company of the Year; OEN Working Capital Stage Company of the Year; and OEN Growth Stage Company of the Year.

New ‘Buy Oregon Bonds’ sales will create jobs and finance vital energy, courtroom and state hospital projects
By Oregon State Treasurer,

SALEM – State Treasurer Ben Westlund today announced two upcoming “Buy Oregon Bonds” sales that will create jobs and finance important projects, while also allowing the public to earn solid investment returns. The two sales will be the latest in a campaign launched this year that offers the public the first shot to “Buy Oregon Bonds” during a presale order phase. Attracted by Oregon’s solid credit rating and a desire to help the state and themselves, retail buyers placed orders in record amounts for the State’s first bond sales of 2009.

By Amy Vander Vliet
Published Sep-21-2009

The latest report from the state Office of Economic Analysis (OEA) contains more good news than it has in a while. The freefall is over, the worst is behind us, and recovery is in sight. However, once here, the recovery both in Oregon and the nation will be slow and jobless in the initial stages.

By Doug Batey
LCC Law Monitor
Stoel Rives LLP, Attorneys at Law
Portland,

Most business people who are familiar with the tax treatment of LLCs understand that LLCs are tax-efficient. LLCs are taxed as partnerships (except in the rare event that they elect to be taxed as corporations). Since they are taxed as partnerships, LLC profits and losses are passed through to the members. The pass-through of LLC profits avoids double taxation—profits are not taxed to the LLC and are only taxed to the members. The pass-through of LLC losses allows members to use the losses to offset against their other income, reducing their tax bills.

What is less well known, except by tax lawyers and CPAs, is that the IRS has interpreted its regulations so that LLC losses are presumed to be “passive activity losses” (passive losses). Furthermore, the presumption is difficult to overturn. The result is that under the IRS’s interpretation of its regulations, LLC losses are often treated as passive losses.

Eco-nomics: Full Information and Efficiency
By Patrick Emerson
Oregon Economics Blog

One of the requirements necessary for a free market to reliably achieve an efficient outcome is full and symmetric information. So this article on a smart electricity grid pilot project is pretty interesting. What this project did, in essence, is give customers real-time information on energy usage from all parts of the house.

“Consert attached controllers on hot water heaters, air conditioners and pool pumps and then let customers go online and set targets for their monthly electricity bill. Smart meters and a wireless communications system provide real-time electricity consumption data to allow the utility to cycle appliances on and off to achieve the savings and help it manage peak demand.”

Q&A with Mark Burles,
Senior Vice President
Ipsos Public Affairs , Seattle

Should US business be concerned over the recent Obama tire tariff?

Burles: Absolutely. The last thing the global economy needs is for a trade war to erupt between the US and China. That said, it is a complicated issue. For example, while it certainly may be true that the Administration imposed the tariff in response to domestic political pressure from its union allies, it may also be true the China is, in fact, guilty of unfair trade practices justifying the punitive tariffs. And while exports are going to be even more important to economic growth in the US in the future and we need to be sure we retain access to large, emerging markets like China’s, it is also true that China may need to be pushed to move away from its export-oriented economic model.  

USA Today Reports, “Housing is getting even less affordable.  More Americans found housing unaffordable last year, even though home prices across the U.S. have taken a major fall. More than 40 million spent 30% or more of their household income on housing costs, 600,000 more than in 2007, according to 2008 Census data released Monday. That includes homeowners with and without mortgages, as well as renters.  The number of renters increased, while the number of homeowners declined.”  Continue Reading.

Understanding, Addressing, and Resolving Bullying Behavior in Your Workplace
By Dunn, Carney, Allen, Higgins & Tongue

Bullying in the workplace is a common, and often misunderstood problem.  In a 2007 survey, half of the employees interviewed said they had heard someone scream at a co-worker during work.  Almost one-third acknowledged that they have, after an upsetting situation at work, told someone that they wanted to do something awful to a boss or co-worker.  Workplace bullying seems to be on the rise, and now occurs 4,300 times more often than workplace homicide, and up to three times more often than unlawful harassment, discrimination, and retaliation, combined.  Most are surprised to learn that more often than not, the bully turns out to be female … and educated.  This means that certain work environments are statistically more vulnerable.

From Businessweek, “Republican gubernatorial candidate Meg Whitman said she wants to cut state spending by another $15 billion and reduce California’s existing state work force by 17 percent, even as the state has wrestled with budget shortfalls in recent years that have led to deep cuts in education and other core programs.  Whitman will outline some of her campaign themes in a speech Tuesday during which she will formally announce her bid for the Republican nomination. The campaign rollout will be accompanied by a statewide radio ad promoting her business experience, most recently as the chief executive of eBay, the online auction site.” Continue reading.

By Dr. Eric Fruits
Econinternational

Final Health Care Reform Bill Released: Let the Reconciliation Begin
Barran Liebman LLP

The Senate Finance Committee officially released its health care bill, the last of the 5 bills to be introduced in the health care debate. This alert focuses on the impacts on employer based health insurance and not the broader issues of health care reform

How a Bill Becomes a Law

It is important to understand the procedural rules of Congress to predict the final outcome of a health care bill. Both chambers of Congress have committees with jurisdiction over healthcare. Each chamber has or will pass its own versions of health care bills. The bills are then combined into a full bill and voted upon. To avoid a filibuster or controversial amendments, the Senate needs 60 votes to pass a bill. The House, with its Democrat majority, is likely to pass any version of a bill that it wishes. The House and Senate bills are then combined and another vote is scheduled on the combined bills and the President will sign or veto the final bill.

By Oregon Employment Department,

Oregon’s seasonally adjusted unemployment rate rose to 12.2 percent in August from the revised July figure of 11.8 percent. Oregon’s unemployment rate has been close to 12 percent for the six month period March through August, following a steep run-up during the prior nine months. Oregon’s unemployment rate was 6.5 percent in August 2008.

- The U.S. seasonally adjusted unemployment rate rose from 9.4 percent in July to 9.7 percent in August, its highest level in 26 years.
- In August, Oregon’s seasonally adjusted nonfarm payroll employment declined by 6,600 jobs, following a gain of 500 (as revised) in July.

From Career Builders:

Counting down the hours until payday? You’re not alone. As the economic downturn trudges on, many workers are struggling with household budgets. Six-in-ten (61 percent) workers report they always or usually live paycheck to paycheck just to make ends meet, up from 49 percent last year and 43 percent in 2007. This is according to a new nationwide survey of more than 4,400 workers by CareerBuilder. Three-in-ten (30 percent) workers with salaries of $100,000 or more report that they too live paycheck to paycheck, up from 21 percent in 2008.

José Pinomesa, President
Oregon Independent Auto Dealers Association

It is a fact that it is going to cost more to own a vehicle in Oregon.  During this past legislative session Oregon passed a bill that would increase the vehicle fuel tax.  Even currently at $2.89 a gallon for regular unleaded it will soon jump up for the added tax.  Over time a gallon of fuel will soon go to $3.50 and then to $4.00 when the economy gets better.  A big increase in fuel taxes is not such a good thing when we are not that far away from people wondering whether they can afford to actually fill their tank or just put in a few bucks.

The Oregon legislature also passed a bill that would increase DMV fees.  Fees such as title, registration, regular plate and custom plate are all going up including trip permits.  Title will go from $55 to $77.  Vehicle registrations will go from $54 to $86 for two years.  Plates go from $5 to $23.  Custom plates go from $50 to $100 for two years.  Trip permits go from $20 to $30. 

The Wall Street Journal reports, “Housing starts climbed a less-than-expected 1.5% to a seasonally adjusted 598,000 annual rate compared to the prior month, the Commerce Department said Thursday. Building permits also increased last month.  Single-family starts in August compared to the prior month retreated 3.0% to 479,000, a modest pullback after five straight increases that accumulated with the steady rise in new-home sales.  As for the beleaguered apartment market, construction of housing with two or more units jumped 25.3% to 119,000. Within that multi-family category, groundbreakings of homes with five or more units were 35.3% higher on the month — and down 48.2% on the year.”

by Ahead of Schedule Law Blog
Stoel Rives LLP, Attorneys at Law
Portland,

The Oregon Court of Appeals recently issued an opinion in Abraham v. T. Henry Construction, Inc., et al., a residential construction defect case, that helps clarify the circumstances under which a contractor may be sued for negligence. The issue of whether a contractor may be sued for negligence, as opposed to breach of contract is, in many cases, relevant to a determination of whether the owner’s claims are barred by the statute of limitations. Owners often need to rely upon a negligence claim to get past the six-year statute of limitations that applies to claims for breach of contract.