The Oregon Biz Report - Business News from Oregon

By Oregon Small Business Association,

The latest national newspaper circulation numbers  show that only newspaper out of 25 largest to increase readership was the Wall Street Journal.   The Oregonian performed the best out of the other top 20 newspapers.

Biggest circulation drops among top 20 newspapers ranked by drop size (1)

Los Angeles Times —14.7%
Chicago Sun-Times — 13.9 %
Houston Chronicle —13.8 %
USA Today -13.6%
The Washington Post — 13.1%
Daily News of New York —11.3%
The Arizona Republic of Phoenix —9.9 %
Chicago Tribune —9.8 %
Newsday of Long Island, N.Y. — 9.1 %
The New York Times -8.5%
The Plain Dealer of Cleveland — 8.1%
Star Tribune of Minneapolis — 7.7 %
The Philadelphia Inquirer —5.9 %
New York Post —5.9%
St. Petersburg Times — 1.5 %
THE OREGONIAN  — 1.8%
The Wall Street Journal + 0.5% * increase*

By  J.L. Wilson
Associated Oregon Industries
Oregon’s largest business advocate

Associated Oregon Industries announced this week that it will formally support Initiative Petition 50, a constitutional measure which will change the way that legislative districts are drawn.

Background

After the 2010 Census, Oregon lawmakers will be tasked with re-drawing the boundaries for Oregon’s legislative districts. Redistricting may sound boring, but it will be the single, most pivotal event in Oregon politics for the next 10 years.

By Patrick Emerson
Oregon Economics Blog

The latest Case-Shiller numbers are out and are pretty dismal for Portland:

Comments below:

If you are thinking about hiring unpaid interns, think again
by Stacey Mark 
Ater Wynne
Oregon Attorneys at Law,

With summer fast approaching, you may be considering hiring students or others as unpaid interns.  While students and displaced workers may be grateful for the opportunity to gain experience and willing to work without pay, most employers should resist the temptation to take advantage of the “free” labor.  If your business derives a benefit from the work an intern performs, he or she will most likely qualify as an employee and must be paid at least minimum wage.

By Oregon Tax News,

On tax day before the Senate Commerce Committee, the Federal Communications Commission (FCC) proposed the National Broadband Plan that would expand the Universal Service Fund (USF) tax on landline and cell phones to include broadband internet.  The FCC estimates the National Broadband Plan will cost $350 billion to develop, but that the plan will pay for itself.  The goal is to tax all types of telecom service, including Internet service, and use this pool of money to subsidize the cost of broadband.

American Voters Want Consumer Protection Without Hurting Jobs and Main Street
– Six State Polls Show Unease With Consumer Financial Protection Agency
By U.S. Chamber of Commerce

WASHINGTON, D.C.—The U.S. Chamber of Commerce today released six state polls showing that American voters overwhelmingly oppose the creation of a new Consumer Financial Protection Agency (CFPA). The polls, conducted in Arkansas, Nebraska, Ohio, Montana, Tennessee, and Massachusetts, show a significant majority of voters believe “we should demand that existing agencies do their jobs, improve enforcement, and better coordinate their efforts,” rather than create a new agency. The polls were conducted by Ayres, McHenry & Associates from April 11 to 15 and had margins of error of plus or minus 4.0% to 4.9%.

State Treasurer announces panel to help guide travel policy revision, immediate change in per diem rules
By Oregon State Treasurer Office

SALEM – Oregon State Treasurer Ted Wheeler announced today the members of an advisory panel that will help him craft new travel-related policies for the Oregon State Treasury, where travel is frequent and necessary to protect more than $68 billion in public assets and to discover new opportunities.

Goldman Sachs, Synthetic CDOs, and … Fraud?
By Bill Conerly,
Conerly Consulting, Businomics,

The Goldman Sachs fraud charges certainly make the company look sleazy, but one key fact seems not to be discussed too much:  the securities involved were synthetic CDOs, and I think that makes a big difference.  The plan for this article is

1.    Explain what a CDO is
2.    Explain what is different about a synthetic CDO
3.    Explain how that matters for the fraud allegation

What is a CDO?

CDO stands for collateralized debt obligation.  The CDO is a separate legal entity, like a little corporation.  It borrows money.  That debt is backed by collateral.  The collateral is purchased with the money that was borrowed.  Although most any kind of asset can be purchased, the most common assets were mortgage backed securities. 

Governor Kulongoski reports that Federal Recovery Act continues to produce results in Oregon. $150 million in Recovery Act dollars funded approximately 5800 jobs in third quarter
By Governor Ted Kulongoski,

Salem – Governor Kulongoski announced today through Oregon’s third quarterly report on the American Recovery and Reinvestment Act (Recovery Act) that approximately 5800 jobs were funded through $150 million in federal investments during the last three months.  In addition to the jobs funded, the $150 million also funded investments in equipment and materials.

“This report demonstrates that the Recovery Act continues to help support jobs across the state for thousands of Oregonians during this difficult economic period,” Governor Ted Kulongoski. “From job creation and retention to direct assistance for families struggling to make ends meet, the Recovery Act continues to help Oregon as we begin to emerge from this latest recession.”

Washington State’s 2010 Tax Package
By Michele Radosevich, Garry Fujita, and Dirk Giseburt
Davis, Wright and Tremaine LLP

Every taxpayer in Washington will be directly or indirectly affected by massive changes to the Revenue Act of 1935, which is projected to raise close to $800 million in this biennium and over $1.6 billion in the next biennium.

The Washington State Legislature enacted the biggest set of changes to state tax law since 1993 – perhaps since 1935. Key was the final tax package, 2ESSB 6143, with major changes on many fronts.Some changes will affect nearly every taxpayer and others are discretely aimed at particular targets. The following are some examples:

* In the next twelve months, if you have a service business (there are few exception for hospitals and other service providers) you will likely see your B&O tax raised by 20% and in the aggregate, the service group will pay an additional $241 million dollars in new taxes.

Republican Sen. Judd Gregg, Dem. Sen. Ron Wyden team up for Bipartisan Tax Fairness and Simplification Act as seen on the FoxNewsChannel — April 14, 2010

Miller Nash LLP,
Oregon and Washington Law Firm
Written by Jeffrey P. Chicoine, Madeline Engel

If you start adding employees, do not miss this new tax incentive. On March 18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act, sometimes called the HIRE or New Hire Act. Of most immediate significance for employers is an exemption from paying the employer’s share of social security taxes for qualifying new hires. The Act applies to private employers, including nonprofits, and qualifying public universities and colleges.

Specifically, the New Hire Act exempts a qualifying employer from paying the employer’s share of social security taxes for a new hire (1) who “begins employment” after February 3, 2010, and before January 1, 2011, and (2) who certifies that he or she has not worked more than 40 hours in the past 60 days.

Gallup recently did a follow-up poll on Obama health care reform and whether the public mood has changed and what is the demographic of the support and opposition.  Below are some of the results.

Question: Congress recently passed legislation that restructures the nation’s healthcare system.  All in all, do you think it is a good thing or bad thing that Congress passed this legislation?

Reaction to Passage of Healthcare Reform Bill, by Party ID

This is an excellent video, please watch. The first 20 seconds are random before it kicks in and tells a compelling business story.

NFIB Small Business Legal Center fought for employers’ right to maintain a drug-free workplace
Oregon NFIB

Washington, D.C., April 15, 2010 — The National Federation of Independent Business Small Business Legal Center, the nation’s leading advocate for small business in our nation’s courts, today praised the Oregon Supreme Court’s decision to uphold the right of employers to maintain a drug-free workplace.  The case before the court was Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries of the State of Oregon. The court was asked to determine whether or not an employer should be held liable for an unlawful employment practice when the employer chose not to hire a temporary worker as a full-time employee after the worker disclosed that he would not be able to pass a drug test because he uses medical marijuana to treat his anxiety, nausea and vomiting pursuant to the Oregon Medical Marijuana Act.  Lower courts held in favor of the worker and found the employer liable for discharging the temporary worker because of a disability and failing to reasonably accommodate a disability.

The Secretary of State’s Office released an audit report on how the Oregon Revenue Department can capture over a $100 million in lost revenue from 66,000 targeted taxpayers who likely owe the state money. Below is the report.

From Secretary of State Audit Division

Oregon residents, and non-residents with earnings from an Oregon source, must file and pay personal income taxes when their income exceeds specified amounts. Oregon’s Department of Revenue (DOR) estimates that for tax year 2006, the state received more than 81% of personal income taxes due.

Typical penalties for not filing and paying tax liabilities can range from 5% to 100% of the total unpaid liability plus interest. DOR addresses tax compliance through education and assistance, auditing and verification of filed returns, as well as filing enforcement and collection activities. More recently, DOR identified several best practice strategies for increasing tax filing compliance that DOR would like to pursue, such as:

* Requiring tax compliance of businesses and individuals who contract with the state or who receive state-issued licenses; and

* Implementing immediate technology upgrades to better manage accounts, beginning to expand the capacity of the DOR website to allow taxpayers to resolve issues online, and exploring other data management and analysis systems.

Oregon successfully fought a more onerous bill in 2009
by: John Ledger
Associated Oregon Industries
Oregon’s largest business advocate

A vigorous effort is underway in California to put  Assembly Bill 32, the all-inclusive Greenhouse Gas (GHG) reduction measure passed in 2006, in the closet until the state has four consecutive quarters of unemployment at 5.5% or under (i.e., forever).   The restrictions to be placed on Californians by AB 32 are just starting to be realized. AB 32 delegates enormous authority to various state agencies to devise and impose GHG reduction mandates and penalties through rulemaking. The measures would not be limited to large power plants, but include every aspect of one’s life including private automobile use, buildings, transportation options, construction, and home heating.

By Bill Conerly,
Conerly Consulting, Businomics,

The committee that determines the beginning and ending dates for recessions still is not talking.  Actually, they issued a press release saying that there was nothing to say.  (Note: the date on the release is probably incorrect–these guys are not real good with dates.)

Let’s understand their issues.  The committee does not have a fixed decision rule, but they often look at four coincident indicators:

Several reports show continual problems with Oregon and Federal stimulus spending
By Oregon Tax News,

Oregon State officials boast more that the 2009 Legislature’s trumpeted economic stimulus package created or retained 7,500, a feat just shy of the 8,000-plus jobs reported for Oregon under the far bigger federal stimulus program. Yet, Oregon reports spending about $93 million so far compared with $1.3 billion. However, looks can be deceiving. Harry Esteve, of The Oregonian, reported that the average Oregon jobs created by the state stimulus lasted about two weeks and did little or nothing to dent the state’s bleak employment outlook. Unemployment was at 11.9 percent when the stimulus money started flowing in and still remains stuck at 11.5 percent. In addition, the state counted anyone working on a stimulus-related project as a job, regardless of whether the worker was already employed and in no danger of being laid off.

Federal stimulus spending requires more rigorous reporting of job numbers. Regardless of how many people are hired for a particular project, only the hours worked are counted, then translated into yearlong, full-time jobs. Hundreds of workers may have gotten a paycheck from a federal stimulus contract, but they’re not each counted as a separate job.