The Oregon Biz Report - Business News from Oregon

Business Employment Dynamics: Third Quarter, 2009
by Brooke Jackson-Winegardner
Oregon Employment Department

From June to September 2009, firms in Oregon that were newly opening or expanding added about 86,170 jobs. During the same time, firms that were cutting jobs or closing altogether shed about 93,230 jobs. The result was a net loss of 7,060 jobs over the quarter.

By Bill Watkins, Oregon Economic Forecast
California Lutheran University
Full Report here

Oregon is in for at least a couple of more years of economic challenge, and there is little that can be done in the short run. The United States economy will be very soft, and Oregon has the assets and liabilities it has. To paraphrase a former Secretary of Defense, you fight the recession with the economy you have. Unfortunately, Oregon’s economy, while certainly diversified from, say, 20 years ago, is still very tied to building materials and California’s economy. Given our forecast of real estate prices and construction, the building materials sector will likely recover far more slowly than in past recessions.

California’s economy is significantly worse than that of the United State economy, due in part to its massive home-price bubble, a result of over-investment in housing. California is also moving forward with public policies and regulations that are increasingly motivated by non-economic factors, some of which are economically costly and put the state at a competitive disadvantage.

Senator Baucus (D-Mont.) Speaks in Favor of 0% Capital Gains Tax Rate for Startups
By Joseph Wallin,
Davis, Wright, Tremaine LLP
NW law firm

[T]he United States Senate will resume consideration of the Small Business Jobs and Credit Act of 2010. The bill will exempt from capital gains tax gains on qualified small business stock acquired after March 15, 2010, and before January 1, 2012, and held for more than 5 years. The House has already passed this tax incentive.

By Patrick Emerson
Oregon Economics Blog

My little, but highly scientific, poll closed last night and 80% of you indicated that you favor more stimulus over austerity.  There has been a lot of debate in policy circles lately about what the appropriate policy should be right now, but it appears that the more stimulus side has the weight of evidence on their side at the moment.

By Valerie H. Sasaki
Miller Nash LLP,
Oregon and Washington Law Firm

One of the hallmarks of good tax policy is predictability in administration. Practically speaking, a taxpayer should be able to rely on the laws in effect when it files its tax return. The Internal Revenue Code adopts this approach in IRC § 7805(b), which prohibits any “temporary, proposed, or final regulation relating to the internal revenue laws [from applying] to a taxable period ending before the earliest of the following dates: (A) the date on which such regulation is filed with the Federal Register. (B) In the case of any final regulation, the date on which any proposed or temporary regulation to which such final regulation relates was filed with the Federal Register. (C) The date on which any notice substantially describing the expected contents of any temporary, proposed, or final regulation is issued to the public.” There are exceptions for situations in which the IRS is attempting to “prevent abuse” or “retroactively correct a procedural defect in the issuance of any prior regulation.”

End of Temporary Census Jobs Swells Oregon Job Loss
By Oregon Employment Department

In the new Health Care law is a new rule that requires a 1099 form for everyone a business pay more than $600 in a given year. The video below explains on the new rule’s difficult implementation.

U.S. Chamber Says Congress ‘Failed’ in Its Attempt to Reform Financial System
Vows to Use Regulatory Process To Prevent Strangulation of Credit
By U.S. Chamber of Commerce

WASHINGTON, D.C.—Following today’s Senate vote for final passage of financial reform legislation, U.S. Chamber of Commerce President and CEO Thomas J. Donohue said Congress had “failed” in its attempt to modernize a broken system, highlighting the massive new regulations and bureaucracies that may choke off credit to America’s job creators.   “Congress had a historic opportunity to fix a broken system and it failed,” Donohue said. “For years – long before the markets collapsed – the Chamber has called for modernizing our capital markets. Instead of fixing the system, Washington just piled bureaucracies and massive new regulations onto a broken system. This will only exacerbate uncertainty and jeopardize job creation.”

A recent Chamber study pointed out that this financial reform bill creates 533 required regulatory rulemakings, 60 studies, and 93 reports. By contrast, the Sarbanes-Oxley legislation passed in 2002 only had 16 rulemakings and six studies.

Oregon News Note:

NetApplications reports that Microsoft is losing key ground in the browser war as it watches it key browser, Explorer, drop 14% in market share.   At the same time Firefox share grew 5%, Google’s Chrome grew 6%, Apple’s Safari grew 2% and Opera by 1%.   These are not good numbers for Microsoft.  Security and new options have driven many users to leave Explorer for the new rising browsers.

By Dr. Eric Fuits,
EconInternational

In 2009, the administration’s economists promoted stimulus spending by putting out some bold projections of the impacts of the stimulus on U.S.

Unemployment. For example, the attached chart shows that the administration’s economists expected that, by now, the stimulus would have reduced unemployment to 7.3 percent.  Instead, the Bureau of Labor Statistics reports that employment is now 9.5 percent.  While the unemployment rate is lower than last month, this is because so many people have given up looking for work.  Those people are out of the labor force and do not count toward the most widely used unemployment number.

By Tim Duy,
Oregon Economic Forum
sponsor, KeyBank.

The Oregon recovery experienced headwinds in May.  The University of Oregon Index of Economic Indicators™ fell 1.4% to 87.9 (1997=100) from a revised April figure of 89.  Significant deterioration in Oregon employment services payrolls, Oregon residential building permits, and the interest rate spread contributed to the decline.

Highlights of the report include:

•    Labor market indicators were largely unchanged during March. Claims have improved dramatically since last year, but still remain elevated, while steady economic growth since last summer has had limited impact on new hiring.  

By Wayne D. Landsverk & Merril A. Keane,
Miller Nash LLP,
Oregon and Washington Law Firm

School is out, and summer internships are beginning across the Northwest. Employers might not be thinking about whether their unpaid summer interns qualify as employees under the Fair Labor Standards Act (the “FLSA”). After all, the intern and the employer are on the same page: The intern gets valuable experience, so there is no obligation to pay. Right . . . ?

By Oregon Tax News,

Oregon is one of a few states that dedicates funds, paid by Oregon employers, to cover unpaid wages when a company fails and does not have money for payroll. Last year, the average payout was about $1,048 per worker. The fund pays amounts equal to unpaid wages up to a maximum of $4,000. Several incidents in the mid-1980s, when employees of distressed companies learned that banks were ahead of them in collecting debts, led to legislation that established a fund to protect workers. Since its inception, Oregon’s Wage Security Fund has paid more than $16 million in benefits to more than 16,000 workers.

Press Release from the U.S. Chamber of Commerce

Data Exposes Concerns Among Small Businesses and Voters with Lack of Progress on Jobs

In advance of last Wednesday’s Jobs for America: Summit 2010, the U.S. Chamber of Commerce today released two surveys showing that small business owners and voters are deeply concerned about the impact government expansion and debt are having on job creation.

Portland Business Alliance Press Release

Government continues trend as top employer

Downtown Portland experienced an increase of 54 businesses and 393 jobs in 2009, but there is still a long road ahead to make up for 2008 when roughly 277 businesses and 3,000 jobs were lost. The greatest employment gains were seen in government, information and healthcare. Additionally, results from the annual Downtown Business Census & Survey show that for the ninth year in a row, a large majority of downtown business owners feel that downtown is clean and safe.

Governor Ted Kulongoski Press Release

Governor Ted Kulongoski recently announced $3 million in federal funds for three biomass energy projects in Oregon. These projects represent the seventh round of awards through the U.S. Department of Energy – State Energy Program. The program supports energy efficiency and renewable energy projects and is funded by the federal American Recovery and Reinvestment Act (Recovery Act).

Article by: J.L. Wilson

Associated Oregon Industries

New regulations limiting the ability of employers to use credit histories for prospective employees and job applicants began on July 1 with Oregon Labor Commissioner Brad Avakian marking the occasion by holding sessions of a special seminar on the topic in Portland.

The National Federation of Independent Business Index of Small Business Optimism lost 3.2 points in June falling to 89.0 after posting modest gains for several months*. The Index has been below 93 every month since January 2008 (30 months), and below 90 for 23 of those months, all readings typical of a weak or recession-mired economy.

Internet Sales Tax Draft Bill, the “Main Street Fairness Act”

by Joseph M. Wallin                                                                                        

If you are interested in knowing what Congress is up to with respect to allowing states to require out-of-state internet retailers to collect and remit sales tax, the latest bill making the rounds, the “Main Street Fairness Act” (the “Act”), is attached. You can find a summary of the bill here.

U.S. Chamber of Commerce Press Release:                                                                  

Lawsuits Cost Small Businesses $105 Billion, Study Shows

A new study released July 8th by the U.S. Chamber Institute for Legal Reform (ILR) shows that small businesses shoulder a tremendous burden of the nation’s tort liability costs, having paid $105.4 billion in 2008.