Capitol Connect WP image

OBI Releases Growth and Innovation Roadmap

OBI this week released its inaugural Oregon Growth and Innovation Roadmap, which identifies dozens of policy and regulatory reforms that will enhance the state’s competitiveness.

Oregon’s longstanding reputation as a good place to live, work and do business has begun to suffer. Employers face soaring state and local taxes, an eroding regulatory environment, rising crime, a shortage of developable land and other problems that have compromised the state’s ability to attract and retain employers.

To reverse this trend, the Roadmap focuses on three broad areas:

Economic Vitality: From prioritizing economic development to expanding the supply of developable industrial land, these recommendations will help Oregon create the right conditions for employers to generate jobs, prosperity and critical tax revenue.

Stronger Workforce: These recommendations will make it easier for Oregonians to find jobs and for employers to find well-trained workers. Among other things, they seek to expand access to child care, address housing shortages and simplify leave laws whose complexity affects employers and employees alike.

Fewer Barriers to Success: These recommendations address the growing complexity of Oregon’s regulatory environment, which has had a chilling effect on business investments in the state. Recommendations include the creation of a business ombuds office, the elimination of moving-target permitting, the creation of a health care mandate review board and more.

The Roadmap was developed in consultation with scores of employers throughout the state. OBI’s policy team will be working with legislators and other elected officials during the 2023 legislative session and beyond in support of many of the Roadmap’s elements.

Learn more about the Roadmap here.


Notable News

Multnomah County Capital Gains Tax: Supporters of a 0.75% capital gains tax in Multnomah County are one step closer to placing their measure before voters. They have submitted 33,575 signatures to place the initiative on the May 2023 ballot, The Oregonian reports. Just under 22,700 valid signatures are required to qualify. If approved for the ballot and passed by voters, the measure would establish a tax on all capital gains for county residents, effective for the 2023 tax year. Revenue would finance legal services for people being sued under eviction proceedings.

Portland Diesel Ban: The city of Portland will phase out petroleum-based diesel fuel by 2030, requiring diesel sold in the city to contain an increasing percentage of biodiesel starting in 2024. According to The Oregonian, Portland City Council voted unanimously in favor of the ban on Dec. 7.

Milwaukie Gas Ban: Milwaukie City Council on Dec. 6 adopted a resolution directing city staff to develop code changes prohibiting the connection of gas pipes to any residential building after March 1, 2024, the Portland Business Journal reports. The Eugene City Council is considering a similar ban on the use of residential natural gas.

Bend Home Energy Score: The Bend City Council on Dec. 7 voted to require the preparation of home energy scores when homes are sold, beginning July 1. The scores are expected to cost up to $300 to complete, KTVZ reports.

Gov.-elect Kotek Names Chief: Gov.-elect Tina Kotek has named a chief of staff. According to The Oregonian, Kotek has chosen Andrea Cooper, who managed Gov. Kate Brown’s 2018 reelection campaign and currently serves as Brown’s deputy chief of staff.

Portland Employees: Portland Mayor Ted Wheeler will require city employees to work at least half-time in person, beginning next spring. According to the Portland Business Journal, city workers have been reluctant to return to the office, and about 40% work in-person only one day per week.


How Boardman Foods Created a Community Child Care Program

In 2004, Boardman Foods created a licensed after-school program at its Morrow facility for the children of employees.

The company now administers a full-day child care program at the Port of Morrow’s Neal Early Learning Center that serves scores of families throughout the community.

How and why did Boardman Foods transform its on-site program into an off-site program that provides affordable care to the children of many families that don’t work for Boardman at all?

The answers to that question include the COVID pandemic, the generosity of many area employers, the cooperation of state and local public agencies and, of course, the determination of Boardman Vice President for Operations Debbie Radie, who set up the original after-school program nearly 20 years ago.

Read more about Boardman Foods’ child care story here.

In October, by the way, Radie received the American Frozen Food Institute‘s inaugural Woman of the Year award.


Policy Update

Legislative Days: OBI’s policy team monitored and participated in this week’s Legislative Days, a three-day stretch of committee meetings devoted to informational hearings and invited testimony. On Dec. 7, Scott Bruun, OBI’s director of tax, fiscal and manufacturing policy, discussed Oregon’s tax structure during a meeting of the House Interim Committee on Economic Development and Small Business. He was joined by Ernst & Young Senior Manager Caroline Sallee, who helped produce OBI’s recently released study of recent trends in Oregon’s state and local business taxes. You can watch a recording here. Topics discussed during other meetings include housing needs, the state’s controversial Climate Friendly and Equitable Communities rule and universal health care. Below are a handful of notable committee meetings:

Senate Labor and Business: The committee met briefly on Dec. 7 to introduce eight placeholder bills as committee bills. All were “study bills” introduced purely for the broad relating clauses to be available to the committee if needed during the 2023 session.

House Business and Labor: The committee had a full agenda and introduced nine bills on Dec. 7. One significant focus involved wage payments in construction. The NW Carpenters Union presented background on the issue of subcontractors not paying employees wages owed. The committee introduced a bill that would make a contractor liable for any unpaid wages that a subcontractor owed to an employee. The bill also would require subcontractors to provide certified payroll reports. The committee also heard from Attorney General Ellen Rosenblum’s office about the broad consumer privacy concept her agency is bringing forward in 2023. The bill is still being negotiated but generally is the result of a multi-year task force the AG staff brought together to design a new consumer privacy policy.

Senate Energy & Environment: Oregon DEQ discussed the Truth in Labeling Task Force, which met over the spring of this year and discussed proposals to require products sold in Oregon to identify clearly whether packaging is recyclable and to eliminate the “chasing arrows” symbol. The task force report was provided to the committee, and the committee introduced a placeholder bill to address recyclability claims.

Revenue Forecast: The state’s quarterly revenue forecast, released Nov. 16, predicts slowing economic output and tax collections over the longer term. In the short term, however, economic output and anticipated revenue continue to exceed expectations. Tax revenue is expected to exceed September’s estimate by $421 million, generating higher ending balances for the current biennium and a bigger kicker payout in 2024. The baseline General Fund revenue outlook for the 2021-23 biennium is now expected to be $4.97 billion ahead of the 2021 “close of session” forecast, which was used for the current budget. However, the state expects General Fund revenue for the 2023-25 biennium to fall $3 billion short of the current biennium. Economists also predict a personal income tax kicker of $3.68 billion to occur in 2024. Go here for more information.

Paid Leave Oregon Headcount: OBI’s Paloma Sparks succeeded in convincing the Oregon Employment Department to reconsider the way it counts employees for Paid Leave Oregon, the state’s paid family and medical leave program. The state’s recently adopted temporary rule requires employers to calculate the average number of employees on a 12-month backwards-look basis. The count will be based on the number of people employed on the 12th of every month. While OBI still has some concerns, such as including out-of-state employees in the count, this rule is far better than the previous version and ensures that small employers will benefit from the provisions in the law intended to mitigate the effects of paid family and medical leave. The department’s prior interpretation would have significantly overestimated headcount, particularly in businesses with higher turnover or seasonal fluctuations. For more information about the program, visit OBI’s Paid Leave Oregon resource page.

Air Permitting: The Environmental Quality Commission adopted a 711-page air permitting rule package on Nov. 18. You can read it here. As expected, the adopted package is a scaled-down version of the one proposed in May. Even in their scaled-down form, however, the new rules will increase the cost and complexity of permitting. Meanwhile, the Department of Environmental Quality has indicated that it intends to revisit some of the concepts that had been dropped from consideration. OBI expects the conversation on these concepts to resume within the next 12-18 months, and potentially sooner.


Paid Leave Oregon Contributions Will Begin in January

Employers participating in the state-provided Paid Leave Oregon plan will submit payroll tax contributions beginning Jan. 1.

Paid Leave Oregon refers to the paid family and medical leave insurance (PFMLI) program the Oregon Legislature adopted in 2019. It will take effect in 2023.

The program will provide paid time for family, medical and other reasons. These include the care of a newborn or adopted child, recovery time following serious illness or injury, and leave for victims of sexual assault, domestic violence, harassment or stalking. The program provides up to 12 weeks of paid leave per year.

The program will be funded by a tax on wages. The initial rate will be 1%, of which employees will pay 60%. Employers with at least 25 employees will pay the remaining 40%. Smaller employers will not be required to contribute, though they will have to collect and submit employee contributions.

Most employees seeking paid leave will apply to the state, which will administer Paid Leave Oregon. However, employers that don’t want to participate in the state program may provide equivalent plans offered by insurance companies.

On Sept. 3, employees can start applying for benefits.

For more information about Paid Leave Oregon, visit OBI’s Paid Leave Oregon resources page, which provides access to recorded webinars, rules, fact sheets and other material.


Member Highlight

Alaska Airlines: Alaska Airlines in November became the first airline in the United States to launch an electronic bag tag program. The program allows guests to tag their own luggage through Alaska’s mobile app before they reach the airport.