Capitol Connect WP image

OBI Launches Coolest Thing Made in Oregon Contest

Oregon Business & Industry, in partnership with Here is Oregon, has launched the annual Coolest Thing Made in Oregon competition to celebrate the state’s vibrant and innovative manufacturing sector.

Choosing just one product won’t be easy. Oregon’s manufacturing sector employs more than 214,000 people and contributes $33 billion annually to the state’s gross domestic product, according to a 2021 ECONorthwest study funded by OBI. You don’t get numbers like this without manufacturing a lot of things, in terms of both volume and variety.

So how will the contest work?

Nominations, which can be made by manufacturers or any member of the public who is a fan of an Oregon product, will be accepted until Aug. 15. In September, a panel will publish a Coolest Thing Made in Oregon bracket featuring 16 of the nominated products. From there, the public can participate in a series of online votes that will shrink the field until one product earns the title of “Coolest Thing Made in Oregon.”

You can learn more about the contest on OBI’s website and by visiting the nomination page.

The Coolest Thing Made in Oregon competition is one part of a broader effort to promote Oregon’s manufacturers this year. The initiative includes the annual Manufacturing and Innovation Roadshow (Oct. 2-4) and an Oct. 6 Manufacturing Day celebration at which OBI will present the inaugural Manufacturer of the Year awards.


Salem City Council to Consider Employee Payroll Tax

Salem City Council has scheduled a June 12 informational meeting on an ordinance that would impose an employee payroll tax of 0.814%. City Council tentatively plans to hold the first public hearing on June 26 and approve the tax at its July 10 meeting. It would become effective as early as July 1, 2024.

The tax would apply to all wages for work performed in the city, including self-employment earnings, though it would not be imposed on people making the minimum wage.

According to the city, taxpayers would contribute an additional $28 million per year, which would be used to support an array of existing and new services. The city argues that the tax is necessary because existing funding sources, including property taxes, aren’t increasing as quickly as the cost of government services. The city also believes new revenue will be needed to support services for the homeless.

Under the proposed ordinance, the tax would be referred to voters no later than July 1, 2031, after it had been in effect for a number of years. Under the proposal, voter approval would be required to continue the tax after that point, though Salem City Council could decide to change the ordinance and eliminate the referral before then.

For more information about this proposed tax, read the city staff report here and the text of the proposed ordinance here. For information about the Council’s agendas, how to watch meetings and submit comments on the tax and other topics, go here.


Legislative and Rulemaking Updates

Climate Package: A work session was held June 8 on HB 3409, a climate funding package, in the Ways and Means Joint Subcommittee on Natural Resources. The omnibus package is a hodgepodge of ideas found in other bills and proposals throughout the session. It contains more than a dozen climate-related bills including medium- and heavy-duty electric truck incentives, more aggressive greenhouse gas reduction targets, funding to implement aspects of the Climate Protection Plan and major revisions to state building code. OBI has opposed many of the bills included in the package because they continue to put policy ahead of available technology, supply and infrastructure. The bill is scheduled for a work session in the full committee June 12.

CAT Hearing: On June 6, the Senate Finance Committee held a hearing on SB 140 and several proposed amendments. While most of the proposed amendments were innocuous technical changes, the -3 amendment would make substantive and troubling changes to the corporate activity tax. The amendment would raise the exemption to $2 million (from $1 million), which is good if it did nothing else. However, because the change was designed to be revenue neutral, it would lower the cost of goods sold and labor cost carveout to 30% (from 35%) and raise the CAT rate to .615% (from.57%, an 8% hike) for companies with Oregon “activities” above $10 million. Because the proposal is revenue neutral, Legislative Counsel determined that the bill could pass with a simple majority and not require the three-fifths vote normally needed for tax increases despite the fact that the amendment would raise taxes on thousands of Oregon businesses. There was substantial opposition to the amendment from industry and association partners, and OBI was pleased that the amendment seemed to gain no traction in the committee. OBI will continue to watch this closely as negotiations take place and as the session inches closer to adjournment.

Bridge Replacement: Questions loom over the fate of the Interstate 5 bridge replacement project. Oregon still needs to fund its $1 billion share of the project this session to be eligible for key federal grant funding opportunities. Last week, Sharla Moffett wrote a letter signed by more than 40 stakeholder organizations and sent to the Joint Committee on Ways and Means co-chairs. The letter urges them to pass a $1 billion funding package. OBI hopes that Oregon will pass a funding commitment as part of an end-of-session or a special session negotiation. Until this happens, OBI remains concerned that approximately $3 billion in federal funding will evaporate.

Early Learning Budget: The House passed several budget bills last week, including two important education budgets. The first, HB 5013, would fund the relatively new Department of Early Learning and Care. The department’s biennial budget would be $1.3 billion funded through a combination of general funds ($474 million), federal funds ($381 million) and other funds ($457 million). This is a modest $8 million increase from the current biennium. The other funds identified are from the Student Success Act’s Early Learning Account. As we enter another biennium with the CAT in place and money from it dedicated to education, OBI will do a deep dive into how collections vary from early estimates and where the money is going.

State School Fund: The House also passed the State School Fund, HB 5015. This bill would increase state K-12 education funding to $10.2 billion for the 2023-25 biennium, an increase of $900 million (9.7%) from the current biennium. That $10.2 billion includes general fund ($8.8 billion), lottery funds ($647 million), Student Success Act (CAT) funds ($702 million), marijuana tax revenue ($41 million), and state timber tax revenues ($600,000). The $10.2 billion does not include local funding, mostly through property taxes, and some other state, federal and categorical aid. All-in, the K-12 fund should be about $15.3 billion before specific additional carve-outs, which do not affect the funding formula’s distributions to district.

Retail Theft: When SB 318 was assigned to the Public Safety Subcommittee of Joint Ways and Means Committee, OBI and the other members of the Organized Retail Crime Task Force were optimistic the bill would swiftly be scheduled for a subcommittee vote and then a full committee vote. However, the bill has stalled in the subcommittee. SB 318 is the final piece of the Organized Retail Crime Task Force’s three-bill package. This one would fund an analyst and two investigator positions in the Department of Justice to coordinate statewide prosecution of organized retail theft. Although it’s stalled, it may still pass. The session isn’t over yet. And it may become part of any end-of-session or special session negotiations and thus make its way into the so-called “Christmas Tree” bill that will provide funding for various programs and projects.

Leave Alignment: Gov. Kotek on June 7 signed SB 999 into law. SB 999 ensures Paid Leave Oregon and the Oregon Family Leave Act run concurrently, use the same definitions when determining who is a family member and align benefit years and job protection requirements. As OBI has noted before, the bill is just a first step. A lot of work remains to consolidate these leave programs to truly make them manageable for employers, employees and state agencies. OBI is hosting a webinar on Paid Leave Oregon on Aug. 4 to help educate employers about the changes and last-minute details as the program begins offering benefits in September. Please look out for a future email from Derek Sangston asking for any question you want addressed during that webinar.


Notable News

Walkout Negotiations: Negotiations to end the walkout by Senate Republicans intensified last week and involved more than 10 hours of talks over the weekend, Oregon Public Broadcasting reports. A framework for the deal has been developed, but it must be approved by rank-and-file lawmakers, according to OPB, which reports that the framework includes an agreement by Senate Democrats to scale back HB 2002 a controversial reproductive health care bill. The walkout began May 3 and is the longest in Oregon history.

Liquor Surcharge: Gov. Kotek has dropped her request for a liquor surcharge of 50 cents per bottle, The Oregonian reports. On June 7, her office sent a letter to the Oregon Liquor and Cannabis Commission saying the surcharge is no longer necessary, as there likely will be enough revenue without it to fund mental health and addiction services.

5th District Seat: Three prominent Democrats say they’re interested in seeking Oregon’s 5th Congressional District seat in 2024, according to Willamette Week. Republican Lori Chavez-DeRemer defeated Democrat Jamie McLeod-Skinner last year to win the seat even though Democrats hold a 24,000-voter registration advantage in the district. Proclaiming themselves interested in seeking the seat thus far are McLeod-Skinner, Metro Council President Lynn Peterson and state Rep. Janelle Bynum, D-Happy Valley.

DEQ Lawsuit: Oil refiner HF Sinclair has gone back to court in an attempt to secure the credits needed to import fuel into Oregon under the state’s greenhouse gas emissions reduction program, the Portland Business Journal reports. DEQ distributes compliance instruments – credits – to cover emissions related to imported fuels. The agency bases credit distribution on past import levels. In late 2021, Sinclair bought the Puget Sound Refinery in Washington, which has produced as much as 20% of the transportation fuels imported by Oregon. However, previous owner Shell maintains ownership of the credits. Sinclair lost a court fight to secure the credits two months ago and is now seeking judicial review.

Ashland Gas: Ashland City Council on June 6 directed city staff to create an ordinance barring natural gas hookups in new residential construction, The Oregonian reports. Eugene adopted a similar ordinance in February. An April federal appeals court decision jeopardizes Eugene’s ordinance, as does a successful effort to place repeal of the ordinance on the November ballot for city residents to decide. Ashland is looking at options that would avoid the legal challenges mounted in other jurisdictions.

Fagan Investigation: The U.S. Department of Justice has issued subpoenas to five state agencies requesting information about former Secretary of State Shemia Fagan and the co-founders of the troubled La Mota cannabis chain, Willamette Week reports. Fagan resigned in May when Willamette Week revealed that she had been working on the side for an affiliate of La Mota. The state agencies receiving subpoenas are the Oregon Liquor and Cannabis Commission, the Departments of Administrative Services and Revenue, the Secretary of State’s Office and the Oregon Government Ethics Commission. Meanwhile, The Oregonian reports, Fagan regularly brought her family along on state-paid business trips despite being told by agency staff that doing so may violate state travel rules.


OBI Member Profile: Daimler Truck North America

Few companies illustrate the innovative capacity of Oregon’s manufacturing sector more clearly than Daimler Truck North America, which has produced big rigs in Portland since the 1940s. These days, the company is garnering attention for its work on trucks that run on alternative fuels and even operate autonomously. Decades ago, it was making waves for its use of lightweight aluminum.

The pursuit of efficiency played a significant role in the company’s foray into manufacturing. In the 1930s, Leland James, president of his own shipping company, Consolidated Freightways, asked manufacturers to consider using aluminum rather than steel to make trucks lighter and able to haul heavy loads in the mountainous Pacific Northwest. They weren’t interested, so he decided to do it himself by establishing the company that would come to be known as Freightliner. Its Portland manufacturing facility opened in 1947.

Daimler Truck continues to manufacture vehicles in Oregon, including its heavy-duty Western Star line and its cutting-edge electric trucks. The company’s headquarters remain in Oregon, and all of its reliability and durability testing occur at the High Desert Proving Grounds in Madras.

Go here to learn more about Daimler Truck’s history in Oregon, its longstanding pursuit of efficiency and its commitment to produce only vehicles that are carbon-neutral in driving operations for its core markets by 2039.


Aug. 4 Webinar on PFML Program Changes

Employees will soon be able to file requests to receive benefits under Oregon’s paid family and medical leave insurance program, Paid Leave Oregon. Meanwhile, the Oregon Legislature this year made several statutory changes to bring Paid Leave Oregon into better alignment with the Oregon Family Leave Act.

In other words, there’s a lot for employers to know before Sept. 3, when Paid Leave Oregon benefits begin.

To bring employers up to speed, experts with the Oregon Employment Department will provide an overview of the program, discuss updates and answer questions on Aug. 4. The online webinar will run from 10 a.m. to 11 a.m.

The webinar is supported by OBI’s CompSAFE program, which helps qualifying businesses save on workers’ compensation insurance through a partnership with SAIF, Oregon’s not for profit provider of workers’ compensation insurance.

Go here to register.


OBI Members Can Save on Furniture, Supplies and Services with New Benefit

Whether your business wants to save on office furniture, cleaning supplies or remote working technology, OBI’s partnership with ODP Business Solutions can help.

After setting up an online account, OBI members can shop for a wide range of goods and services and even receive free next-business-day delivery on qualifying orders of $50 or more. To make the process as simple as possible, ODP provides experienced account managers and a range of payment options, including single account billing and consolidated billing for multiple locations.

Go here to learn more about this benefit and register for an account.