work small

OBI this week released the results of a survey involving hundreds of small businesses in Oregon. Only 18% of participants said they believe lawmakers care about their success. Bills like SB 159 are why, as OBI’s Derek Sangston explained to the Senate Committee on Labor and Business Feb. 14.

SB 159 would give preferential treatment in public contracting to nonprofit organizations. Though well-intended, this would be misguided. Existing preferential contracting statutes plant a policy flag such as a desire to support goods made in Oregon or those made with recycled material. The policy flag in this case signals to thousands of Oregon’s businesses, large and small, that they are less worthy of the state’s business simply because of how they’ve chosen to organize.

The preferential treatment granted by SB 159 would apply as long as the goods and services provided by a nonprofit cost no more than 10% more than goods and services provided by competing businesses. Oregon’s state business tax burden has increased nearly 45% since 2019, national accounting firm Ernst & Young has found. SB 159, in effect, would use escalating taxes generated by state businesses to pay extra for work from which those very businesses effectively might be barred.

The fact that 82% of small businesses surveyed by OBI believe lawmakers don’t care about their success should worry the sponsors of SB 159 and their colleagues in the Oregon Legislature. Passing SB 159 would validate businesses’ worries.

Read Sangston’s full testimony here.