Issues
SBE Council Ranks the 50 States in “Small Business Policy Index 2016”…
– SBE Council
… the Small Business & Entrepreneurship Council (SBE Council) released its 20th “Small Business Policy Index 2016: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth.” The Index… ranks the 50 states according to 50 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.
The states that are most policy-friendly to entrepreneurs…are: 1) Nevada, 2) Texas, 3) South Dakota, 4) Wyoming, 5) Florida, 6) Washington…
In contrast, the policy environments that need the most work are: 40) Maryland, 41) Maine, 42) Iowa, 43) Oregon…
Raymond J. Keating, SBE Council’s chief economist and author of the study, noted… “…make no mistake, tax, regulatory, government spending and other governmental performance and cost measures…have real impacts not only on entrepreneurship, investment, small businesses and their workers, but naturally therefore, on the overall economy of each state.”…
We Respond & Your Comments
Oregon – A state with abundant natural resources, harbors, a navigable river emptying into the Pacific, good highways, international and regional airports, drop dead scenery and high quality of life. It should be a business mecca.
But it’s not. What went wrong? As the SBE Council makes clear, high taxes and heavy regulation are business killers.
Add to taxes and regulation the 4th highest minimum wage in the U.S. Then pile on a corporate gross receipts tax for companies with Oregon sales of $25 million or more (IP 28). Now you see how 30 plus years of tax and spend one party governance has taken what should be the number one state in just about any category and turned it into the #43 state for small businesses and entrepreneurs.
UO students, associate professor urge university to unload fossil fuel investments
By Diane Dietz The Register-Guard
University of Oregon student activists made their quarterly approach to the Board of Trustees on Thursday to urge divestment in fossil fuels, but this time they got backup from an associate professor.
Michael Dreiling of the sociology department pointed out that the students are honoring the science they learned in UO classes…
Senior environmental studies major Kaia Hazard — a week away from graduation — carried about 1,000 cards with signatures urging divestment…
Eric Jung, a senior in environmental science, biology and political science, said the university has a chance to “do the right thing” and “improve its image.”…
We Respond & Your Comments
We scratch our heads and ask ourselves “What are these ‘Stewards of the Earth’ hoping to accomplish with divestment of fossil fuel stocks? Would it make any difference to Exxon if every university sold every share?” No.
Here’s what none of these heavy-in-education-but pitifully-light-in-wisdom geniuses has noticed: every time a university sells a share of Exxon, somebody else buys it. All that’s changed is the owner, which has no effect on Exxon. In fact, by divesting, they’re eliminating any influence they might have on the evil entity!
Then we ask if it would make any difference if these Green Crusaders knew their crusade is meaningless. Sadly, we conclude they really don’t care. All they want is to perform the “beau geste” – an act that looks nice, feels good and accomplishes nothing.
Governor Still Won’t Say Where She Stands on Proposed Tax Increase but Will Say How She’d Spend the $3 Billion…
By Nigel Jaquiss, Willamette Week
Gov. Kate Brown is playing coy on Initiative Petition 28, the proposed corporate tax increase that will raise $3 billion a year in new tax revenue.
Brown, a Democrat, has been close to the public employee unions backing the measure for her 25-year political career—but she has repeatedly declined to take a position on the measure…
Today, Brown issued a page-and-a-half “Corporate Tax Implementation Plan” for the measure, suggesting ways the revenue could be spent…
Here’s the spending part:
The plan endows a new Career Pathway Fund that supports significant expansion of career and technical education…
Increase the number of students who complete high school with an industry credential…
Expands the Earned Income Tax Credit.
Expands energy assistance programs for low-income consumers
And here’s Brown’s attempt to make the measure less painful for Oregon employers:
Allows businesses subject to IP-28 to subtract a portion of Oregon payroll costs from their annual corporate tax obligation.
Offers investment incentives through the Oregon Growth Fund that benefit Oregon businesses.
Brown also proposed a carve-out for software companies that are located in Oregon but have extensive sales in other states…
We Respond & Your Comments
Why hasn’t Guv Kate endorsed IP-28? Because today it’s positioned as a tax. But Kate’s spending plan is the first step in repositioning it as help for “the kids” and “the poor.” So anyone opposing the tax is anti kids and anti poor. Kate, compassionate Liberal that she is, will then jump on the 28 bandwagon.
Once IP-28 passes Kate’ll start choosing winners. They’ll inevitably be those who support…Kate and her Dems. Willamette Week (above) says she wants a carveout for software companies. This isn’t in Kate’s current spending plan, but don’t be surprised if it pops up. Then other companies will start giving money to slop up at the “Carveout Trough.”
And there’ll be “investment incentives through the Oregon Growth Fund.” Translated: Pro Katers will get IP-28 relief for dumping your bucks into the State fund that picks more winners (read “contributors”) to lard your bucks onto.
Liberals are always compassionate. They’re always for kids and poor folk. Because there just ain’t no end to the good you can do with somebody else’s money.
Expanding OT
– Eugene Register Guard Editorial
When the Obama administration announced last Wednesday it was expanding overtime pay protection for more than 4 million workers, the reaction from the business sector was swift — and completely predictable.
Few employees will actually benefit financially from the change, they said. The new rule will add burdensome paperwork for both employers and employees, and make employees’ schedules less flexible, they said…
The Obama administration estimates that the change will increase affected workers’ pay by $1.2 billion annually over the next decade, but acknowledges that some employers may choose to reduce employees’ pay rates or hours to avoid having to pay them overtime…
Most of the employees affected by the new rule work in fast food or retail industries, where employees are designated “managers” and paid salaries instead of hourly wages, but do much of the same type of work as their hourly wage subordinates, who often earn nearly as much as their bosses while working fewer hours…
We Respond & Your Comments
Here we go again…“compassionate” Progressives want to take money out of some Americans’ pockets and give it to Americans (they really mean “voters”) of their choosing in the name of “fairness.”
Let’s review some iron clad rules of economics and business:
- When you increase the cost of anything (in this case labor) you reduce demand for it – no matter how “fair” it is;
- One of the few things in business you can control is the cost of labor;
- The average fast food restaurant shows a pretax profit of just 3%;
- Businesses don’t just stand there while government takes their money.
The Wall Street Journal (WSJ) reports how some business people are reacting to the new overtime threshold:
- Roadhouse, Inc. may reduce bonuses by 25% – 50% to put managers’ salaries over the threshold;
- Domino’s Pizza will cut back on overtime;
- The National Retail Federation (NRF) predicts businesses will offset these new costs by cutting benefits.
David French, NRF Senior VP of Government Relations said it best in the WSJ: “Just because there’s an overtime rule does not mean there’s going to be overtime pay.”
U.S. Government To Buy Up To 30 Million Pounds Of Blueberries To Combat Price Drop
– Andrew Galbreath, inquisitr.com
The U.S. Department of Agriculture plans to buy up to 30 million pounds of wild blueberries to help stabilize a drop in the price, ABC News reported on Thursday.
An unnamed member of Maine’s congressional delegation told the Associated Press that the agency will spend up to $13 million for the wild blueberries…
The government purchase came in response to a letter Maine’s congressional delegation wrote to federal agencies, saying the prices of frozen blueberries had fallen by as much as 50 percent in the last 5 years, and asking the government to buy the excess fruit for use in domestic food assistance programs…
Rep. Chellie Pingree from Maine defended the government’s action, saying it would provide a boost to the blueberry industry…
We Respond & Your Comments
Today we leave Oregon and visit The Pine Tree State for our lesson on Big Government.
We like blueberries. We know they have antioxidants that fight cancer. And we’d hate not to have blueberry farmers who supply them.
But markets reflect the relationship of supply to demand. In the case of blueberries there’s too much supply. So suppliers are hurting – maybe because they’re too many of them. But Maine’s blueberry farmers figured out a way to get Uncle Sugar to bail them out in what had become an inefficient market.
Question: When conditions for your business turned sour did the Feds bail you out? We didn’t think so. So why did they do it for the blueberry crowd? We’ll bet our blueberries that dollars and votes had something to do with it.
This is why so many voters this year are fed up with “Crony Capitalism,” where the government picks winners and losers based on dollars and votes and leaves us with the bill for their pandering.
Are Oregon Democrats backtracking already on the minimum wage?
Less than two weeks after Oregon’s minimum wage increase was signed into law, Democratic House Speaker Tina Kotek and Senate Majority Leader Ginny Burdick told the Portland Business Alliance they’ll propose changes to it next year, including lower wages for younger workers and trainees — according to a report in the Oregonian. Only, Kotek tells the Northwest Labor Press, that’s not accurate.
Kotek says there are no plans to adjust the wage scale that was put in place over the next six years. But she said legislators are willing to have conversations about a lower wage for trainees and young workers — as a solution to the problem of youth unemployment…
State Sen. Michael Dembrow and State Rep. Paul Holvey — both chairs of labor committees — say they plan to discuss a training and/or youth wage, but they also say other solutions to youth unemployment might be as good or better — like targeted tax credits or additional state support for youth work programs…
We Respond & Your Comments
Here’s “progressive” government at its best. First they pass something that “sounds good” – in this case higher salaries for “the little guy” – without thinking it through. Now, to make their first law work they need more laws – here it’s lower wages for trainees and younger workers.
Next they have to define “trainees” and “younger workers.” For that they’ll need hearings and rulings. And more laws. Who’s a “trainee?” “Younger” than what? Employers will lobby and donate bucks to extend the “trainee” period as long as they can and define “younger” as old as they can.
Next Salem will need a new department to find and punish employers who fudge on training periods and ages. They’ll land on some pizza parlor owner in Heppner employing a 45 year old “younger” 10 year “trainee” and make an example of him.
It’ll go on – new law after new law – ever increasing government meddling in business. After all, it’s the “Progressive” way.
Oregon’s new minimum wage will create ‘tough choices’ for public universities
– Andrew Theen, The Oregonian/oregonlive The Oregonian
As Oregon lawmakers celebrated passage of a historic minimum wage hike last week, leaders at each of the seven public universities were pulling out their calculators.
Oregon’s four-year universities collectively pay thousands of mostly student workers the minimum wage…
…Minimum wage [increases] will cost PSU [Portland State University] an estimated $2.5 million more during the biennium…
At the University of Oregon…the new wage will cost an extra $432,779 to implement during the 2017 fiscal year alone…
For the Beavers [Oregon State University], the extra wages due to students in the next biennium would be at least $4.8 million…
By the 2019 fiscal year, [OSU spokesman] Clark said, the school could look at reducing the number of student jobs by 650 to 700 positions to cut costs…
We Respond & Your Comments
As much as we hate to see kids lose jobs, especially when universities are raising tuition, we have to ask the kids, professors and administrators, most of whom were probably for the minimum wage hike, “Just what in the (insert your favorite word here) did you think was going to happen?”
It’s still Iron Rule of Economics #1: When you raise the price of something (in this case labor) you decrease demand for it.
We predicted this. Now we extract from our crystal ball two more predictions: 1) This is just the beginning; 2) By July 4 these universities will be begging the Legislature for a minimum wage exemption because “It’s just not fair to the kids.” Wanna bet against us?
Housing costs hit low-income households
– Peter Wong, Portlandtribune.com
Record-low vacancy rates, rising rents and a shortage of housing for lower-income people have combined to keep homelessness atop the public issues facing Washington County.
“We are developing market-rate housing to meet many of the needs of employees in the business sector,” said Annette Evans, homeless program coordinator for the county.
“But our aging population and people doing low-income sector jobs need a place to stay, too…”
Meanwhile, vacancy rates that once ranged from 5 to 7 percent have dropped to as little as 1.6 percent in Hillsboro…
“That gap (in affordable housing) has grown every year that our consolidated plan has been updated, and gets bigger,” Evans said…
The plan she referred to is “A Road Home,” which county commissioners adopted in 2008 with a 10-year goal of eliminating homelessness.
The plan has resulted in about $6 million spent annually in the county to cope with homelessness…
We Respond & Your Comments
So there’s a housing shortage in Washington County that’s hurting the poor, homeless, and elderly – people that “Progressives” say they want to help?
As usual, Progressives hurt these people and stick the bill for their foolishness to the rest of us. Let’s look at what they’ve done:
- Enforced a Metro Urban Growth Boundary that limits housing. As any non-Progressive knows, limiting housing drives up prices. But Progressives say expanding it would kill trees and little furry critters, warming Earth and killing polar bears. So they cling to their urban density religion – because little furry critters trump poor people;
- Increased the minimum wage…”Let’s help the poor by killing jobs.” Yeah – that’s the ticket!
- Raised taxes on businesses. If you’re starting a business, where would you go first: Idaho, Nevada, or…Oregon? Jobs? We don’t need no stinkin’ jobs!
And the gap in affordable housing “has grown every year that our consolidated plan has been updated.” Notice a pattern here?
Why They’re Suing
Linn Co., on behalf of Lane and 13 other counties, has informed Gov. Kate Brown of its intention to file a class action lawsuit against the State for more than $1.4 Billion of revenue lost due to the State’s mismanagement of Forest Trust Lands. Here’s why:
- During the 1930s and ‘40s Oregon counties acquired more than 654,000 acres of tax foreclosed forest lands;
- These lands were subsequently conveyed to the State as “Forest Trust Lands”;
- The State agreed to manage the Lands so as to maximize revenue, which, after deducting a management fee, would be passed to the counties which had previously held them;
- In 1998 the Oregon Board of Forestry unilaterally decided that the Lands did not have to be managed to maximize revenue but would instead be managed for their “greatest permanent value,” as defined solely by the State;
- In 2005 the Tillamook Co. Circuit Court declared that the State had a contractual obligation to ensure that “…the lands would be used to produce revenue”;
- The State’s appeal of this case was dismissed.
Linn County is now suing to recover forgone revenues resulting from the State’s decision not to manage the Lands to maximize revenue. If successful, Lane Co. could receive as much as $59 Million in damages and the assurance of a continued revenue stream which could be used for public safety, schools and other basic services.
Rural Oregon’s Lost Prosperity Gives Standoff a Distressed Backdrop…
– Kirk Johnson, New York Times
BURNS, Ore – One of the largest wood mills in the West once belched its steam on the edge of town, sawing ponderosa pine. Out in the woods, tree fallers like Tex Ward were proud and prosperous…
Times were once very good out here on the high desert of east central Oregon, and a place like Burns…In their heyday, Harney County and its largest town, Burns, were economically important…
What happened was a steep downturn, especially in the timber industry, which has all but disappeared. Oregon lost about three fourths of its timber mills between 1980 and 2010; Harney County lost all seven…
People like the Wards said that when environmental groups filed lawsuits and applied pressure at the State Capitol in Salem or in Washington, D.C., to reduce logging, forest managers just surrendered…
…the sense that government…no longer hears the voice of places like this echoes through the community…
We Respond and Your Comments
Rural Oregon has one county – Harney – and several more where families are hurting. Really hurting. It’s somewhere between difficult and impossible to find jobs. Employers are gone – with no hope of returning. Citizens see Salem as deaf to their cries.
So what’re the priorities of our Liberal (or Progressive, if you prefer) Oregon government? Let’s see:
- Affordable housing. But the problem isn’t housing. It’s that people either don’t have jobs or don’t have jobs that pay them enough to buy houses;
- Minimum wage. No – the problem is no wages at all.
- Not enough taxes on corporations. Yeah, that’s the ticket – let’s make it even more expensive for companies to create jobs.
We could go on, but you get the picture. While rural Oregonians are screaming for help in getting jobs into their counties, our “Progressive” legislators have lashed themselves to the mast of a rucksack of policies that not only won’t create jobs but will flatline many of those that are still stumbling along.