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Oregon Business Association

Business and Finance

Upcoming meeting: Tuesday, April 29th. “Medical Marijuana” with Gary Conkling representing Associated General Contractors, Dan Harmon of Hoffman Construction and Andrea Meyer from the American Civil Liberties Union.

The Oregon Business Association believes that a healthy business environment throughout the state is essential to attract and retain businesses, provide stable employment to citizens and a strong financial base for the state. A streamlined regulatory system and a stable economy are part of a healthy business environment, as well as a political climate that encourages collaboration between business, citizens and the Legislature to work on the preservation and expansion of the principles and amenities that have made Oregon great.

Revenue Stabilization

Oregon’s revenues are extremely volatile; 89% of our general fund revenue is from one source: personal income taxes. Personal income taxes vary widely based on our economy. However, our expenses for education, health care, and public safety are essential whether our economy is up or down.

Specifically, OBA supports:

Creation of a rainy day fund equal to 10% of the biennial general fund budget

Except in times of recession, the state has historically had an ending fund balance that is carried over to the next biennium. OBA proposes using the ending fund balance to build a rainy day fund. OBA recommends the following conditions for the fund:

  • The dollar amount transferred to the ending fund balance from the general fund could not exceed 2% of the biennium’s general fund;
  • The fund should be capped at 10% of the general fund; and
  • Specific economic conditions must be met in order for the fund to be used and safeguards should be put in place to ensure these conditions are followed.

Revenue Enhancement

Oregon’s revenues are not adequate to support basic needs of Oregonians. We are underinvested in education, transportation, health care and in levels of investment in economic development compared to other states. We are hard pressed to save money when our economy is thriving because of our kicker law, a unique provision that requires the state to give money back to taxpayers when our actual revenues are above projected revenues. We support diversifying and increasing our sources of revenue on a permanent basis so that we can provide essential services to Oregonians.

Specifically, OBA supports:

  • Suspend Corporate Kicker. OBA supports a constitutional amendment to eliminate the corporate kicker in the future. In addition, OBA supports keeping the 05-07 kicker and investing in a rainy day fund or a key Oregon priority such as capital costs related to higher education.
  • Increase the Corporate Minimum Tax. The corporate minimum tax was established in 1931 with a minimum of $10.00. It hasn’t been increased since that date. We believe that every corporation receives benefit from their incorporation within the state of Oregon. We support updating the current tax rate with a graduated minimum rate, based on gross revenues. C-corporations, not S-corporations, will pay this increase.
  • Increase Beer and Wine Tax. OBA supports an increase in the beer and wine tax to a level that would bring it to the median of other states.

Business Development and Investment

Oregon’s citizens need jobs and Oregon’s business community needs strategic state investments. OBA supports efforts, such as the Oregon Business Plan, that create a strategy for focused investments in business “clusters” that are specifically tied to Oregon’s unique attributes. Some of Oregon’s strengths include our capacity to attract creative and enthusiastic young people, our agricultural base, our reputation and experience in “sustainable” businesses and the strengths of our university-based research departments. Key economic sectors are food processing and forest products. We need a focused strategy to build on those strengths.

Specifically, OBA supports:

The Oregon Innovation Council’s stimulus package

The Oregon Innovation Council, a statewide public-private advisory council, recommends a stimulus package of up to $40 million to be invested by the state by 2009. The package is based on a strategic assessment of Oregon’s strengths and is based on the Oregon Business Plan. The investments are focused on key Oregon “clusters” including food processing, manufacturing, alternative energy and sustainability, nanoscience and health care research. Up to $40 million will be invested in the following areas:

  • Food Processing. The investment will help companies find new ways to develop, package and market Oregon products. The food industry represents 16% of the state’s employment and a $20.6 billion industry for the Northwest economy.
  • Wave Energy. The investment will support development of the nation’s first commercial-scale wave-generation park on the Oregon coast. The investment will promote job growth and renewable energy.
  • Manufacturing. The investment will support workforce development programs and applied research.
  • Signature Research Centers. The investment will provide continued support for micro technology, sustainability and development of new drugs for disease development. University-based research centers will create new technologies that have commercial applications relevant to key Oregon economic clusters.

Investment Tax Credits

Investment tax credits are an economic stimulator providing incentives for businesses to invest in the Oregon economy. The credit would be awarded for capital improvement costs (machinery or other equipment, or facility costs). The credit should be designed to maximize utilization by small businesses and attract a broad base of participants by capping the amount for each recipient. The overall credit should not exceed $30 million.

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