On balance, legislative ideas would leave small businesses in the red: Editorial Agenda 2015

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Oregon legislators and Gov. John Kitzhaber were sworn in at the Capitol in Salem on Jan. 12.

(Michelle Brence, The Oregonian/OregonLive)

The 2015 legislative session, which starts Monday, looks a lot different from a business point of view than the last full session in 2013.

In 2013, the economy still was recovering from recession and business was a priority. In December 2012, Gov. John Kitzhaber had hastily called a special session to adopt "tax certainty" legislation for Nike, the largest Oregon-based public company. The Nike bill not only shined a light on business but also created momentum to do more for small businesses that lacked the clout to prod the governor into calling a special session. By the end of the regular session, the Legislature had created a small business task force. And in a summer special session, the Legislature approved a lower tax rate for S corporations and some partnerships as part of the "grand bargain" that included Public Employees Retirement System reforms.

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Editorial Agenda 2015


Make Portland a city that works
Get pot right
Smart choices for education
Help rural Oregon
Keep people and goods moving
Foster small business growth
Track health reforms
_______________________________

In 2015, Oregon's economy has regained the jobs lost during recession and Democrats have an even stronger majority in the House and Senate. And Democrats' pre-session agenda reads more like a horror story than a wish list from a business perspective – and especially for small businesses. Raise the minimum wage. Require paid sick leave. Create a new state retirement plan that small businesses have to offer employees. Increase the cost of fuel through new taxes and standards.

"I'm not sure we've even calculated what the cost of all that is," House Republican Leader Mike McLane of Powell Butte said of the Democratic legislative agenda. How much the proposals would affect individual small businesses varies according to businesses' size, location and products, among other factors. But McLane has reason to worry about the cumulative effect, especially for businesses outside the Portland metro area. If all the proposals became law, they would have an aggregate impact that would squeeze the profits of many businesses that would not be in a position to pass along increased costs to customers.

The big-ticket bills will attract much of the attention in this session and will keep business lobbyists on the defensive. But the lack of proposed legislation that could help businesses also is problematic. After all, in a perfect world businesses could provide increased pay and benefits to workers while also maintaining reasonable profits. Legislators who would like to see that happen should be concerned about helping businesses thrive. But few of the bills filed before the start of the session directly attempt to make it easier for businesses to operate and earn a profit.

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As usual, Business Oregon, the state's business development agency, has proposed a handful of bills. The most promising, House Bill 2434, would establish a program to promote transformative natural resource technology such as advanced agriculture and wood products. The program would start small but is a much-needed proactive step to emphasize emerging industries with a potential to help struggling rural economies. Another Business Oregon proposal, House Bill 2435, would target so-called "last mile" infrastructure needs in rural areas to create suitable sites for business and industry.

Rep. Tobias Read, D-Beaverton, also has pitched a number of business-related ideas, some of which are placeholder bills to be refined later. The best of the batch, co-sponsored by Republican Rep. Mark Johnson of Hood River, is House Bill 2728, which would create the Oregon Talent Council. Much like Business Oregon's transformative technology proposal, the goal would be to help Oregon better capitalize on high-promise emerging industries. One of the council's key missions would be to help foster a climate for educating and training workers for those industries.

Those are the most intriguing ideas that have been teed up as the session begins, and they are not nearly enough to offset the potential bottom-line effect of the big-ticket bills that would increase businesses' operating costs.

Some of the Democratic priorities – increasing retirement savings, for example – have merit. But the details can make the difference between a plan that boosts the economy and one that becomes a drag. At the least, high-cost mandates should carry exemptions for businesses that are too small to absorb extra paperwork or the cost and logistics of mandatory sick leave. And legislators need to remember that just because something – say, a $3-to-$6-an-hour increase in the minimum wage – sounds good doesn't mean the end result would be desirable. After all, sub-$15-an-hour wages don't exist only in the private sector. Government costs would go up, too.

New ideas undoubtedly will emerge as the session progresses. If the Legislature really does want to help small businesses, as most candidates say they do when running for office, those ideas will have to be better than the ones currently on the table.

--The Oregonian/OregonLive editorial board

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