Robert Grossman, Professor of Management Studies at Marist College shared a very applicable analogy to the issue of workforce shortages in his presentation to those attending the seminar.

Paraphrasing his comments, Grossman related the issue to the sport of fishing with the business owner or manager acting as the fisherman. In summary, the fish pond holds great possibility and diversity. Some fish move quickly with bright colors and are easier to catch than others. Some prefer the bottom of the pond and avoid the bait intentionally while others swim in the middle of the pond avoiding attention.

As it relates to workforce opportunity, Grossman encourages employers to consider salvaging the bottom fish. Talents and skills exist in all areas of the fish pond and the trick is harnessing it. Also, consider growing your own hatchery. Companies including Disney now sculpt and mold their employees more than ever before through strategic training programs. In addition, mix the fish to keep the pond balanced and healthy. Take advantage of the strengths within your employees and let them feed off of each other for efficiency purposes. And last but not least, consider fishing somewhere else where the fish are easier to catch.

Other suggestions that may help business as suggested by panel guests at the seminar include the following:

Embrace the growing Latino population
At this time, 1 in 5 young adults (ages 25-34) living in metro areas across the United States are Latino. Consider youth programs like the one currently operating at Don Pancho Authentic Mexican Foods that enables youth of diverse backgrounds ages 17-19 to gain valuable entry-level production experience. Partnering with the Salem Chamber’s E-3 Coordinator Cori Clausen is a positive first step to creating an opportunity in your company for your future workforce. A youth program can help you identify future leadership, help demystify your industry, and ultimately give you an edge on your competition. Look for Cori Clausen’s introduction as the Chamber’s most recent hire on Page __.

Consider Retirement Flexibility
Do not underestimate the number of baby-boomers in the future that may not be ready for full blown retirement. Consider the advantages of hiring retired employees on a part-time basis to assist with training needs. You may find that mature employees are more stable, better rooted, and our more loyal to the mission and goals of your organization.

Daycare for Working Parents
61% of married couple families have both parents working outside the home. Consider partnering with other local businesses to offer daycare options for your employees. Nike, headquartered in Beaverton has a Child Development Center on site for the children of their 6,000 employees with another one under construction. The current facility has helped parents focus on work knowing their children are safe and in a learning environment they can trust. Small business can take advantage of Nike’s innovation by finding creative ways to offer similar incentives to their employees if the option becomes necessary.

Employees with Disabilities
There are a number of misperceptions regarding the value and benefit of employing people with disabilities. Roughly 1 in 5 people in the United States have some type of disability that is recognized by our government. This equals approximately 50 million people. You do not have to travel far to find businesses that have benefited from the employment of people with disabilities. One major misperception is that many potential employees in this subgroup require costly accommodations. The simple fact is the large majority do not. Local small business Huggins Insurance and Portland based PCC Structurals, Inc. both have inspiring stories of the real benefit in hiring disabled workers.

Substance Abuse
Drug use continues to plague the productivity potential of many industries. For example, here in our own state, a wood products business had 80 applicants for 15 open positions and could hire none of them because they all tested positive for drug use. According to feedback given to the Oregon Business Plan, the biggest problem mentioned on a statewide bus tour was the difficulty in finding job applicants who could pass a drug test. If you are looking for ways to implement a drug free workplace policy, contact Lisa Miller with Community Action Drug Prevention Network at 503-585-6232. They have strategies in place that have helped businesses throughout our area achieve productivity and workforce goals.

Sources: Worksource Oregon, Bureau of Labor Statistics, Oregon Work Drugfree

12/23/06 - Why are prevailing wages such a big issue?
Written by Jason Brandt, Director of Public Affairs, Salem Area Chamber of Commerce

There are so many perceptions on issues we deal with in the world today and in a country where the people have control, we owe it to ourselves to wrestle with those perceptions and challenge them. One of the most interesting issues that has the Salem Chamber’s attention for the past year is the process by which state government gets involved with the free market process.

The Bureau of Labor and Industries or Labor and Industries Bureau (BOLI) is one of 148 agencies that make up our state government in the State of Oregon. Among other things, BOLI is charged with protecting the rights of workers. The issue which takes center stage is the matter of prevailing wage and its application to public/private partnerships. Projects in Salem that have been a result of public/private partnership include the Salem Riverfront Carousel, the Phoenix Grand Hotel/Salem Conference Center, and most recently the plans for Hollywood Station which would include a new Senior Center (a public project), housing, and commercial/retail space on Portland Road in north Salem.

Prevailing wage by law must be paid to workers when public funds are used for public works. As a result, private developers and local municipalities have banned together to package projects like Hollywood Station to include both private and public components. The downtown Phoenix Grand Hotel and Salem Conference Center block is a perfect example of how carefully the City of Salem has separated public and private labor locally. I recall taking numerous tours during the construction of the project and the physical line that separated the Salem Conference Center and its workers subject to prevailing wage law and the private workers and their “free market” wages who worked on the construction of the Phoenix Grand Hotel.

Why are prevailing wages an issue? Because prevailing wages typically result in higher labor costs compared to many private projects. It is a wage determined by the state based on an average of construction wages. As a result, contractors and developers now go to extraordinary lengths to separate a big project with a number of components into two operations – one with private funds for the private project (Phoenix Grand Hotel) and the other public funds to pay prevailing wage and other costs for the public project (Salem Conference Center).

So what’s the issue? If we all take a step back and look at the big picture, Salem’s future is the issue. Projects that can ethically separate public and private work are in jeopardy because of judicial battles between cities/private developers and state government. In other words, “we, the people” end up spending exorbitant amounts of our own money so that our own local government can defend us from our own state government. My guess is the price tag for these court battles will sicken us all as taxpayers. 

So let’s walk through the process – local government partners with a private developer to create plans for a public/private project and separate public and private work. Next, a budget is decided upon including labor expense for both public and private work. Then, the State of Oregon challenges the planned separation of public and private work. The project now heads through the judicial process accumulating additional expense in legal fees as the project is put on hold. If prevailing wage must be paid to all workers on both the private and public components, no project moves forward and no one works because the budget no longer pencils out.

It’s interesting to me that the State chooses to wield its power to ultimately kill opportunities that will create jobs for willing workers, fill a local need, and boost local economies. Construction workers want to work on a private project with a private wage that is competitive based on market conditions rather than not work at all. So, do we really need to make this issue so complicated? Do we really need an 80-page handbook on how to apply Prevailing Wage Rate (PWR) law?

Something we all need to be aware of is the simple fact that this issue is just one small piece of a much larger, complex, and overwhelming government puzzle. With 148 state agencies, our government continues to build upon itself and as government builds so do restrictions on American freedom.

11/14/06 - 2007 Legislative Priorities

The 2007 Legislative Session continues to draw closer and Chambers of Commerce across the state have collaborated to address priority issues. View those priorities here.

11/8/06 - State Election Results Recap

The following results include the winning candidates in the November general election as well as the final results of the state measures as they pertain to the Salem area:

Governor
Ted Kulongoski, 51.1%

U.S. Representative, 5th District
Darlene Hooley, 54.2%

State Senator
Jackie Winters (10th District), 53.7%
Peter Courtney (11th District), 57.7%

State Representatives
Kevin Cameron (19th District), 56.9%
Vicki Berger (20th District), 59.6%
Brian Clem (21st District), 61.3%
Betty Komp (22nd District), 52%
Brian Boquist (23rd District), 57.9%
Kim Thatcher (25th District), 57.1%

Marion County Commissioners
Patti Milne (Position 1), 58.9%
Janet Carlson (Position 2), 62.5%

Marion County Assessor
Richard Kreitzer, 58.2%

Polk County Commissioners
Tom Ritchey (Position 2), 51.1%
Ron Dodge (Position 3), 57.6%

City of Salem, Municipal Judge
Jane Aiken, 55%

State Measures
Measure 39 - Approved; 66.8% in favor, 33.2% opposed
Measure 40 - Failed; 43.7% in favor, 56.3% opposed
Measure 41 - Failed; 36.9% in favor, 63.1% opposed
Measure 42 - Failed; 34.8% in favor, 65.2% opposed
Measure 43 - Failed; 45.4% in favor, 54.6% opposed
Measure 44 - Approved; 77.8% in favor; 22.2% opposed
Measure 45 - Failed; 41.2% in favor; 58.8% opposed
Measure 46 - Failed; 40.1% in favor; 59.9% opposed
Measure 47 - Approved; 53.1% in favor; 46.9% opposed
Measure 48 - Failed; 29% in favor; 71% opposed

10/17/06 - Chamber Action and Positions on State Measures

Measure 39
Prohibits public body from condemning private real property if intends to convey to private party.

Measure 39 would prohibit public bodies from condemning private residence, business establishment, farm, or forest operation if government intends to convey all or part of the property to another private party. Measure excludes property condemned as dangerous to health or safety, or for transportation or utility services.

 Chamber Position: OPPOSE

The Salem Chamber is not in support of giving government more authority and believes in the rights of private property owners. However, there are unique circumstances in communities whereby the use of condemnation by local government provides a greater good for the community as a whole. Condemnation should always be the very last tool used by local government and used only after thorough public process.

The City of Salem would not be what it is today if Measure 39 would have been law in the past.  Salem Center, which revived a dying downtown, would not have occurred.  Today’s beautiful Pringle Creek area was once a run-down industrial area and would not be what it is today if Measure 39 would have been law.  Consequently, though Measure 39 sounds very appealing there are unintended consequences. 

• Changes stemming from Measure 39 would require cities to pay well above the market value for land – a cost for which we all pay. In addition, litigation costs will rise.  This measure could add as much as $30 million to Oregon cities annually.

• Open public process would give way to legal battles and decisions made by the courts.

• Locally, the City of Salem has been judicious when determining the need for condemnation only after extensive public process to ensure a greater public good.  That process is the essence of democracy.

Measure 42
Prohibits insurance companies from using credit score or “credit worthiness” in calculating rates or premiums

Measure 42 would prohibit insurance companies selling or marketing medical, health, accident, automobile, fire, or liability insurance, or any combination of policies providing such coverage, from calculating insurance rates or premiums based on the credit history of an insured person or someone applying for insurance.

Chamber Position: OPPOSE

• Credit scores assist in accurately calculating insurance rates for countless Oregonians based on associated risk.

• Passage of Measure 42 could result in higher insurance premiums for business and individuals and shifts the cost burden to those who have been financially responsible.

• Current law is already in place to limit the ways in which credit scores are used in the calculation of insurance rates.

• Passage of this measure goes against free enterprise and government is given more control to regulate the way the private sector conducts business.

·     Measure 46
Allows laws regulating election contributions, expenditures adopted by initiative or ¾ of both legislative houses

Measure 46 would amend Article 1, section 8 of Oregon’s Constitution known as the free speech guarantee. Currently, this section of Article 1 does not allow limits to be placed on political campaign contributions or expenditures in elections for state or local office.

Under this measure, the Oregon Legislature or voters by initiative would have the authority to restrict or limit political campaign contributions and expenditures, subject to federal law.

Measure 47
Limits or prohibits contributions and expenditures; adds disclosure, new reporting requirements

Measure 47 sets specific limits on political campaign contributions and expenditures. Under this measure corporations and labor unions may not contribute to candidates, political committees or political parties. In addition, the measure lines out complex monetary guidelines that cap contributions for individuals, political committees, small donor committees, political parties, and a candidate’s own campaign. 

Chamber Position on Measures 46 & 47: OPPOSE

• The concept of campaign finance reform has merit but the content included as part of Measures 47 is not an appropriate fit for Oregon.

• Packaging Measures 46 and 47 together as a strategy for campaign finance reform is misguided. Although Measure 46 may have merit in the ongoing debate regarding campaign finance reform, its association with specific monetary guidelines expressed in Measure 47 can be misleading and is definitely confusing.

• Measure 47 could create more restrictions on political contributions made by business over that of labor unions.

• Measure 46 provides the authority to amend laws relating to campaign finance reform but provides no language as to what limits would be imposed on political contributions and/or expenditures and how limits would be decided upon.

      Measure 48
Limits biennial percentage increase in state spending to percentage increase in state population plus inflation

Measure 48 proposes to limit state spending by amending the Oregon Constitution to provide that, unless 2/3 vote of both the Oregon House and Senate and a subsequent approval by a majority of the voters, spending for state services in a two-year period cannot exceed the amount spent in the previous two-year period plus the combined rate of the increase of the state’s population and inflation in that same, two-year period.

Chamber Position: SUPPORT

John F. Kennedy may have said it best:

"Only by doing the work ourselves, only by giving generously out of our own pockets, can we hope in the long run to maintain the authority of the people over the state, to ensure that the people remain the master, the state the servant. Every time we try to lift a problem from our own shoulders, and shift that problem to the hands of the government, to the same extent we are sacrificing the liberties of our people."    -John F. Kennedy, 1953   (quoted in The Vermont Papers)

• This measure does not reduce revenues to the state – it limits state spending to an increase of the rate of growth in the state population and the percent increase in inflation.

• Fact:  The legislature has not proved that it can self-discipline its spending.  Even during the robust times of the 1990’s, spending accelerated at record pace, more programs were shifted to government and no savings were initiated.

• While the Chamber is concerned with the out of state money that flows into Oregon to support various measures, this measure included, that issue does not outweigh the merits of the measure.

• It is ultimately a worse situation for Oregon if state government continues to spend without adhering to priorities and continues to try to be the solution for every problem.

·     The Chamber Board of Directors rejects the idea that this measure would devastate Oregon and fully understands the legislature’s ability to get around the issue using tax credits etc.  While the board agrees that this measure is not perfect, the Salem Chamber will stand up and support the call for spending accountability and better fiscal management from state government, which has been a cry from small business for years.

7/20/06 - Initiative overview helps focus Chamber direction

Harvey Mathews of Associated Oregon Industries shared insight on state initiatives harmful to business at the July 20th Governmental Affairs Forum. These initiatives include:

- Campaign Finance Reform (Initiatives 8 and 37)
- Credit Scores for Insurance (Initiative 23)
- Term Limits (Initiative 39)
- Universal Health Care (Initiative 40)

Harvey Mathews presentation was followed by Phil Donovan, Campaign Manager for Defend Oregon. Donovan gave a presentation specific to Initiatives 6 and 14 proposing state spending caps.

For more detailed information about any initiatives mentioned above, email jason@salemchamber.org. The Governmental Affairs Team will begin taking action on initiatives as needed at the August 3rd meeting which begins at 7am at the Salem Chamber. The process is open to all active Chamber members.

6/28/06 - Oregon's workforce - the issues and challenges

The most recent survey conducted by Oregon Business magazine asked subscribers questions about immigration, taxes and older workers, three timely and important topics facing Oregon's business community.

Immigration: 42% of respondents said that illegal immigrants should be offered a path to citizenship, while 39% favored creating a guest worker program with no path to citizenship. About 60% said that increased border security would be effective in reducing the number of illegal immigrants entering the country. Most of the respondents work at companies that hire no immigrant labor.

Taxes: Any giveback of the corporate kicker tax should be spent on K-12 education, said 43% of respondents. by far, this was the most supported expenditure; about 10% of respondents supported spending the money on law enforcement, business development, or giving it to the state's general fund. And 56% of respondents favored changing the kicker law to put surplus income tax revenues in a rainy day fund.

Aging workforce: Respondents report that they have a substantial workforce over the age of 50. They characterize that older workforce as more experienced, more loyal, and more stable than younger workers, but not necessarily more costly. But other than flexible work schedules, businesses report they are doing little to retain those older workers.

4/21/06 - Special Legislative session begins and ends

May 20th, 2006 marked the beginning and end of a special session of the Oregon Legislature. Five issues were included on the Legislative agenda. First, the Legislature made a decision regarding the $140 million dollar shortfall projected by the Department of Human Services or DHS. Second, an allocation of $42.2 million dollars in revenue surplus from the Oregon Lottery Department will be directed towards Oregon's public schools.

In addition, the Oregon Legislature discussed three other agenda items including bond extensions for Portland Public Schools, the extension of prison sentences for sex offenders, and protections for consumers who utilize payday loans.

8/16/05 - Oregon Business Plan Update

Competitive Index Review
In addition to policy and cluster initiatives, the 2006 edition of the Oregon Competitive Index will be released at the 4th Annual Leadership Summit. The Index is a guide to the state's economic competitiveness in seven key areas: general well being, traded- sector cluster health, pioneering innovation, people, place, productivity, and public finance. Please take a moment to view the 2005 edition of the Index and email us at info@OregonBusinessPlan.org with any suggestions for changes.

Additional Short List Items Achieved in Last Two Days of Session
The Oregon Legislature adjourned on Friday morning after the second longest session in Oregon history. During the final two days of the session, the Legislature completed work on several Oregon Business Plan Short List items including:

• Connect Oregon - $100 million for a multi-modal investment package for key air, marine, public transportation, and rail assets.

• Industrial Land - $45 million for increasing supply of project-ready industrial land throughout Oregon.

• Strategic Reserve Fund - $7-$10 million to spur economic and industry cluster development across the state.

• K-16 Education Data System - $4.6 million for an improved education data system.

• Engineering and Computer Science - $20.7 million to double the number of engineering and computer science degrees in Oregon.

This was a successful session for Oregon's economy with the Legislature passing 13 key items on the Oregon Business Plan Short List. Many thanks to the Legislators, business leaders, and Oregon Business Plan initiative leaders who helped support and advance these bills and budgets. To view the final status of all the Short List items, click here.

What is the Oregon Business Plan?
Since it was launched in 2002, the Oregon Business Plan has provided the strategic framework for Oregon's business and elected leaders, working together, to build a stronger, more competitive state economy. Development of the Business Plan is guided by a steering committee of leaders representing the state's major businesses and business associations. If you wish to add or remove an email address from our update list, contact us at info@OregonBusinessPlan.org. If you would like to view our list of business association endorsers, or add your business association's name to our list, visit http://www.OregonBusinessPlan.org/endorse.html

7/28/05 - Columbia River Channel Improvement Project
Provided by the Columbia River Channel Coalition

On June 25th, U.S. Army Corps of Engineers' contractor Great Lakes Dredge and Dock Company began deepening a 13-mile stretch of the lower Columbia River navigation channel from 40 to 43 feet. Upon completion of work in the lower Columbia River, the Corps will deepen another 10 miles of the upper channel near Portland/Vancouver.

On June 15th, a federal judge ruled in favor of the Columbia River Channel Improvement Project. The judge determined that the Corps, NOAA Fisheries, and sponsor ports (ports of Portland and St. Helens, Oregon and Kalama, Longview, Vancouver and Woodland in Washington) had properly analyzed the project's impact under federal law. The judge agreed that the Corps had taken the requisite "hard look" at project impacts as required by the National Environmental Policy Act. the judge also concluded that NOAA Fisheries had properly reviewed the project's impact to salmon. With the resolution of this lawsuit, there is no litigation pending against the project.

The first ecosystem restoration feature of the project was completed last fall at Lord-Walker Island (near Longview) to provide improved habitat for migrating juvenile salmon. Additional ecosystem restoration features will significantly contribute to the health of the Columbia River, including restoration of tidal marsh, wetlands. native riparian vegetation, shallows, and fish access to spawning streams in the estuary. These features go above and beyond mitigation to actually improve the estuary and river.

Washington and Oregon have appropriated full state matching funds totaling $55.4 million for the project and the federal government has appropriated $19 million to date. Both the U.S. House and Senate have appropriated $15 million for fiscal year 2006, which matched the President's budget request for the project. Combined with state funds and work conducted this year, the Corps estimates the $15 million will allow deepening of the channel to approximately river mile 40 in 2006. The Corps may use some of the funding for rock removal, which could reduce the total number of miles dredged in 2006. The total project cost is $150.5 million. The Corps' most recent economic analysis found that for every dollar invested in the project, the nation receives $1.66 in transportation cost savings.

For more information visit ChannelDeepening.com

7/15/05 - Oregon Business Plan Update

Oregon Business Plan Launches Cluster Network
The Oregon Business Plan has recently launched the Oregon Cluster Network to help the state's emerging and existing industry clusters to grow and thrive in the global economy.  The Cluster Network will connect industry leaders with university researchers, schools, media, venture capital, and other support organizations across the state, and will assist cluster facilitators to share best practices.

The Network is guided by a Leadership Council comprised of industry, academic, and public agency leaders who are committed to establishing a framework for understanding and working with clusters. The Leadership Council aims to strengthen Oregon's economy by using clusters to generate new prospects for business recruitment, developing relevant economic and market data, and guiding public policy.

If you would like to learn more upcoming Leadership Council meetings, or receive updates about other Cluster Network activities, please send an email to info@oregonclusters.org. And be sure to visit www.OregonClusters.org for all the latest information on events and cluster development efforts.

Legislative Short List Update: The Big Look on Land Use
SB82, which passed the Senate on July 13, is a key item on the Oregon Business Plan Legislative Short List. The bill, now awaiting action in the House, would create a land use task force to review Oregon's 30-year old land use system and make recommendations to the Legislature on needed changes.

Why take a big look at Oregon's land use system? 
Businesses need a rational and predictable land use program that is up-to-date. Oregon's economy was very different 30 years ago when the primary concern was protection of farm and forestry land. Today, we have additional industries, with unique land needs, and these businesses are not factored in the current land use system. A comprehensive review is needed rather than trying to tweak a set of statues that did not anticipate the full range of industrial development, economic activity, and community needs in Oregon in the 21st Century.

What About Measure 37? 
The passage of Measure 37 does not make a review of the statewide land use planning program unnecessary. If anything, it makes it more important than before. Measure 37 highlighted concerns in one area of land use planning, but does not deal with the wide range of land use issues that would be embodied in a comprehensive land use review (e.g. industrial land, regional planning, etc.)

Why act now? 
Two years ago the Legislature failed to fund a similar land use review task force. If the Legislature fails to act this session, it could be 10 years before much needed changes are made to the land use system. The cost of the review and task force support is negligible compared to the cost of maintaining a system that does not support businesses competing in global economy with constant change.

To chart the latest progress on SB82, and all the items on the Short List, please visit the Oregon Business Plan website at www.oregonbusinessplan.org.

Legislative Short List Update: Support Brand Oregon
With budget negotiations continuing in the Legislature, one area from the Oregon Business Plan Short List that remains undecided is the funding level for Brand Oregon -- the highly successful effort to market Oregon products, people, and places. Brand Oregon has received dollar for dollar matches (and more) from the private sector for each of its marketing campaigns and we call on legislators to support $1.5 million for Brand Oregon. To learn more about Brand Oregon visit: http://www.oregon.gov/BRANDOREGON/

6/20/05 - Letters of Concern Sent Regarding Portland's Planned Purchase of PGE

On behalf of the City of Salem and surrounding cities, Mayor Janet Taylor has presented letters of concern regarding Portland's planned purchase of Portland General Electric (PGE) to Portland Mayor Tom Potter and Commissioner Erik Sten. The letters came from over 30 cities in the Clackamas, Marion, Polk, Washington and Yamhill counties.

The Salem Chamber of Commerce has also expressed concern and formed an official position on the proposed City of Portland purchase of PGE. The Salem Chamber letter addressed to Mayor Tom Potter and Enron official Mitch Taylor is as follows:

The Salem Area Chamber of Commerce representing 1,250 businesses in the mid-Willamette valley would like to formally convey our strong opposition to the City of Portland’s bid to buy Portland General Electric.

The Salem Area Chamber of Commerce strongly supports efforts to return Portland General Electric to an independent, publicly traded utility, headquartered in Oregon. This strategy will protect the interests of all counties outside of Portland city limits who are serviced by PGE and greatly help in facilitating an end to the uncertainty surrounding PGE’s ownership.

Oregon must continue to send a pro-business message to companies who currently support our state economy and to those who are looking to invest in our great state. As a result, the Salem Chamber expresses the business community’s continuing support for PGE in becoming a stand-alone company.

5/20/05 - Chamber Board Unanimously Supports Senate Bill 640

The Salem Chamber recognizes the adverse impacts of identity theft and methamphetamine use on our community. As a result, the Chamber supports Senate Bill 640, which would add needed protections and security for Oregon residents against the costly identity theft and methamphetamine epidemic.

Oregon's Identity Theft Challenge

Oregon ranks 49th out of 50 states in ease of acquiring identification and is 7th in the nation for identity theft cases. Community Action Drug Prevention Network, No Meth Not in My Neighborhood, and the Salem Chamber of Commerce are gravely concerned about how this crime is funding the growing methamphetamine epidemic in Oregon. 

Currently, the Department of Motor Vehicles has approximately 6 million active Oregon driver's licenses on file. Yet, there are only 3.5 million residents in Oregon. Identification is so easy to get in Oregon that criminals are securing multiple forms of fraudulent identification within hours.

The Marion County Sheriff's Office shared one such case where an individual secured 20 DMV issued licenses within a 5 hour period of time using stolen information from unsuspecting citizens. This type of fraud is costing our Oregon communities, businesses, and citizens millions of dollars.

The current DMV system does not have cross checking capacity, which would help protect Oregon residents from criminals using stolen information to secure multiple fraudulent licenses. Senate Bill 640 would replace the current photograph on our licenses with biometric data, which uses digital 3-D imaging and a thumbprint to securely verify identity. By using digital imaging and thumbprint procedures, the DMV database would automatically verify that the person obtaining the new license was in-fact the correct person. The full system change would cost three million dollars and this cost would be offset by adding three dollars to the cost of each license renewal.

Important Protections For Business

There are several steps businesses can take to reduce the impact of identity theft on our community. No Meth Not in My Neighborhood partners have launched the "Getting to Know You Campaign." The campaign is effective and straightforward. To protect your business and customers from identity theft:

• Implement the thumbprint check program

• Ask to see photo identification for all credit cards and ATM transactions

• Encourage customers and staff to place "SEE PHOTO ID" stickers on all ATM and credit cards

Take Action

With statewide DMV procedural changes that support biometric data collection and the implementation of business identity theft protections, Oregon can establish an effective strategy that will have positive impact on the crisis we face. Call your local Senators and Representatives and advocate for Senate Bill 640.

For more information on Senate Bill 640 visit:
http://www.leg.state.or.us/05reg/measpdf/sb0600.dir/sb0640.intro.pdf

5/13/05 - May Revenue Forecast

5/9/05 - House Republicans Pass Bills to Get Oregon's Economy On Track

SALEM - House Majority Leader Wayne Scott (R-Canby) announced today the passage of HB 2332 which reduces capital gains taxes and HB 2046, which makes Oregon's earned income tax credit refundable.

"House Republicans are committed to getting our economy back on track for all Oregonians," said Rep. Scott.  "Each of these bills will play a role in helping Oregon's economy.  Reducing capital gains taxes and making the earned income tax credit refundable will encourage Oregonians to put money into our state through investment and spending.  That's what we need to get our economy moving again."

HB 2332 phases in a capital gains income subtraction in Oregon for personal and corporate income taxes beginning in 2008.  The bill reduces the tax from 9% to 4.5% over five years.

"Let's work now to remove the roadblocks to growth in Oregon," said Rep. Butler (R-Ontario), Chair of the House Revenue Committee and carrier of the bill.  "We should be taxing income, not investment.  That's how we can encourage growth in our state."

The House also passed HB 2046 which phases in an increase in the percentage of the federal earned income tax credit for Oregon's earned income tax credit.  It also changes Oregon's earned income tax credit to a refundable tax credit.  The credit will equal 5% of the federal earned income tax credit in tax year 2007, 7.5% of the federal earned income tax credit in 2008 and 10% of the federal earned income tax credit in 2009.

"HB 2046 is not only an effective offensive weapon for combating poverty, but it also provides added incentive to encourage Oregonians to go to work," said Rep. Andy Olson (R-Albany) carrier of the bill.

2/15/05 - Measure 37 - The following article is provided by Banking Matters. Written by Ken Sherman of the Oregon Bankers Association

Bankers are used to dealing with moving targets. Neither banks nor their customers live in static, unchanging worlds. Bankers base loan decisions on a whole range of assumptions, pertaining to such things as the future health and direction of the general and local economies, the future physical and financial health of the borrower, the borrower's integrity and managerial capabilities, the availability of raw materials and labor, and so forth. When those assumptions prove to be generally correct, the loan gets repaid on time and without incident. When the assumptions prove to be faulty, the bank may end up with an under-performing or non-performing loan on its books.

Lenders typically make lots of assumptions about the collateral they take to secure loans, including, in the case of real property, that it will retain its value and continue to be available for the uses to which it has historically been devoted. The recent passage of Ballot Measure 37 will undercut these assumptions in many cases, and will almost certainly make real estate lending more unpredictable. Measure 37 gives Oregon property owners the right to make claims against state and local governments for loss of property value resulting from the enforcement of certain land use regulations, such as zoning ordinances.

While much of the post-election discussion in the media has focused on the impact of Measure 37 on farm and forest lands, the provisions of the measure apply with equal force to urban properties. A Measure 37 claim can only be made after a new land use regulation is adopted or an existing regulation is applied to or enforced against the claimant's property. To make a claim, the property owner must show that the regulation in question has reduced the value of the property. The government then has 6 months to either pay the claim or waive or modify the regulation. If the government denies the claim, or takes no action, the owner can go to court and get a judgment for the claim, together with costs and attorney fees.

Because state and local governments are generally strapped for cash and have no resources with which to pay claims, the expectation is that in most cases, the government will waive or modify the regulation so as to eliminate its negative impact on property values, rather than paying the claim. One important limitation on these claims is that the regulation in question must have come into existence while the owner or a "family member" owned the property. This limitation has important ramifications for mortgage lenders. If, for example, the property in question has been in the current owner's family for generations, virtually all land use regulations that now apply to the property may lower its value. So long as a family member owns the property, the owner should be able to either recover compensation or get the offending regulations waived or modified to permit the range of development that was allowed when the family first acquired the property. But what if the owner has mortgaged the property, and a default results in foreclosure and acquisition of the property by the bank or by a third party purchaser? The benefits of Measure 37 are personal to the family who owned and mortgaged the property, and won't follow the property when the bank or third party becomes the owner.

Consider the family that has owned its 50 acre farm for generations. Under current EAU zoning, the farm is worth $500,000, but if the exclusive farm use restrictions are lifted, the property could be subdivided into 200 lots having a total value of $5 - 10 million. The owner files a Measure 37 claim and when the county decides that it is not willing to layoff the entire sheriff's department for three years to pay the claim, it waives the EFU zoning restrictions. The owner then gets preliminary approval for the subdivision of the property, borrows $1,2 million from the bank to finance the subdivision improvements, and defaults on the loan midway through the construction process.

If the bank forecloses its mortgage and becomes the property owner, the waiver of zoning restrictions won't apply to it or to any third party to whom the property is sold (unless the third party is a "family member" of the owner-borrower). The bank ends up with a significant exposure on a loan it thought was over-collateralized. Since the right of compensation or waiver under Measure 37 is personal to the family that owned the property when the offending regulation went into effect, it is not entirely clear what a property's use status will be once the family disposes of the property. Assume for example, that the property in question is a 10 acre parcel zoned EFU, on which Jones, the long-time owner, has previously been unable to build a home. Jones files a Measure 37 claim, gets the EFU restrictions waived, and builds his house. Three years later Jones sells the property to Smith, in a transaction financed by the bank. Since Smith is unrelated to Jones, it is not clear under Measure 37 whether or to what extent the waiver obtained by Jones applies to Smith and successive owners. Is the house Jones built still legal? Can Smith put an addition on it?

At this juncture, no one knows for sure. But at least one commentator has said that governments may be able to provide that a waiver of the previous land use regulations is void upon a claimant's transfer of the property, and that governments that wish to so provide should record a statement in the real property records to the effect that the waiver expires upon transfer of the property. It is unlikely that in the above example the government would force Smith to tear down the house that Jones built; but if Jones gets the waiver and then transfers the property to Smith before building the house, its unlikely the government will allow Smith to proceed with the construction. What if Jones dies the middle of construction, and ownership of the property passes to an unrelated 3rd party, or to the bank financing the construction? Will the local government permit the new owner to complete the construction? The bank may need to require Jones to obtain credit life insurance, at least during the construction period.

Definitive answers to this and many other questions will undoubtedly have to be sorted out by the courts. Meanwhile, the Jones of this world (and the banks that finance their real property purchases) will need to do careful due diligence in assessing the possible impacts of Measure 37. 

Measure 37 may also contain hidden perils for banks that lend on urban properties, and will impact many properties where no Measure 37 claim is filed. Assume for example that the bank's customer finances his purchase of a commercial office building with a loan from the bank. An adjacent property has been in the same ownership for the past 30 years, during which time it was "down zoned" from General Industrial to Commercial Office. The owner of the adjacent property files a Measure 37 claim, and the government waives the down zoning, whereupon the owner constructs a rendering plant or a cement plant on the property. The adverse impact on the mortgaged property results in major vacancies in the office building, which triggers a loan default. Once again, the bank may find itself under-collateralized.

A number of local jurisdictions are considering adoption of ordinances that would grant "private rights of action" to citizens, allowing them to sue for compensation from neighbors whose Measure 37 claims have reduced the value of neighboring properties. Another unanticipated collateral impact of Measure 37 arises where, for example, the bank has a mortgage on a 10 acre parcel that is located just inside the urban growth boundary. Because the parcel is inside the UGB, it can be developed into high-end 1/2 to 1 acre home sites under the current regulations. Up until now, such properties have been highly valued and sought after because of their relative scarcity. But under Measure 37, many of the properties outside the UGB may be available for urban development, thereby eliminating the scarcity and reducing the value of the subject parcel.

These are just a few of the questions and issues that bankers will need to ponder as we move into the brave new world of Measure 37. The courts and/or the legislature may act in the months ahead to sort out these and many other questions that are being raised about this measure. In the meanwhile, we will continue to pass on new information and ideas on how lenders can protect themselves against the adverse impacts of Measure 37.

12/30/04 - Land Use - The New Concurrency Standard
By Jason Brandt, Member Services

As of June 2004, the State of Oregon moved towards more aggressive infrastructure rules for parties involved in the development process. Jaqua v. City of Springfield set a standard for how the Department of Land Conservation and Development will regulate and monitor the activities of developers.

Eric Jacobson (DLCD Staff) prepared the following brief explanation of Jaqua v. City of Springfield:

The City of Springfield approved a plan amendment for the development of a regional hospital in an area designated for mixed-use, residential development. The hospital is a more intense use than the previously authorized residential uses and would, therefore, increase traffic in the vicinity. The City adopted provisions to assure there would be adequate planned transportation capacity to support the hospital development by the end of the 20-year planning period (emphasis added). However, the City’s decision did not assess whether the hospital development would cause or accelerate the failure to meet performance standards throughout (emphasis added) the planning period. Local residents Robin and John Jaqua challenged the City’s decision. The Land Use Board of Appeals (LUBA) and the Court of Appeals remanded the City’s decision in part because the City’s finding did not assess whether the plan amendment would result in temporary failures during the intervening time – i.e. throughout the planning period, not just at the end of the 20-year period (emphasis added). The implication of the ruling is that the effects of a proposed action may not be measured only at the end of the planning period. If the plan amendment triggers “significant affect” at the end during the planning period, the local government has an obligation to avoid this significant affect by limiting or phasing the allowed land use, adding or scheduling transportation facilities, adopting measures to reduce traffic demands, or by modifying the applicable performance standards.

Based on the decision in the case above, concerns have been expressed that the LUBA/Court of Appeals decision adds a new concurrency standard to the Transportation Planning Rule (TPR). The decision creates a great deal of confusion among property owners and developers who feel the TPR should evaluate plan amendments based on the planning period and not on the intervening years.

The debate is whether it is financially and rationally reasonable to have concurrent Transportation System Plans (TSP’s) as opposed to planned facilities that will be ready for use by the end of the development period. The financial burden to concurrently accommodate transportation needs is seen by many as unrealistic. These types of decisions made by LUBA and the DLCD increase animosity between government and citizens and do not facilitate needed partnerships with developers that could result in mutually desirable outcomes.

12/6/04 - The "Back-Door Effect" of Oregon's Rising Minimum Wage
By Jason Brandt, Member Services

As of January 2005, Oregon will face another minimum wage increase as a result of the passage of Measure 25 in 2002. In January, our minimum wage will rise to $7.25 an hour, a twenty cent increase from this year making Oregon’s minimum wage the second highest in the country behind Washington. So what are the affects of a minimum wage on the rise? It seems few take a moment to look at how minimum wage increases affect the employers who make low-wage jobs possible in the first place.

With the use of a recent minimum wage study, University of Oregon economist Larry D. Singell, Jr. shows how employers in various industries are affected by low-wage increases. The focus was on the three-year minimum wage increase between the years 1997 and 1999, which raised the wage by a record 37 percent. By examining the changes in unemployment rates in Oregon to that of our neighbor Washington during the three-year minimum wage increase, we find significant results.

In the eating and drinking industry, the study shows that the $1.50 increase in minimum wage between the years 1997 and 1999 had a substantial negative impact on the rate of employment in Oregon compared to that of Washington. Although this trend did not start immediately, it was observed during the second and third years of the three-year minimum wage increase. 

So why was there not an immediate effect? It appears employers in the restaurant industry adapted to the minimum wage increase by decreasing employment numbers gradually. For example, when a low-wage worker resigned, the employer was less likely to pursue a replacement due to the affects of the minimum wage increase on employment expenses.

The fact is Oregon has the highest unemployment rate in the country. It is no coincidence that studies like the one performed by economists at the University of Oregon show how our hikes in minimum wage in various industries affect the very people that provide minimum wage jobs. Small business owners are forced to move to more welcoming states due to the pressure Oregon places on their bottom line. 

It is imperative that Oregon citizens make the correlation between our increases in minimum wage and our escalating unemployment problems. Without our small businesses, we lose the opportunity to help those individuals that seek employment. Our minimum wage increases hurt the very people it is designed to help. 

11/3/04 - What State Measure Results Mean for Small Business 

Oregon voters were in sync with the official Salem Chamber positions on Measures 34 (Forest Management), 37 (Compensation for Takings), and 38 (Abolishment of SAIF Corporation). Here is what the outcome means to local businesses:

*Oregonians Defeat Measure 34 - Forest Management

Oregonians defeat of Measure 34 means the current State Forests Management Plan will continue to manage the balance between timber production and preservation efforts in the Tillamook and Clatsop County Forests. The "no" vote on Measure 34 ensures the continued use of timber as one of Oregon's most beneficial and renewable natural resources. Also, the actions of Oregonian voters will allow logging to continue at its current production levels in these two forests while supporting the local economies that rely on timber industry jobs.

Ten million acres of federal forestlands in Oregon are already off limits to timber harvests.

*Oregonians Pass Measure 37 - Compensation for Takings

The owners of private real property will now be entitled to receive compensation when a land use regulation enacted after the owner has become the owner of the property has resulted in a loss of value. In other words, property owners will be reimbursed for government regulations that restrict the use of their property and/or reduce its fair market value. 

The passage of Measure 37 will force the 2005 Legislative Assembly to clarify some of the ambiguities that exist within the measure. There are unanswered questions with regard to how municipalities will compensate citizens without an identified revenue stream to do so. It is not perfectly clear who exactly is entitled to receive compensation when property has been passed on through family members over the years. It is not perfectly clear what the unintended consequences will be with regard to how many claims might be generated and have to be processed when a local government body makes a planning decision for the "public good". The imperfections that exist within Measure 37 must now be fixed by the legislature.

*Voters Decisively Defeat Measure 38 - Abolishment of SAIF Corp.