Legislators discuss successes and challenges of 2019

Legislators discuss successes and challenges of 2019

Despite a few bumps and a little bit of controversy, Oregon’s 2019 legislative session was a historic success. That was the assessment from Senate Majority Leader Ginny Burdick, State Representative Janelle Bynum, and Shawn Miller, president of Miller Public Affairs, to a packed room of business leaders at the Portland Business Alliance Lunch with Leaders event in August.

The successes
Senator Burdick and Rep. Bynum sited HB 3427, the Student Success Act, an infusion of $2 billion of new money into Oregon’s K-12 schools, as the signature accomplishment of the 2019 session. The $2 billion will be raised by a new .57% corporate activities tax, which applies to all companies with $1 million in gross revenue. Companies will be allowed a 35% deduction of either their labor or capital costs.

Additional accomplishments sited by the panelists: While the session overall was a tough one for business, Miller said it could have been a lot worse. He credited the willingness of many business organizations, including Oregon Business & Industry (OBI) and the Portland Business Alliance to stay at the table and negotiate with legislators and stakeholders to identify compromise legislation that all sides could accept.

All three panelists said the Portland Business Alliance played a critical role in securing the deal made by OBI on the final version of HB 3427. The Portland Business Alliance was the first major business organization to drop its opposition to a $2 billion revenue number conditioned on changes to the tax mechanism and the passage of PERS reforms.

Miller also noted the leadership role the Portland Business Alliance played in the passage of SB 855. The bill directs state licensing boards to develop pathways for Oregon residents who obtained advanced degrees outside of the United States to licensure. The bill came about, in part, because of a 2017 study released by the Portland Business Alliance and affiliate partner Partners in Diversity, in partnership with the Migration Policy Institute. This study showed the cost to Oregon in unrealized tax revenue and unrealized economic opportunity for immigrant communities who lack pathways to work in their field of expertise and study. The report, entitled “The Cost of Brain Waste among Highly Skilled Immigrants in Oregon,” revealed that Oregon is home to 55,000 highly skilled immigrants with at least a bachelor’s degree who could not work in their field because they could not obtain a license. Many of these residents instead take on lower-skilled employment. The results for many immigrant college graduates is an overall loss of approximately $272.5 million in annual earnings, and Oregon foregoing $27.7 million in state and local tax revenue.

The challenges
All three panelists agreed that the major failure of the 2019 session was the downfall of HB 2020, which would have created a cap on total carbon emissions beginning in 2025. Companies would then be allowed to purchase and sell credits to exceed the carbon cap. HB 2020 passed the house, but ultimately failed in the Senate following an extended Republican walk out to deny a quorum and a lack of support in the Senate Democratic caucus. Senator Burdick said that Democratic leaders are working on plan to bring a new version of cap and trade back in the 2020 February session. The Portland Business Alliance was neutral on HB 2020. 

What’s next?
As Oregon moves to implement the Student Success Act, Miller identified technical improvements in the corporate activities tax as a top priority for the Portland Business Alliance. The Portland Business Alliance maintains that legislators need to make some changes to prevent the state from double-taxing companies that are subject to the Portland clean energy surcharge, the only local corporate activity tax in Oregon.

Additionally, Rep. Bynum challenged the Portland Business Alliance to push both state and elected officials to take a more aggressive approach to managing violent protests in Downtown Portland, which ultimately harm smaller businesses and retailers the most.