By editorial board • 

Oregon’s economic recovery hinges on legislative action

Asked why he persisted in robbing banks, the incorrigible Willie Sutton responded, “Because that’s where the money is.”

We have an equally direct reason for making American business the primary focus of our pandemic recovery efforts, once the health and safety of individual Americans is assured: Because that’s where the jobs are. Continued or renewed employment is crucial to individual and family recovery.

Businesses are hurting in every section of the country. In fact, they are damaged beyond recovery in many cases, particularly in niches unfortunate enough to bear outsized impact.

Among those coming readily to mind are the hotel, bar, restaurant, travel, theater and Main Street retailing industries, where pain could linger long and hard. Whether business travel, cruise line excursions, moviegoing and storefront shopping ever fully recover is an open question, and the rebound promises to be slow and uneven in other sectors.

In some cases, the reverberations can spread far. Take business travel for example.

It remains a core component of the airline and hotel industries, which are very large employers. It also serves to subsidize travel and lodging fees for the leisure traveler, who might otherwise be priced out of the market, thus triggering further erosion.

Because we live in Oregon, the wellbeing of Oregon business looms largest in our mind. While a certain amount of national aid will inevitably trickle down, real relief is going to depend in large measure on concerted action by the 2021 Oregon Legislature.

Oregon has, historically, tended to increase taxation and regulation at nearly every turn. That would be catastrophic this time.

The recessionary impact of the pandemic demands serious movement in the opposite direction. Oregonians are going to have a tough time keeping their heads above water if the Legislature fails to respond by easing the business tax and regulatory burden in the 2021 session.

How bad is it out there anyway?

According to the National Bureau of Economic Research, the number of active business owners plummeted by 3.3 million or 22% in the first two months of the pandemic alone — the most precipitous drop on record. And disproportionate losses were experienced by Black (41%), Latino (32%), Asian (26%) and female (25%) entrepreneurs.

Apple and Amazon will be fine. However, many other large businesses are taking a big hit, and small businesses like those representing the backbone of McMinnville’s business community are suffering even more.

A web of largely unforeseen Catch-22 elements are making it all that much harder for the little guy to climb back out of the economic crevasse. For example, unemployment benefits that local businesses have been managing in partnership with their employees, in an effort to help see valued workers through trying times, will carry a price down the line.

When a company’s benefit burden rises, and it has risen for just about every Oregon business this year, so does the rate it pays the state for unemployment insurance. The majority may well be headed for the top rate of 5.4% of taxable payroll in the next year or two, and that’s assuming the state doesn’t hike the rate on them. If a company cuts payroll in response, its laid-off workers will begin collecting unemployment, thus perpetuating the cycle.

That adds to the burden created by the recently enacted “corporate activities tax,” a gross receipts tax imposed in Oregon “for the privilege of doing business in this state,” which arrived at the worst possible time in 2020.

It’s time for the Legislature to step up in a major way. Otherwise, Oregon employment and economic activity could enter a crushing downward spiral.


Don Dix

The Oregon Legislature has never met a tax that couldn't be implemented or raised -- and come February, the desire to tax will be on full display. Just remember, these are legislators Oregon voters elected to represent them, and the actions taken will reveal just where the real sentiment in the Legislature rests -- pay attention!

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