Oregon’s anti-business administration

by Sen. Doug Whitsett

The Oregon Legislative Assembly maintained a modicum of equality in political power during the years between the 2010 and the 2014 general elections. During all four of those years, our bipartisan Senate coalition maintained a 15-member voting block that prevented most of the more onerous anti-business bills from being enacted.

The House of Representatives was also equally divided for two years, from 2011 to 2013, with Co-Speakers and Co-Chairs of all House committees. Each committee had the same number of Democrat and Republican members. This equal representation also greatly aided in quashing anti-business legislation.

That political balance ended with the Democrat domination of the 2012 and 2014 elections. Oregon voters gave Democrats an 18 to 12 majority in the Senate and a 35 to 25 majority in the House following the 2014 general election. Laws enacted and legislation planned since that election have been nightmarish for Oregon’s business community.

Many of the worst anti-business bills that we had prevented were reintroduced and passed during the early part of the 2015 Legislative Assembly. Because we no longer had the votes to stop them, the bills made it through both the House and Senate with little public testimony or debate and were signed into law by Governor Brown.

Not all of those laws have taken full effect. Some are still in the rulemaking phase, while others are months away from actually being implemented.

Among those is Senate Bill 454, which mandates employer-paid sick leave. The Bureau of Labor and Industry’s complex and convoluted rulemaking is due to be implemented within the next five months. Nine counties are suing the state, claiming the law represents an unfunded mandate. Private employers appear to have no alternative to obeying the job-busting law.

House Bill 2960 establishes the framework to require private employers to establish government-sanctioned retirement plans for their employees. Retirement contributions are not required by employers and are voluntary for employees, as they are allowed to opt-out of participation. The law will not be implemented until next year, when rulemaking is completed.

I would submit that many eventual mandates tend to have similar “voluntary” origins. It is much easier to make “voluntary” programs mandatory once they are written into statute by making simple language changes in subsequent legislation with little public testimony or debate.

Trial lawyers who traditionally donates heavily to Democratic legislators and candidates seemingly experienced a return on those investments during the 2015 session. Enactment of the Personal Injury Protection (PIP) and Cy Pres mandates on insurance companies will enhance the bottom line of many law firms while driving up costs for both businesses and consumers.

The extremely controversial Low Carbon Fuel Standard (LCFS) enacted by SB 324 is arguably the most egregious of all the anti-business and anti-consumer laws passed in 2015. The “carbon intensity” for every phase of fossil fuel’s life cycle, from extraction through storage, shipping and eventual use, is quantified under the guise of saving the environment. Offsets can be purchased from producers of so-called “green energy,” virtually all of which are located out of the state.

This law serves to raise the costs of energy for businesses and families, while making no measurable impact on global carbon emissions and failing to provide a single penny for much-needed road infrastructure improvements anywhere in Oregon. The only beneficiaries will be many of the out-of-state green energy corporations who helped sponsor the bill.

As SB 324 was racing toward passage, I had a representative of the Department of Environmental Quality (DEQ) in my Senate office. He was explaining that the transportation sector is responsible for one-third of Oregon’s total carbon output.

At the time, multiple catastrophic wildfires were burning throughout the district I represent and in other rural parts of the state. We asked the DEQ representative how much of Oregon’s carbon output results from such fires. His reply that it is not counted at all was mind-numbing! The public health impacts of such fires are severe and readily apparent. But measuring them does not appear to meet the social engineering goal of “market transformation” espoused by proponents of LCFS.

The 2016 session saw more of the same anti-business rhetoric and legislation. A three-tiered minimum wage law was enacted that is now less than two months from implementation. Ironically, many legislators who frequently complain about “income inequality” voted for this bill which codifies income inequality into law based on geography.

Another legislative priority for majority Democrats in the 2016 session was the passage of a “Coal to Clean” mandate. The law will, once again, drive up the costs of electricity for businesses and families while providing little tangible benefit for the environment.

It will double the state’s Renewable Portfolio Standard over time, and will not cause the closure of a single coal-fired generation plant anywhere, while continuing to not count our abundant hydroelectricity resources. The new law will not measurably reduce Oregon’s greenhouse gas emissions, but it will force Oregonians to subsidize “green energy” projects in other states through increases in their monthly utility bills.

In the November general election, voters will decide on other matters that will have a direct impact on employers’ bottom lines. Perhaps the most significant is Initiative Petition 28, a $6 billion tax on businesses and their customers brought forth by public employee unions. Signatures for IP 28 have been validated by the Secretary of State’s Office, meaning that the measure will appear on the ballot for the November general election.

Governor Kate Brown, who is standing for election in November to fill out the rest of former Governor John Kitzhaber’s term, has yet to officially take a position on the measure. But that does not appear to be dissuading her from making specific plans on how to spend the money it is expected to generate.

The Secretary of State’s Office will also be up for grabs this November. That position was held by Brown, who vacated it to become governor following Kitzhaber’s resignation. Brown’s appointed successor does not plan to seek a full term in office, leaving it as an open seat for the election.

Duties of the Secretary of State’s Office include overseeing its corporate division. The Democratic nominee for that position is our current Labor Commissioner. If elected, he has promised to extend its duties to include auditing Oregon corporations and clamping down on business polluters. This curious approach has been criticized in multiple editorials published by The Oregonian newspaper.

All of this comes on top of Brown’s directive to DEQ to conduct surprise inspections of businesses throughout the state in response to that agency’s apparent failure to adequately monitor alleged air pollution in Southeast Portland. She has directed the agency to make unannounced visits to these major companies throughout Oregon, regardless of any history of previous air quality violations of any kind.

Fortunately, not all of the anti-business bills that were proposed during the 2016 session were passed into law. Senate Republicans were able to use parliamentary procedures to slow down the 35-day lawmaking process.

But I anticipate the Democrat majority will reintroduce many of the bills that failed during the upcoming 2017 regular session. No amount of parliamentary procedures can forestall their passage during the long session. Three of the more business unfriendly bills will include Clean Diesel mandates, a carbon “cap and trade” plan to tax fossil fuels and state-mandated work scheduling in the private workplace.

A work group was formed to discuss potential paths forward for the state-mandated work scheduling scheme. Those collaborative efforts appear to have faltered. Last week, several of the industry associations who were included in the work group sent this letter to legislators announcing their withdrawal from it. “It was clear from the first work group discussion that this group will not provide a constructive forum to discuss whether a statewide mandated scheduling law is right for Oregon,” the letter states. “Advocates preferred broad generalized attacks on Oregon employers, rather than a reasonable discussion based on facts and circumstances unique to the reality Oregon’s employers are facing and existing employer-employee contracts.” Those organizations withdrawing from the work group include Associated Oregon Industries, the Northwest Grocery Association, Oregon Restaurant and Lodging Association, Oregon Farm Bureau, Oregon Trucking Association and the Portland Business Alliance.

The letter from this coalition of organizations that represent Oregon businesses points out that employers in this state are months away from implementing several of the aforementioned mandates. It also mentions IP 28, characterizing it as a “possible $6 billion tax, which will largely fall on the very same retailers and wholesalers this work group is targeting.”

In response, one of the Legislators heading up the work group wrote an e-mail stating that the industry associations’ withdrawal was a “very unfortunate decision on their part.” “Despite missing important organizational voices to help us understand the technical challenges that employers face, we believe that we will be able to find ways to get at that information in other ways,” he wrote. He announced his own decision to continue the work group without their input.

The foregoing rhetoric epitomizes the larger struggle our job creators face in dealing with those who would wish to tax and regulate them out of business. Far too often, politicians and bureaucrats who have little or no experience running a business decide they know what’s best for the business community, regardless of all the enumerated potential consequences. Business owners then face the choice of navigating through another maze of red tape and mandates, laying off employees to cover the costs of compliance, closing their doors permanently or moving to a more business friendly state.

Oregon’s future is dependent upon a vibrant, thriving private sector that provides opportunities for workers and a tax base to fund critical government functions. The key to a prosperous, growing private sector is the financial health of it small businesses. More than half of all new jobs are created by new and growing small businesses.

For the past several years, Oregon government has enacted myriad mandates, laws, regulations and rules that collectively make the creation and growth of small businesses difficult, if not impossible. In fact, for the first time since records have been kept, business deaths are exceeding business births. Given some of the known plans for the 2017 Legislative Assembly, it is hard to justify why any entrepreneur should attempt to start or grow a business in Oregon.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls