Transcript Welcome Oregon Mayors Association Newport, Oregon July 28

Welcome
Oregon Mayors Association
Newport, Oregon
July 28, 2006
Introductions
Oregon’s Small Business Landscape:
Issues, Views & Taking Action
~ Panel Discussion ~
 Christine Chin-Ryan, Chair GSBC
President, Synergy Consulting, Inc., Portland
 Wanda Henning, GSBC Member
President, Creditor’s Collection Service, Newport
 Stephanie Bailey, GSBC Member
Executive Director, Klamath County Chamber of Commerce
 Fred King,CEO, Hollander Consultants, Tualatin
 Victoria Pruett, GSBC Ex-Officio Member
Manager - Small Business Programs, Oregon Econ. & Comm. Development Dept.
 Facilitator: Lou Ogden, Mayor of Tualatin
Today’s Discussion
 Look Who’s Talking and About What:
Governor’s Small Business Council on
Small Business Issues in Oregon
 Critical Topics for Small Business
 Healthcare
 Drug-Free Workplace
 Newport & Lincoln Area Impacts
 Tax Reform
 Your Local Views and Future Actions
Recognizing that small business is the
lifeblood of a healthy Oregon economy,
former Governor John Kitzhaber created the
eleven member Governor’s Small Business
Council by executive order in 1998.
Governor Ted Kulongoski has emphasized
his commitment to continued focus on
critical small business issues through the
Council’s efforts.
GSBC Mission
To improve the
development,
growth and
vitality of
Oregon’s small
businesses.
Purpose
To develop
recommendations
on best practices
for promoting the
growth and
economic vitality
of Oregon’s small
business sector.
Membership
Small business owners & managers
representing diverse sectors & regions
Key educational & economic
development organizations from
around the state
Members
 Christine Chin-Ryan, Chair, Synergy Consulting, Inc., Portland
 Ike Apodaca, Vice Chair, Donde Marketing, Medford
 Eric Blackledge, Blackledge Furniture, Corvallis
 Samuel Brooks, Brooks Staffing/OAME, Portland
 Gary Cardwell, NW Container Services, Portland
 Steven R. Emery, EARTH H2O, Culver
 Jeffrey Harman, Joseph Bronze, Joseph
 Wanda C. Henning, Creditors Collection Service, Newport
 Ilene K. Kleinsorge, Oregon State University, Corvallis
 Daniel J. McMorris, Yoshida Group, Portland
 Stephanie Bailey, Klamath Chamber, Klamath Falls
Ex-Officio Members

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Bill Carter, OR Small Business Development Centers
Chris Chandler DiTorrice, Central Coast EDA
Jerry Gardner, Oregon Dept. of Agriculture
Chuck Jones, The H Group, Inc.
Christine Krygier, OR Small Business Development
Centers
Maria McKissen, U.S. Small Business Administration
Lydia Muniz, Governor’s Advocate MWESB
Jennifer Nolfi, Portland Development Commission
Victoria Pruett, Oregon Economic & Community
Development
J.L. Wilson, National Fed. of Independent Businesses
Oregon’s Small Businesses
O.R.S. Definition:
A manufacturing business having
200 or fewer employees, or all
other forms of business having
50 or fewer employees.
Source: ORS 285B.123(3)
There are 100,094 small businesses in Oregon.*
*Source: Oregon Employment Department
2005 Small Business Profile (100 or fewer employees)
Why Small Business?
• Small business accounts for 43.7% of total private
sector payroll
• Small business generates 51.3% of the state’s jobs
• Approximately $20.5 billion in small business payroll
will contribute over $1.13 billion to state revenues*
in 2005. (In fiscal year 2004-05, total state revenue
from personal income tax is estimated to be $4.7
billion.)
• *Based on the Oregon Department of Revenue’s
effective tax rate of 5.5%"
Why Small Business?
43.7% of Oregon’s payroll generated by businesses
with less than 100 employees
2005 State of Oregon Annual Payroll
by Business Size
0
<1%
1-4
6%
500+
33%
5-9
6%
10-19
8%
20-49
12%
250-500
10%
100-249
14%
2005 annual payroll by business size
Source: Oregon Employment Department
50-99
11%
Why Small Business?
51.3% of Oregon’s jobs come from small businesses
with less than 100 employees
2005 State of Oregon Annual Employemnt
by Business Size
1-4
7%
500+
27%
5-9
8%
10-19
10%
250-500
9%
100-249
14%
50-99
11%
2005 annual employment by business size
Source: Oregon Employment Department
20-49
14%
2006 Action Plan
Provide an updated position statement
to the Governor on issues impacting
small businesses
1. Identify important issues from the
members’ perspective, with emphasis on
critical actions.
2. Confirm these issues accurately reflect the
views of Oregon’s small business owners.
3. Be a representative voice for small
business during the next legislative
session
September
May
Jan
Mar
Nov
July
2006 Meeting Locations
6 Meetings – 4 Cities
Key Issues Identified 2004-2005
Members’ Perspective
 Insurance
Health
Liability/Workers’
Compensation
 Access to Critical
Resources
Capital
Human Resources
 Taxes
 Marketing/Sales
 Transportation
 Sustainability
Insurance
Cost and availability of health and
liability insurance is top concern
for small businesses.
 Expand concept for using state’s insurance
pool for businesses up to 100 employees.
 Oppose dissolution or conversion of SAIF.
 Support efforts and small business
perspective in with the Senate Healthcare &
Affordability Committee, including incentives
for small businesses providing benefits
Resources: Access to Human Resources
Businesses need access to workforce
development resources.
 Insure small businesses are adequately
included in grants awards from the Employer
Workforce Training Fund.
 Assure integration of small business
development center services, post secondary
education resources and economic
development assistance to support the needs
of Oregon’s small businesses.
Resources: Access to Capital
Small business’ contributions to a sound
economy & job creation require access
to competitive capital.
 Advocate for public/private capital
resources to finance potential
development, growth and expansion of
small businesses.
Taxes
Existing tax structure has negative
impact on small business
success and growth.
 Recommend new tax incentives to
encourage businesses to start-up, expand
and/or move to Oregon.
 Support legislation to stimulate economic
growth in Oregon with a neutral tax revenue
stream to the state.
Marketing
Domestic/international sales & marketing
are essential for small business
success and growth.
 Encourage investment in programs
involving mentorship, advising, technical
assistance and relationship-building skills.
 Support activities that increase small
businesses’ ability to develop, market and
sell their goods and services.
Transportation
Developing, maintaining and enhancing
Oregon’s multi-modal transportation
infrastructure is one of the state’s
greatest challenges.
 Support a cooperative statewide approach
linking transportation funding and industrial
land development. (2005: Connect Oregon I
$100m; 2007: Connect Oregon II $100m)
 Advocate a statewide plan to expand the
capacity and access of regional airport
infrastructure.
Sustainability
Sustainability is misperceived as a
contributing factor to increased
business costs.
 Work with the Governor’s Sustainable
Leadership Team in researching and
identifying sustainable business practices.
 Provide education to businesses and
consumers on the advantages of
sustainable business practices.
2006 Critical Issues:
Small businesses around the state say
these issues need action now.
 Affordable healthcare and
access for the under-insured
 Impacts of drug-use in the
workplace
 Tax burden: income, capital
gains, and property
Health Care
Christine Chin Ryan
Chair, Governor’s Small Business Council
Ask for Your Ideas on Health Care Issues
Ask You to Provide Input on Specific Issues
via GSBC Questionnaire
Health Care
Pressure Is On To Reform Health Care
System In Oregon
Current Efforts

Senate Children’s Health Care Committee (Healthy Kids Plan)

Senate Health Care Access and Affordability Commission

Oregon Health Policy Commission (executive branch)
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Former Governor Kitzhaber’s Archimedes Movement

Several ballot initiatives (one currently that has collected enough
signatures, but questionable if sufficient number of valid signatures to be
on November ballot)
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Numerous health care advocacy movements pressing for major reforms

All of the above points to the concern of Oregon stakeholders (state,
employers, advocates, providers) that we address health care reforms
Major Issues
•
Recruiting and retaining good workers by providing good benefits
•
Recognizing that providing the benefits must be balanced with
financial ability to maintain benefits while staying competitive.
•
Specifically in reference to the health care benefits:
 Increasing cost of health care premiums
 Dropping coverage altogether or cutting benefits
 Having to “cost shift”
 Regulatory requirements that drive up costs
 Large and continuously growing number of uninsured
Major Trends Shaping Health Care Benefits Today
•
Employer-sponsored insurance is shaped by the growing costs and other
factors of the broader health care marketplace
•
Transparency is needed in the marketplace for employers as purchasers
to know what they are buying
•
A business that offers good health care and good wages may have
trouble attracting good workers because of poor schools and underfunded communities, etc.
•
The health care system must seriously look at cost-containment
Solutions Under Discussion
Parts of the Massachusetts’ plan
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Senate Commission on Health Care Access reviewed components of the plan,
specifically what if Oregon combined its individual and small group market
Senate Commission basically concurred that Mass model would not work for Oregon
based on differences between two states (# of uninsured, etc.), but that components may
be worth considering
“Pooling” of various health care dollars being consider to make sure all
Oregonian have access to “essential” benefits
Another approach or ideas to the above would allow employers who already offer
what the state considers “essential benefits” to be exempt from the pool
Ways to maximize Medicaid dollars as we get large match amounts from the
federal government, and programs like the Healthy Kids Plan would help
pick up health care costs for a lot of uninsured and low income workers
children
Recognizing and exploring cost-containment
What you can do
 Mobilize small businesses in your area to provide feedback to
us using the questionnaire, the link will be provided
 Be a sounding board and work with us on finding solutions
 Contact us and share your suggestions and ideas
 Participate in the legislative session-testify at hearings, call
your elected officials, motivate small businesses in your area
to do the same
Questions and Comments
Drug-Free Workplace
How some organizations and employers are
making a difference for
Oregon’s small businesses
presented by
Stephanie Bailey & Wanda Henning
Drugs and Our Communities
Importance of Creating Drug
Free Workplaces
Importance of Creating Drug
Free Workplaces
presented by
Stephanie Bailey
Presentation Overview
 Impact of drugs on our cities
 Drugs and our businesses
 Building a drug-free workplace
 Drugfree Workforce Partnerships –
Local and State
 How you can help
Impact of Drugs on our Cities
 More than 75% of “direct” drug cases
involve Methamphetamines.
 Local law enforcement estimate that 80 to
85% of property crimes, identity theft and
fraud are Meth related.
 Health effects of drug-use overburden local
health treatment facilities.
 Drug abuse increases use of child services.
 Businesses lose millions each year by
employees who use drugs
Drugs and the Workplace
 Three fourths of illicit drug users and heavy or
binge drinkers are employed.
 Drug use costs U.S. employers $75-$100 billion per
year.
 60% of Oregon businesses identify drug use as a
“great” concern yet only 25% have comprehensive
drugfree programs in place.
 In 2003 60% of Oregon employers identified on-thejob drug use as a great concern.
 Rate of drug use among unemployed is twice as
high as among employed, yet the workforce system
is “disincented” to refer job seekers to treatment.
Building a Drugfree Workplace
 Oregon businesses invest $50 million
annually in drugfree workplace programs.
 Raise legislator awareness of impact of
drugs on workplace safety and productivity.
 Consider supporting tax incentives to small
businesses for implementing drugfree
workplace policies.
 Look into efforts to require drug screening
as a requirement before receiving
unemployment benefits.
Drugfree Workplace Partnerships –
Local & State
 Create local business drugfree
workplace committees in each
community.
 Educate and mobilize the business
community.
 Establish a systematic statewide
business community effort in Oregon.
 OBP goal of 75% of workplaces in
Oregon drugfree by 2008
How You Can Help
 Increase your awareness of drugs in the
workplace and in your communities.
 Help work with OBP and local efforts to
create drugfree workplaces.
 Be a sounding board for the GSBC as we
move forward
 Provide feedback on impacts drug
use/abuse have on your communities small
businesses.
Fiscal Reform:
Finding a balanced solution
Stable Revenue System with Reduced Tax Burden
Tax Reform – Kicker Reform – Budget Reform
presented by
Fred King
Fiscal Reform:
Finding a balanced solution
The Blueprint
Democrat, Republican and Independent
Legislatures have come together to
present a blue print for a more stable state
financial future.
A plan the requires input from all
Oregonians.
Comprehensive Solutions For Fiscal Reform
 Accountability in government
 Budgeting Process
 Efficient Spending
 Reduce the Total Tax Burden
 Stable Revenue Source
 Saving for the Future
 The solution required are comprehensive:
 We need greater accountability in government in how the
Legislature budgets and how state agencies spend.
 We have the opportunity to reduce Oregonian’ total tax burden.
 We need more stable revenue sources.
 And we need to save for the future.
 Oregon’s unique state tax system stands out very clearly when
compared with national averages.
 72% of Oregon state taxes come from the personal income tax- this is
the highest percentage reliance on a single tax among all statesWashington is second with its dependence on the sales tax.
 For the states as a whole personal income tax account for 34.1% of
tax collections while the general sales tax accounts for 32.7%.
 What are the objectives of tax reform?
 To strengthen the economy; reduce taxes;reduce volatility; and increase
revenue.
 Whoops!! How can you reduce the tax burden and increase
revenue??!!
 10% of taxable income is unreported
 Illegal drug economy pays no taxes for its ill-gotten gains
 Businesses will change from contributing 32% of the state’s revenue to
37% by shifting the cost of a consumption tax to their products.
 Tourists
 The combination of income tax cuts & property tax relief- Including
renter relief- - is designed to reduce the tax burden for households of
4 across the income spectrum.
 How can taxes be cut for all these typical households while at the
same time raising revenue?
Answer: spreading the tax base to business, out-of-state taxpayers and
activities not currently picked up by the income tax
These numbers are based on a fully implemented plan
for two years. In implementing an actual reform package
different elements would be phased in at varying times
thereby affecting the revenue impact numbers.
 Oregon’s Tax Incidence Model (OTIM) – projects that jobs and
investment will be higher after the economy adjust to the new tax
system. The basic reason for this is that personal income taxes
depress state economic activity more than consumption taxes.
 This does not mean that all sectors will gain- there will be some
downsizing – for example border retail trade activity– but in net the
state’s long term economic model is showing that the economy will
be better off in terms of both jobs and investment.
Continuous Improvement
Reduce Cost
Improve Quality
Change Bureaucratic Culture
Track Expenditures/Measure
Performance
What You Can Do
Give feedback on the items that impact small
business.
During the legislative session- testify at
hearings, call your elected officials, and
encourage other small businesses to do the
same.
Thank you
Questions & Comments
Your Local Views and
Future Actions:
How does this impact your cities?
How can we best work together to
implement change?

What are your small businesses saying?

Getting Feedback: On-line questionnaire

2007 Legislative Session: Working together
Coos Bay
Upcoming Meetings
September 20th:
November 8th:
Welches
Salem
Senate Comm. on Healthcare Access & Affordability: August 18th in Wilsonville
Jt. Interim Committee On Econ. Development:
Aug. 17th in Astoria
Oregon Innovation Council:
September 7th in Portland
OECD Commission:
Nov. 3rd in Bend/Redmond
We Want To Hear From You…
We encourage you to participate in the
on-line questionnaire @
http://www.oregon-smallbiz.com
(Results will be reported to Governor.)
Or email us at:
[email protected]
Thank you!