Oregon’s largest business associations called on the state to enact broad, temporary tax cuts to help employers manage the coronavirus fallout, which already has triggered hundreds of restaurant closures and threatens scores of other businesses.
State economists issued an update to Oregon’s quarterly revenue forecast Tuesday, warning they now expect a recession – an event that seemed extremely unlikely just a few weeks ago.
“It is likely that until the public health situation improves, or at least the fears subside as health policy plans are announced, the economic damage will continue to mount,” they wrote.
With Gov. Kate Brown’s order Monday that restaurants and bars must close, except for takeout and delivery service, the number of layoffs statewide is surely already in the tens of thousands. Unemployment filings overwhelmed the Oregon Employment Department’s website for parts of Monday and Tuesday.
“People are really afraid right now. I have never heard this level of concern,” said Sandra McDonough, CEO of Oregon Business & Industry, the state’s largest business organization. She said businesses are anxious for tools the enable them to keep operating and keep their workers on the job.
Brown indicated Monday she expects to call a special session of the Legislature to deal with the crisis but hasn’t set a timetable for doing that.
The governor agrees with the business groups on shoring up unemployment insurance and taking other steps to protect workers and employers, according to Christian Gaston, workforce and labor policy advisor to Brown.
However, he said her office wants to protect employees affected by the downturn, too.
“We need to have a broader conversation about the balance that we need to strike here between the need for critical, social safety net programs..and flexibility to ensure that businesses can remain open,” Gaston said.
In addition to OBI, organizations that signed the letter include the state’s largest business organization, Oregon Business & Industry, the Portland Business Alliance, the Oregon Homebuilders Association and the Oregon Farm Bureau.
Among other steps, the business associations want Oregon to suspend its new, corporate activity tax that took effect at the start of the year. The tax aims to raise $1 billion for schools and early childhood education – money schools have already begun spending.
The businesses also want local governments to postpone consideration of other new taxes but didn’t identify any proposals specifically. Regional government Metro plans to put a $250 million tax on May’s ballot to pay for homeless services. Other large taxes in the planning stages would pay for transportation improvements in the Portland area and would remodel Portland schools.
“We are encouraging elected officials to work together with employers to build a plan that protects the future of jobs in our state and region,” said Andrew Hoan, CEO of the Portland Business Alliance. The PBA endorsed the tax for homeless services Monday and Hoan said his organization is maintaining its support for that measure.
However, several other regional business groups said Monday they want the homeless tax measure pulled from the May ballot.
Other recommendations the business organizations made Tuesday include:
· Transferring last year’s corporate kicker tax rebate to the state’s unemployment insurance fund and making it easier and faster for workers to claim benefits.
· Suspending payroll taxes for small businesses.
· Create a tax credit for restaurants and hotels.
· Establish tax credits when businesses spend money to retain jobs or award time off.
· Extend tax filing deadlines.
· Offer low-interest and no-interest loans.
· Lift restrictions on manufacturing workers’ hours.
On Tuesday, McDonough said she had spoken with the governor and believed Brown is open to making changes.
“She didn’t reject anything out of hand. She knows businesses are hurting,” McDonough said. “What I’m hearing is an openness to a discussion about all this.”