Capitol Gains: Pressure builds as legislature nears session's end

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Archives - June 2007
Friday, June 01, 2007
t_AbrahamHyatt By Abraham Hyatt

So many questions, so little time June 30. That’s when the Legislature says it’s going home. And as the pressure mounts, it’s anybody’s guess how some of the year’s top issues will play out. One thing is for sure, two interconnected topics are going to dominate headlines this month: the budget and taxes.

And it’s over taxes — whether on cigarettes or corporations — that any lingering happy-happy-let’s-work-together rhetoric that marked the opening of this session is likely to fall to pieces.

“Anything the current regime can think to tax, they will,” Senate minority leader Ted Ferrioli, R-John Day, says. “Buckle up.”

THE WAITING GAME

Where do business-related issues stand in these final days? “Snake bit” and “floundering” is how Lynn Lundquist, president of the Oregon Business Association, respectively describes the corporate minimum tax and the extended bottle bill, which his group has been working to get passed.  

But as if to demonstrate how mercurial things will get as the clock ticks down, the bottle bill — which would add various kinds of bottled flavored water to the state’s milestone law — cleared its last House committee two days after Lundquist’s assessment. As of the middle of May, the House has yet to vote on it.

It’s got to prompt a little nail biting. John Ledger, vice president of external affairs at Associated Oregon Industries, says that 90% of their big-ticket agenda items — such as the renewable energy bill, which they oppose, and the corporate minimum tax, which they support — will be decided in the last three weeks of the session.

The biggest determining factor in what bills get passed may be this: In the House, Democrats are five votes short of the three-fifths majority they need to slam-dunk the kind of tax increases that accompany some major bills. As the clock ticks down, they may not have anything to offer Republicans in exchange for extra votes.

GIVE AND TAKE

Of the $80 billion the nation spent on gift cards last year, $8 billion went unclaimed. No one can say for sure how much of that sits forgotten in the wallets and purses of Oregonians, but a new bill may shift some of that money out of businesses’ accounting spreadsheets into a $15 million to $35 million annual windfall for the Common School Fund.

THE SCORECARD

s_ArrowUp

35,000 BAR EMPLOYEES: Despite a possible $40 million hit to state coffers because a possible business fall-off, it looks like a smoking ban in bars is likely to pass. Possible downside: Discarded butts on sidewalks could end up in the state’s waterways.

s_ArrowSideways

A SALES TAX: The perennial redheaded stepchild is back, this time as a plan that would cut income and property tax while creating a 5% tax. Prognosis: very grim. However, a proposed commission to study a sales tax could bring new ideas to the next session.

s_ArrowDown

KULONGOSKI’S HEALTHY KIDS: It was the first fiery wreck of the session, thanks to the cigarette tax that would have funded the program. As of mid-May, there’s a quiet effort to revive it. A doomed attempt at saving face? A hint of backroom deal making? It remains to be seen.

The idea, introduced by Bend Democrat Sen. Ben Westlund (is there anything he’s not involved in this year?), would treat gift cards like other kinds of abandoned property, like forgotten bank accounts or unclaimed tax refunds. Three years after a card was last used (or if it was never used, three years after it was purchased), the value would end up as unclaimed property with the state. Today, it’s often counted as profit by the issuing company.

In an effort to make the bill more amenable to business interests, Westlund’s camp has added amendments so that SB 460 would exclude gift cards issued by banks, cards that encompass multiple stores, and cards that are used in promotions.

Will it be enough? Harry and David president and CEO Bill Williams was concerned enough about SB 460 when it was introduced that he called Westlund personally to talk about it, says company spokesman Bill Ihle.

But when asked what their current position on the legislation was, Ihle’s answer reflected the sense of unknown that pervades this point in the session: The company can’t comment, he says, because it’s unknown what’s going to happen with the bill.

A MEASURE OF THEIR LEADERSHIP

There are two ways to look at the Legislature’s decision to hand an amended version of Measure 37 back to the voters: politically necessary, or totally chicken.

The chicken argument goes like this: Why do voters need to tell Salem for the third time what they think? “[The Legislature] should have worked on it until they found some fix or until they had bipartisan support,” says Lundquist. “I just think this is really bad for the state.”

But, says the counterargument, it was voters who came up with this in the first place. It makes sense that they clarify the law.

If there’s an answer, we’ll know it on the final day of June. On that day, with the 2007 session in perspective, it’s going to become clear if the Measure 37 pass-off was indicative of senators and representatives taking the necessary steps to get things done, or simply an example of another year in which the Legislature couldn’t follow through on its early promises of leadership.


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Editor's Letter: Power Play

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There’s a fascinating article in the December issue of the Harvard Business Review about a profound power shift taking place in business and society. It’s a long read, but the gist revolves around the tension between “old power” and “new power” as a driver of transformation. Here’s an excerpt:

Old power works like a currency. It is held by few. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven. It downloads, and it captures.

New power operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. It uploads, and it distributes. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The authors, Henry Timms and Jeremy Heimans, don’t necessarily favor one form of power over another but merely outline how power is transitioning, and how companies can take advantage of these changes to strengthen their positions in the marketplace. 

Our Powerbook issue might be viewed as a case study in the new-power transition. This annual book of lists provides information on leading businesses, nonprofits and universities in the state. Most of the featured companies are entrenched power players now pursuing more flexible and less hierarchical approaches to doing business. Law firms, for example, are adopting new technologies and fee structures to make legal services more accessible and affordable.

This month we also take a look at a controversial new U.S. Securities and Exchange Commission rule requiring public companies to disclose the median pay of workers, as well as the ratio between CEO and median-worker pay. 

Part of the 2010 Dodd-Frank financial reform law, the rule will compel public companies to be more open about employee compensation, with the assumption that greater transparency will improve corporate performance and, perhaps, help address one of the major challenges of our time: income inequality.

New power is not only about strategy and tactics, the Harvard Business Review authors say. “The ultimate questions are ethical. The big question is whether new power can genuinely serve the common good and confront society’s most intractable problems.”

That sounds like a call to arms. Or a New Year’s resolution. Old power or new, the goals are the same: to be a force for positive change in the world. Happy 2015!

— Linda


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