Carla,

You guys post a lot of this stuff showing that Oregon has a good business climate or a low business tax burden. Fine. Assuming it is true there must be something else wrong. Every recession, we have a relatively higher unemployment rate than the rest of the nation. We get in earlier and generally get out later. We are not attracting many new jobs and we are not doing a good job retaining the ones we have.

So the question is, what's wrong?

What is the downside of the positive business climate you keep talking about that continues to retard economic growth in Oregon?

Bad education system?

Land use policy?

National resource use policy?

Can we agree that having the third or fourth highest unemployment rate in the nation is an indicator that things ain't so rosy here?

I'd love to hear what people think the problem actually is, since it is clearly not tax rates (according to your studies).

Yes, I think 12.5% unemployment is very "wrong" and the actual number is probably much higher when you consider workers whose benefits have expired and people that have simply given up.

I'm just asking what you think is wrong.

Or maybe you don't think it's wrong. Maybe a lot of people think it is acceptable to have a high unemployment rate for our quality of life, although I think quality of life begins with a decent job.

Measures educational attainment, net migration and projected population growth = OREGON #6

I guess we are okay on education so we don't need any more money for that.

@Paulie said Tax avoidance has become the prominent feature of the corporate landscape in Oregon

Do you claim a standard deduction on your tax return? Do you claim a deduction for dependents? Do you claim a deduction for mortgage interest? Do you claim a deduction for charitable contributions?

If you do, I ask: "Why do you hate schools?"

Dave, I can assure you that I don't know what the magic word is for fixing Oregon's employment issues.
But I think I can tell you why we are constantly talking about the tax issue: we're always playing defense, rarely offense. Since at least the passage of Measure 5, this notion that we all pay too much in taxes has been a constant drumbeat. Republicans use it as a cudgel in practically every election.
But while we all probably wish we had a few more dollars in our pocket, the idea that Oregonians and Oregon businesses pay too much to the state simply isn't true.

Of course we're concerned about unemployment and creating job opportunities. But comparing our unemployment rates to other states may not tell the right story - it conflates many factors - two being the ease of getting a job and the desirability of a place to live.

People may be more willing to move here or stay even without work because it's a great place to live. So, all things being equal, having a higher unemployment rate may mean you simply have a place that's more desirable to live.

If you want a low unemployment state, move to North Dakota - roughly 4%. Most Oregonians without jobs aren't doing that. Why? They don't want to live in North Dakota (a lovely state, but...)

Interestingly, Oregon is #41 for regulatory environment - versus #5 for Washington.

Imagine where Oregon would be ranked with a bit less state/local government control/interference in business practices.

And with all the caterwauling that goes on about Oregon's vaunted quality of life, it's also curious Oregon is ranked in the middle of the pack here.

It wasn't that long ago (don't remember exactly when) that Intel announced they would do no further expansion in Oregon. I'd like to ask them why. Maybe it was the city of Beaverton's attempt at annexation. According to the Portland Business alliance we lost thirty thousand jobs downtown over a ten year period. I'd like to know why. OHSU promised a bazillion biotech jobs in the south waterfront, if we made the public investment, and we got none. Why?

When I served on the city's small business council we developed the following economic mantra. I think it fits. I don't normally post things this lengthy, but bear with me and let me know what you think:

When City bureaus and other public agencies concerned with development issues are pursuing redevelopment, changes to commercial corridors, or areas of commercial concentration, job retention and creation must be a primary factor. The anticipated impact on jobs through redevelopment must consider not only the number of jobs, but the wage and benefit quality of the jobs. Gentrification and densification of commercial corridors must not eliminate the availability of affordable commercial space which is vital to a wide spectrum of essential service industries. Existing industrial zones must be protected.

In order to be profitable and to create jobs, business requires a cost climate of certainty and constancy. Expanding regulations, high system development charges, the Business Income Tax/Business License Fee, retroactive tax increases and ever increasing water and sewer rates are all factors which will lead to a business decision to either leave, not expand, or not locate in the City of Portland or Multnomah County.

A sound transportation infrastructure is vital for a healthy business environment. Portland’s position as a global import/export facility is dependent upon the ability of goods and services to flow freely into and within the region. The City must be proactive in its endeavors and cooperate with both Multnomah County and Metro to prevent further degradation of our highway, rail and water transportation routes and facilities. The time and difficulty involved in offloading and transporting goods will be the primary factor in consideration of this region as a distribution center.

Small businesses and large businesses are mutually reliant. Small businesses, in most cases, rely on large businesses to purchase their goods and services. Consumer oriented businesses rely on the quality employment provided by larger businesses for the discretionary dollars which allow people to shop. Large businesses rely on the diverse range of products and services provided by the small employers. The City must recognize this mutual reliance and not adopt policies which appear to be small business friendly to the detriment of large business.

The above was adopted by the Portland city council as a policy litmus test in 2004.

Carla,

Nope, I won't. I think our legislators are unimaginative and cowardly. They go down there every session and enact measures that they know will be referred. Then they wring their hands. The whole thing is stupid.

I would however be eager to be involved in a discussion on overall tax reform for Oregon where everything, income tax, sales tax, capital gains and corporate minimums are on the table. I've advocated on this site for a sales tax and been brutalized for it.

We have a huge underground economy in Oregon and everybody operating under the radar pays no taxes. If you don't believe me, drop in to a home center in Grants Pass and watch the good old boys peel off the hundred dollar bills to pay for five hundred amp breaker boxes and halogen lamps for their agricultural endeavors. Or the day laborers making fifty bucks a day cash by working for unscrupulous contractors.

Reduce income taxes and get rid of the kicker. Slash capital gains to encourage investment. Make up the difference with a sales tax. And come to an agreement as to what is an appropriate rate of increase in state spending annually.

I'm dreaming, of course. As polarized and dysfunctional as we've become in Oregon this will go on and on. It's a shame really.

I'm a little confused about this ranking, and I didn't see an explanation of exactly how this worked.

Oregon places #10 overall on the Forbes list.

Yet the individual scores are 17 (Business cost, including tax burden); 6 (Labor, including available educated workforce); 41 (Regulatory environment); 13 (Economic climate, a shockingly high ranking by itself); 17 (Growth prospects); and 25 (Quality of life).

That first score of 17 is supposed to weigh the heaviest, though they don't explain by how much.

How does 17, 6, 41, 13, 17, and 25 (with an emphasis on that first 17) place Oregon at #10 overall? I suppose being consistently average or somewhat above is good enough, compared to other states that are below average in more than one category? Except that Texas, at #8, is below average in two categories -- including the supposedly most influential category of Business Costs. Georgia, at #6, is also below average (in the same categories as Texas, as it happens).

So I question how valuable this Forbes list is, anyway. But even taken at face value -- increasing corporate taxes will presumably drop Oregon's Business Costs ranking, which would also drop Oregon out of that top 10 position. One could argue perhaps that without increasing corporate taxes, that Labor rating (related to educational attainment) would drop (though attainment doesn't measure quality, so that's perhaps questionable). So one or the other score has to take a hit.

If you're using this Forbes list to demonstrate that Oregon is a good place to do business, then by their stated criteria it's better to take a hit to the Labor ranking than the Business Costs ranking. Thus, it would be better to sacrifice education funding than to raise corporate taxes.

According to Forbes.

So what was the point of the original post again?

Well Carla, for as much evidence as you come up with saying the new taxes won't hurt the economy the other side comes up with just as much saying they will. It doesn't make either one of you right.

And with all the caterwauling that goes on about Oregon's vaunted quality of life, it's also curious Oregon is ranked in the middle of the pack here.

and in every other ranking from various sources that I have seen over the past couple of years. We sold our souls to QOL and we seem to be loosing.

No Carla, I'm saying that I don't think the article you cited indicates that there's no reason NOT to raise corporate taxes. Which is what you seem to be saying (at least in your follow-up comments).

Reduce income taxes and get rid of the kicker. Slash capital gains to encourage investment. Make up the difference with a sales tax. And come to an agreement as to what is an appropriate rate of increase in state spending annually.

Not only do I agree with this, I would take it one step further and suggest that the bulk of the income tax rate cutting go to the middle-class as they need it the most.

I also agree that this is a dream as no one actually wants any truly dynamic changes. Not now that they have the system gamed.

"You don't raise taxes during a recession."

Barack Obama

Who is he "shilling" for?

Well Carla you implied that because I wouldn't take up your side I must support the other side. Fact is, I don't care much one way or the other. 24 out of 25 years my company has paid way more than the corporate minimum, the only exception was the one year we lost money. I don't make anywhere near 250K so this thing isn't going to affect me one way or another. I told you frankly and honestly what I thought about tax policy in Oregon and you try to spin it into something it's not. I guess in the end our exchange exemplifies what is wrong with this state. You're not going to change my mind and I'm not going to change yours. And there seems to be little ground for compromise.

So have fun blogging. I have work to do.

Given that the Forbes data has been introduced here, some number jumbling leads to some interesting results. If you sort each category and then average the overall ranking of the top 10 and bottom 10 of said category, Labor ranking seems to have the best correlation to overall ranking. Economic climate finished second.

That means we need to be focusing on: educational attainment, net migration and projected population growth as our primary economic drivers and job, income and gross state product growth as well as unemployment and presence of big companies next.

See, you can make numbers say whatever you want them to.

So if Forbes showed Oregon was #48 for business would this be a topic on BO? Of course not. You do what you accuse the other side of doing, cherry-picking an article that supports your point of view. I am going to take the word of businesspeople I know who have done business in other states and Oregon as to what constitutes good business climate. Oregon is unfriendly to business and closing your eyes to that is not going to help fix things.

I can see several reasons why this Forbes list is incomplete. First the methodology. The first column is business costs, but that only includes a cost of energy labor and taxes. That leaves out a lot. What about regulations that increase business costs? Licensing fees? Environmental impact filing fees? Worker’s comp? A lot is left out of this. Businesses are moving from Portland to Clackamas and Washington County and to Clark County Washington because of the regulatory climate, not because of taxes or energy costs. You’ll notice that in column three, regulatory environment, Oregon is 41st. If you have to pay lawyers to fight City Hall, just to get a business license that has a huge cost. Not figured in the Forbes opinion piece, however.

Column four is empirical but the others are projections and estimates.

Clearly, we will never see eye to eye. You see a need for taxes to go up and I see a need for government to shrink. For all the claims of the budget shrinking, the all-funds budget approved by the legislature and signed by the Governor still had double-digit increases in state spending from the previous 2007-2009 budget. Having the dollars consumed by government increase at a rate 3-4 times the increase in personal incomes is unsustainable. Pro-taxers miss (deliberately) the point of the average citizen’s argument. It isn’t about how high the tax rate is, it is about how government spent the last batch of money and a profound lack of confidence it will be spent any better this time around. That no matter how much money is raised from the taxpayers; government will spend all of it and then ask for more.

But if you wanted to understand that, you already would. So I will ask one more polemic question.

In light of the efforts by liberal Democrats to keep tax measures off the ballot and to overturn prior ballot measures by using the Juristocracy:

Why are Democrats so afraid of Democracy?

Oregon Unemployment Trends - August 2009

Oregon Unemployment Situation in Heat Map form: here is a map of Oregon Unemployment in August 2009 (BLS data) http://www.localetrends.com/st/or_oregon_unemployment.php?MAP_TYPE=curr_ue

versus Oregon Unemployment Levels 1 year ago http://www.localetrends.com/st/or_oregon_unemployment.php?MAP_TYPE=m12_ue

if oregon is so great for business then explain to me why comapnies are not knocking on our door to reloctae here then?if oregon is so great for business then why is our unemployment rate so high then?if our state is so business friendly then tell me all you liberals why do we need to raise taxes and fees then?vote no on jan 26 because the state govt and greedy selfish public schools who already get 10,000 bucks a kid , very generous, stable and adequate funding and have been for the last 15 to 20 years have done nothing to rein in costs and live within their means.reduce the kicker?sorry not until the bloated state govt is cut to the absolute bare bone and all non citizens and their anchor babies cut off all state services.its time the greedy selfish state govt was cut and lets see a big level of state workers laid off and their salaries and pensions reduced to what the average private sector citizen gets.lets see state workers actually have to pay fror some of their health care premiums like we in the private sector have to.enough of this baloney on all these liberal rags and blogs about how underfunded our schools and state govt are and measure 5 is the whole problem.stsate govt and school spending are the real problem and its time you liberals start holding them accountable for their spendinga nd quit blaming taxpayers for not wanting to pay more.the state and schools get more than enough money now

"I thought Obama was postponing the tax on folks making over $250,000 until after the recession, unlike the Oregon legislature."

OK, Jack, specifically, how would you have balanced the budget without tax increases? The fund sweep of Back to Basics which may have led to a legal challenge? Were there votes for cutting state police positions or programs for needy people?

Or is it all about rhetoric, not about solving real problems?

From an investor perspective in computers/electronics, Portland has a bit of a bad rep due to comparative rarity of successes. I'm not sure why this is, but the "hit rate" is low. One explanation cited often is the lack of a top-20 engineering school in-state. This puts a burden on recruiting, limits opportunities for industry/academic collaboration, and also limits the pool of local entrepreneurs that contribute to a dynamic environment. Building up the local engineering schools might be a worthwhile investment.