National Association of Manufacturers (NAM) Releases Analysis of Tax Increases

A new study released by the NAM analyzes job losses and economic harm from proposed tax increases currently under consideration in Congress. The Tax Cuts and Jobs Act of 2017 was “like rocket fuel” for manufacturers in the U.S., with manufacturers creating 263,000 jobs in 2018 alone, the best year for job creation in two decades.

If Congress decides to undo the tax reforms, negative consequences will include:

  • 1 million jobs lost over two years
  • 600,000 jobs lost per year throughout the next decade (on average)
  • $117 billion loss in GDP over the first two years

Learn more here. The NAM partnered with Rice University economists John W. Diamond and George R. Zodrow to conduct the study. Their economic modeling is widely respected and is regularly used in analyses conducted by the U.S. Department of Treasury and the Joint Committee on Taxation.
Oregon Legislature Considering Several Proposals with Impacts to Manufacturers

The 2021 legislative session is now more than halfway through, and the OBI team is engaged in several bills that may impact Oregon’s manufacturing sector. We are working hard to impact bills of concern to our manufacturing members.

  • SB 582 would require producers to join a “producer responsibility organization” to address issues and fund improvements in the recycling system. OBI has raised concerns about the cost of the bill for both the manufacturing and retail industries, and we successfully pushed for several changes, including removing a provision that would have required Oregon-specific recycling labels. We have ongoing concerns and continue our efforts to achieve modifications.
  • HB 2021 sets an ambitious goal of getting to 100% renewable, non-emitting sources of electricity by 2040. Our concerns focus on provisions that 1) require a certain percentage of energy come from community-based renewables; 2) set a prevailing wage on exclusively private-sector-funded projects and other labor standards; and 3) prohibit any future construction of natural gas-fired power plants. All of these provisions could result in increased electricity costs for the manufacturing sector.
  • HB 3372, a priority for Speaker Tina Kotek, provides the Department of Environmental Quality (DEQ) additional authority to deny, suspend or revoke a business’s permit based on their compliance history and the compliance history of separate facilities under common ownership or boards. The bill does have an amendment that contains a few improvements, but the regulated community has continued concerns. We expect this bill to pass the House, and will continue to work on it when it reaches the Oregon Senate. 
  • HB 2814, which would have regulated “indirect sources,” was amended to call for a study that examines tools and approaches to regulate construction sites, freight distribution facilities and ports. We remain concerned and are working with partners to offer improvements.
  • At a hearing on HB 5516, DEQ’s budget bill, OBI called for the need to rein in DEQ’s regulatory programs. OBI testified the number of rulemakings has increased 64% in 2021 over the average of the preceding three years OBI’s noted that DEQ needs to be looking at the big picture of how these discrete, large and intricate rulemakings fit together, as well as the cost of the complex regulations borne by industry.
  • On tax issues, OBI has stated firmly that the Legislature must hold the line on all new tax increases following the 41% increases in Oregon’s business tax burden in just three years. So far, we have not seen any major new taxes move forward, and we have successfully pushed back on some bad ideas for tinkering with the tax code: These include taxing forgiven Paycheck Protection Program loans; disconnecting from the tax provisions of the U.S. CARES Act; reducing or eliminating partnership pass-through tax benefits, and others. A few significant new taxes were proposed, including a tax on tires and the sale of off-road vehicles, and a significant hike in taxes on beer, wine and cider, but those appear dead, while a proposed new timber tax has faced significant pushback. OBI will keep a close eye on the Legislature’s tax committees right up until the Legislature adjourns. Question about tax policy? Contact Scott Bruun, OBI’s director of tax and fiscal policy.

If you have any questions about a bill, or are interested in seeing more in-depth updates, our website is updated weekly with this information. 
Proposed Portland Emissions Tax Pivots to New Stakeholder Process

Late last year, the City of Portland’s Bureau of Planning and Sustainability (BPS) proposed a new emissions tax on Portland businesses that could generate more than $11 million per year on the backs of fewer than 100 companies, including many manufacturers. OBI joined a broad coalition of businesses and organizations opposed to the proposal, and submitted formal comments in January.

We learned last month that Commissioner Carmen Rubio, newly in charge of the BPS, is moving away from the revenue-focused proposal after dozens of businesses, associations and manufacturing trades voiced concerns. Commissioner Rubio has convened a new stakeholder group to discuss proposals that complement state greenhouse gas reduction efforts and focus on air quality near underserved communities. Mayor Ted Wheeler also advocated for a delay in the process to allow businesses better opportunities to provide input and recover from the economic impacts of the COVID-19 pandemic.
Rulemaking on Cap & Reduce Program Continues

The Oregon Department of Environmental Quality’s (DEQ) “Cap & Reduce” rulemaking to implement Gov. Brown’s Executive Order 20-04 continues. The Rules Advisory Committee (RAC) is about halfway through its scheduled meetings and will wrap up on July 8 with a meeting evaluating the fiscal impact of the proposed rule. OBI’s Sharla Moffett is serving on the Rules Advisory Committee and is engaging with OBI’s Energy & Environment Steering Committee to provide comments on proposals. DEQ is halfway through the RAC process is and the regulated community remains concerned that there appear to be more questions than answers about how the program will work and what it will cost. OBI and other regulated stakeholders have pushed DEQ to be more transparent in its modeling assumptions and other key policy design questions so DEQ’s work can be better evaluated. OBI has significant concerns that the program will result in major cost increases for both natural gas and transportation fuel. OBI will remain heavily involved in this process and is committed to representing the best interests of our manufacturing members throughout.
OBI Manufacturing Council to Resume in 2021

OBI is proud to represent hundreds of manufacturing businesses in our advocacy work at the Legislature and before state agencies. We are excited to be bringing back an OBI Manufacturing Council, which was a tradition of our predecessor organization, Associated Oregon Industries. The Council will look at laws and regulations impacting the manufacturing sector in Oregon. We are also working with our partners at the Oregon Business Council on a strategy to ensure Oregon remains a place where manufacturing jobs can thrive and grow.

OBI’s Tax & Fiscal Policy Director Scott Bruun will be leading the effort. Please email him if you are interested in participating.
Staff Spotlight: Sharla Moffett

Sharla Moffett is OBI’s director of energy, environment, natural resources and infrastructure – which means she is our go-to expert on all policy that impacts the daily operations of our hundreds of manufacturing members.

She staffs our energy and environment, air policy and water policy committees, as well as our transportation committee. If you are interested in participating on one of these committees, get in touch with Sharla.

Sharla started at OBI in January 2019, bringing broad experience in the environment, natural resource and manufacturing sectors. Before joining OBI, she served as director of government relations for the Western Wood Preservers Institute. Her experience extends to the national level, where Sharla staffed the U.S. Senate Committee on Environment and Public Works and the House Committee on Agriculture. She began her career working on federal timber supply issues with the American Forest & Paper Association. Sharla is a fourth generation Oregonian and an Oregon State University alumnus. She has three daughters and lives in Portland.

Why advocate for manufacturing? Here’s what Sharla has to say.

"Advocating for manufacturing in Oregon is critical. Manufacturing – human ingenuity turning materials into essential products – has always been exciting to me. Until you see the inside of a manufacturing facility, it’s hard to fathom the complexity, precision and the hundreds or thousands of mechanisms and other technology that has to function perfectly every single day.

Manufacturers have to do more than produce a superior product that consumers want to buy; they must also comply with myriad laws and regulations that protect human health and the environment. All of this has to be accomplished at a price that consumers are willing to pay.

Few businesses have the bandwidth to carry out the essential daily tasks at their facilities and engage in advocating for reasonable public policies that do not result in overly burdensome, costly regulatory programs. With well over 300 manufacturing members, OBI is proud to be a voice for manufacturing at the Oregon Capitol and in regulatory arenas. Please let me know how OBI can help:"
Are you taking full advantage of your OBI membership?
Oregon Business & Industry
1149 Court Street NE
Salem, OR 97301