Here’s how the new forecast looks:

The dark blue columns are actual data (though subject to revision by the government), and the light blue columns are my forecast growth rates.  The red line is the average growth rate of all the post-World War II recoveries.  I’ve posted information showing that typically, more severe recessions result in stronger economic recoveries.  So any forecast underneath that red line is being very conservative.

A key driver of the turnaround in growth is the inventory swing.  The latest GDP numbers show a faster recovery of business equipment spending, consistent with reports from high tech companies (such as Cisco’s recent sales and earnings report).  I had expected more of a post-cash-for-clunkers slump in consumer spending than we actually got, suggested a bit more resilience out there.

Every time I release a forecast that is not totally doom and gloom I get mail from folks reminding me of the deficit, bad policy, high unemployment, etc.  I suggest that you extreme pessimists pull data on the long-term growth of the economy, and then argue that the problems we have now are worse than the Civil War, Great Depression, dismantling of the British Empire, World War II, and rise of disco music.

Offering more flexible work arrangements - 28%
Investing more in training - 21%
Promising future benefits (raises  when the economy picks up) - 18%
Offering more performance-based incentives (trips, bonuses) - 16%
Providing higher salary without the title - 11%
Providing both higher title and salary - 10%
Providing higher title without the salary - 7%
We haven’t been able to hold on to top talent - 6%

CareerBuilder Survey:  - While hopeful economic news has some companies breathing a cautious sigh of relief when it comes to headcount, others continue to face staffing challenges. According to a new CareerBuilder survey, being able to provide competitive compensation (34 percent), maintaining productivity levels (33 percent) and being able to retain top talent (31 percent) are organizations’ top staffing concerns this year. The survey was conducted between November 5 and November 23, 2009, among more than 2,700 employers.

In addition to salary and productivity, a variety of retention issues are worrying some organizations this year as they try to maintain staff levels in the recession rebound. Worker burnout (30 percent), being able to provide upward mobility (25 percent) and difficulty strengthening employment brand after layoffs or cut backs (10 percent) are concerns for companies trying to preserve their employee base.

When asked how they will hold on to top talent this year, employers reported the following:

Offering more flexible work arrangements - 28 percent
Investing more in training - 21 percent
Promising future benefits (raises or promotions when the economy picks up) - 18 percent
Offering more performance-based incentives (i.e., trips, bonuses, etc.) - 16 percent
Providing higher salary without the title - 11 percent
Providing both higher title and salary - 10 percent
Providing higher title without the salary - 7 percent
We haven’t been able to hold on to top talent - 6 percent

“Retention is just one area that companies will need to address to maintain and grow their businesses this year,” said Jason Ferrara, vice president of corporate marketing for CareerBuilder. “Having the right people on board is a top concern. Our survey found that forty percent of companies are concerned about top workers leaving their organization in 2010 and that nearly one-in-five think morale at their company is poor. At the same time, companies have their eyes on future hiring challenges, especially as the economy moves into recovery.”

Looking ahead to upcoming recruitment needs, companies also said they will face hurdles related to hiring. Twenty-one percent of employers are concerned that won’t be able to find qualified candidates, while 12 percent may not have the budget available to recruit. And five percent don’t have the time to recruit.

Survey Methodology
This survey was conducted online within the U.S. by Harris Interactive© on behalf of CareerBuilder.com among 2,720 hiring managers and human resource professionals (employed full-time; not self-employed; non-government; with at least significant involvement in hiring decisions); ages 18 and over between November 5 and November 23, 2009, respectively (percentages for some questions are based on a subset of U.S. employers , based on their responses to certain questions). With a pure probability sample of 2,720, one could say with a 95 percent probability that the overall results have a sampling error of +/- 1.88 percentage points, respectively. Sampling error for data from sub-samples is higher and varies.

The University of Oregon Index of Economic Indicators™ rose 1.2 percent in December to 86.8 (1997=100) from a revised November figure of 85.8.  Since reaching a low in July 2009, the UO Index has risen for five consecutive months as the Oregon economy pulled out of recession. The UO index was revised to account for an annual update of seasonal adjustment and standardization factors; the revisions resulted in only minor quantitative changes.

Highlights of the report include:

•    Labor markets showed welcome signs of improvement. Initial unemployment claims continue to edge down, signaling a slow but steady reduction in the pace of layoffs, while employment services payrolls – largely temporary employment firms – extended the previous month’s modest improvement, rising to the highest level since last July.  This is a sign that some firms need to bolster their workforce in the face of firming economic activity.  Note that overall nonfarm payrolls posted a 2,900 gain on employment increases in manufacturing, education and health services, and the trade, transportation, and utilities sectors.

•    Residential building permits rose again (seasonally adjusted and smoothed), continuing the improvement from this summer’s lows.  Even with the gains, however, residential construction activity remains at very low levels and the industry remains susceptible to decreasing federal support in the months ahead.

•    In a very positive development, orders for core manufactured goods rose again, signaling further improvement in business confidence.  Pent-up demand from firms that delayed capital purchases during the financial crisis combined with firming economic activity is bolstering manufacturing orders, which will in turn help support Oregon’s manufacturing sector.

•    While the Oregon economy, like the national economy, is no longer in recession, considerably uncertainty about the pace of the recovery remains. The combined impact of inventory correction, pent-up demand, and fiscal and monetary stimulus greatly supported economic activity at the end of 2009.  The underlying rate of growth may prove disappointing and unable to sustain strong, consistent improvement in labor market conditions as the impact of these forces wanes in the months ahead.

Timothy Duy
Director, Oregon Economic Forum
Director, Undergraduate Advising
Department of Economics
University of Oregon - 1285
Eugene, OR 97403-1285

It’s always risky to misclassify someone who should be an employee as an “independent contractor,” but President Obama’s 2011 budget proposal will increase the risks for employers.  According to this budget summary from the U.S. Department of Labor, the misclassification of employees as contractors is estimated to cost the Treasury Department over $7 billion in lost payroll tax revenue over the next ten years.  To help make up for this shortfall, the proposed budget includes funds earmarked for a “joint proposal” between the DOL and the Treasury Department to eliminate legal incentives for such misclassification, and an additional $25 million to target misclassification with 100 additional enforcement personnel and competitive grants to boost states’ incentives and capacity to address this issue.

If this budget provision goes into effect, employers will need to be particularly careful not to misclassify employees as contractors.  Of course, it’s already a risky proposition to misclassify employees as contractors.  For example, as we reported back in 2008, FedEx was on the wrong end of a $14 million award after a California court concluded that the shipping giant misclassified hundreds of drivers as contractors.  Lawsuits in this area are common, ranging from individuals seeking unpaid wages and overtime to multi-million dollar class actions.  Federal and state governments are also known to go after employers for unpaid payroll taxes and associated penalties.

Are you concerned that your independent contractor might actually be a misclassified employee?  The IRS has published this handy information on how to determine whether the employee is correctly classified.  There is even an IRS form (Form SS-8) that you can file to seek the Service’s help in determining if your employee is correctly classified.  Of course, if you believe that you have misclassified employees working as contractors, it might be a good time to contact your labor and employment attorney.

February 2010 Talking Points on Education and Fiscal Policy

1. Senator Diane Rosenbaum (D-Portland) is introducing legislation – SB 1045 – that would prohibit employers from using credit reports to make employment decisions. Over half of Oregon employers use these types of reports in hiring key personnel, usually in positions of “trust” (handling company assets, customer assets, or sensitive information).  The AOI Board of Directors voted to oppose this legislation as introduced, but AOI will work with the sponsor and others to explore opportunities to make the legislation workable for employers.

2. The legislature is planning to move a $19 million emergency unemployment benefit extension that would fund most claimants for an additional 4-6 weeks of benefits. This is money previously allocated for emergency benefits last year that has not been utilized.  The $19 million will not impact employers’ unemployment tax rates.

3. The House Business Committee will introduce yet another re-write of the “employer gag bill,” again at the behest of the AFL-CIO. This is the second re-write in addition to the passage of the original SB 519 last year.  The new bill will expand the political content that employers are prohibited from discussing with employees to include ballot measures.  However, the new bill will specify that employers are allowed to hold mandatory meetings on such things as workplace safety and other topics directly related to the job.  AOI’s legal counsel has assured AOI that the new bill will not sidetrack our pending federal lawsuit challenging the validity of SB 519.

AOI’s lawsuit against SB 519 (2009) is progressing toward a hearing for Summary Judgment in early April in federal court in Portland.  AOI, in conjunction with the US Chamber of Commerce, is challenging SB 519 as an illegal intrusion on federal labor law as well as an unconstitutional abridgement of an employer’s First Amendment free speech rights.

4. Representative Nick Kahl (D-Troutdale) will introduce legislation to include banks and insurance companies under Oregon’s Unlawful Trade Practices Act. The new legislation – HB 3615 – will be opposed by a wide array of industry groups.

Valero Energy Corp. is selling oil refineries that it had bought a few years ago.  We used to have a shortage of domestic refining capacity, but now we have an excess—even though there has not been a new refinery built in the United  States in years.  Capacity at existing refineries was expanded through new technology, our demand for refined products lagged, and imports of refined products have increased, thanks to expanded capacity overseas.  (It used to be that only crude oil was shipped in, but now gasoline and diesel are imported in tankers.)

Who would buy those refineries from Valero?  One very sharp businessman named  Thomas  O’Malley, the same guy who sold the refineries to Valero back in 2005.  He’ll likely pick up his old properties at a steep discount to the price he received for them near the peak of the market.  The Wall Street Journal quotes O’Malley:  “Markets don’t stay bad forever.”

O’Malley sounds wise, but let’s no go overboard. The buggy whip market never did come back.  Carburetors, vacuum tubes, asbestos ….  The list goes on.  Here’s how we economists think about these things.  Begin with a long-term trend.  (We often say a “secular” trend.)   That could be upward (Internet advertising) or downward (newspaper readership.)  Now add a business cycle.  Advertising is very cyclical, and has suffered in both print and on-line media during the recession.

Most markets will, indeed, bounce  back in the recovery, but some will bounce higher than they ever had been before (rising trends), while others will bounce back but never recover their  past peaks (declining trends).  The danger in O’Malley’s words (which I would guess he understands) is that the opportunistic buyer at the cyclical low had better pay a price that  reflects the long-term trend after the recovery is over.  I can easily envision newspaper investors being forever disappointed, even though they bought at a cyclical trough.   On the flip side, I can also envision investors passing up great opportunities because they see the recent cyclical downturn but confuse it for a long-term trend.  This is one of the reasons that it’s wise to bring in an economist, and ask for an analysis that includes both the long-term and the short.

Getting Oregonians Back to Work

Last session, through our investments in transportation, infrastructure, health care, and affordable housing we created and maintained thousands of family-wage jobs in all 36 counties. In the February session, we will continue to prioritize preserving existing jobs, creating new jobs, and giving unemployed Oregonians new opportunities to return to the workforce. Senate Democrats will do this by:

• Supporting unemployed Oregonians by providing emergency benefits for an estimated 18,600 workers so they can feed their families while continuing to look for work

• Providing oversight and accountability over the 2009 session jobs packages to make sure our investments are putting Oregonians back to work

• Eliminating unreasonable barriers to obtaining employment

Supporting Small Businesses

Small businesses are the economic backbone of our state. Thousands of general contractors, health care providers, and tradesmen and women will have work because of our initiatives to create jobs and protect small businesses from additional financial burdens during this recession. In February, we will continue to help Oregon employers rebuild their workforce and restore our vibrant economy by:

• Supporting community businesses by making it easier to access small business loan programs

• Removing barriers to small businesses’ ability to provide access to affordable health insurance

Accountable and Transparent Government

Just like families across Oregon, the Legislature must balance its checkbook and respond to changing needs. During February, Oregon Senate Democrats will continue to promote accountability and make sure that we are getting the greatest value out of every tax dollar while ensuring that state government is delivering services with maximum efficiency. Senate Democrats will accomplish this by:

• Modernizing state government to make it more responsive to Oregonians’ needs and increasing financial accountability by referring annual sessions to voters

• Providing enhanced oversight over state agency operations to ensure taxpayers are getting the greatest value for every dollar spent

With the Jan. 26, 2010, passage of Measure 67 in Oregon, taxes on corporations with sales in the state will increase retroactively to 2009. C corporations will pay a higher minimum tax and higher corporate income tax on income in excess of $250,000. Other business entities will pay an increased minimum tax regardless of profits.

This advisory provides a brief analysis of Measure 67’s implications and describes a strategy for tax reduction for businesses operating as C corporations.

New corporate minimum tax

C corporations filing Oregon income tax returns on Oregon source income were targeted for tax increases under Measure 67. Before passage of Measure 67, businesses operating as C corporations paid a minimum annual tax of $10 and a 6.6 percent income tax on profits. Measure 67 has increased the minimum annual tax to $150 regardless of profits.

Although all C corporations will experience this 15-fold increase in the minimum tax, those corporations with Oregon gross revenues in excess of $500,000 will be impacted most. For those corporations, Measure 67 increases the minimum tax rate of 0.1 percent. For example, a corporation with $500,000 of gross revenues will pay a minimum tax of $500, while a corporation with $10 million in gross revenues will pay $10,000 regardless of profits. The “minimum tax” can be as high as $100,000.

New permanent corporate income tax rates

An additional permanent tax increase applies to corporate profits. The current 6.6 percent income tax rate will apply to profits up to $250,000 then increase to 7.9 percent for net income in excess of $250,000 for tax years beginning on or after Jan. 1, 2009, and before Jan. 1, 2011. The top rate falls slightly to 7.6 percent for tax years beginning on or after Jan. 1, 2011, and before Jan. 1, 2013. For tax years beginning on or after Jan. 1, 2013, the 7.6 percent rate applies to corporate income in excess of $10 million.

Retroactive rates to 2009 business activity

Note that both of these increases apply to last year’s business activity! Businesses with high gross revenues and thin profit margins (e.g., grocery stores, nurseries and fuel companies), will experience a substantial increase in Oregon tax, since the tax applies on sales regardless of profit.

Tax reduction strategy

How can the owners of a C corporation who continue to conduct business in Oregon protect their business from these substantial tax increases? Many C corporations will qualify for S corporation tax status. An election can be filed with the Internal Revenue Service to convert to S status that will cap the Measure 67 minimum tax increase at $150 regardless of gross revenues. Corporations with calendar tax years beginning Jan. 1 can make the election retroactively to the first of this year by filing the form by March 15, 2010. While this won’t avoid the retroactive increase for 2009, it will begin to reduce tax liability immediately in 2010.

A C corporation may qualify to elect S status if it fits within the following requirements:

* The corporation is a domestic corporation with not more than 100 shareholders (members of a family can qualify as “one” shareholder)
* Have “qualified shareholders” (individuals but not nonresident aliens, estates for a short duration and certain trusts)
* Maintain one class of stock (voting and nonvoting stock is permitted)

Recommendation

Taxpayers who conduct business as a C corporation should consult with their tax advisors to consider additional factors, including but not limited to the following:

* Elimination of double tax (at both corporate and shareholder level)
* Existence of current unused loss carry backs or carry forwards
* Existence of built in gain (which may be lower in today’s economy)
* Individual taxpayer income tax rates (since individuals pay tax on S corporate earnings)
* Business owners’ succession planning and exit strategies

With the passage of Measure 67, S elections may be particularly attractive because an S corporation’s minimum tax rate is capped at $150, and corporate income escapes increased corporate income tax rates.
We recommend that C corporation owners consult with their lawyers and tax advisors to determine whether an S election would save substantial tax. Should you wish to consult with Davis Wright Tremaine LLP, please contact the authors of this advisory, John DiLorenzo or Pat Green at (503) 241-2300.

Disclaimer

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

Thursday, January 28, 2010

Whatever government revenue might be generated by the passage of Measures 66 and 67 in Oregon on Tuesday, make no mistake that one result is simple and straightforward. It has allowed those who make decisions with taxpayer dollars to skate. Rather then solving the problem of paying too much out to everything — including salaries and benefits to Oregon state workers — legislators simply asked for, and received, more.

We hope Washington state is not next, but we suspect that all states — including ours — are in the reaching-deeper-into-our-pockets mood instead of getting their expenses under control.

In the meantime, we put out the welcome mat here in Clark County for Oregonians who want some relief. Our community has always been a great place to do business; as of Tuesday, it just got better. More than any immediate or statistical impact (we noticed no long line of northbound trucks moving companies here Wednesday morning), the benefits to Southwest Washington will evolve slowly and will be related to overall business climate. Even several days before the vote, a Saturday story by The Columbian’s Libby Tucker included this quote from Bart Phillips, president of the Columbia River Economic Development Council in Vancouver: “(Tuesday’s election has) already had its impact whether or not it passes, just because the specter of it causes instability. It shows the legislature is willing to increase corporate taxes …”

What we’re talking about here is an overall message from voters and politicians to entrepreneurs, venture capitalists and small businesses: “We’re going to sock it to you good, and we’ve got the public employee unions’ voter base, plus the deep campaign-spending pockets of those same unions, to pull this off.” And then, legislators will not only skate on their responsibilities to rein in an extravagant system of public employee pay and benefits, they’ll skate on their duty to reform government overall.

Measure 67 does more than just increase the corporate minimum tax from $10 annually to a sliding scale starting at $150 for companies with less than $500,000 in sales, up to $100,000 for companies with $100 million or more in sales. It also enforces the ghastly provision of making the tax retroactive, extending back to Jan. 31, 2009. (CEO: “Oops! I guess last year wasn’t as profitable as I thought!) To which Clark County economic development officials respond: “C’mon over!”

As for Measure 66, it increases state income taxes for individuals making more than $125,000 per year or families making more than $250,000. If that sounds like a minor hit on the rich, be advised that most businesses are led by people making more than $125,000. Furthermore, many of those leaders live in Clark County, and they’re sick of having to pay state income tax in Oregon. Combine those dual insults, and it makes even more sense to move a business across the river.

Here’s one last offensive message that was imparted to Oregon businesses: “We’re even willing to launch this assault on companies during the worst business climate in seven decades.”

Again, no significant impact should be expected here in coming days. But long-term, as Phillips noted, “it becomes a more appealing factor for businesses already considering a move.”

Clark County’s economic environment has long been penalized by business elements in adjacent Oregon. Now it’s good to have a business boost here because of something that happened there.

If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.

1. A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.

2. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.

3. To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.

4. In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families.

5. The new law applies only to cash contributions.

6. Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.

7. You must itemize your deductions in order to claim these donations on your tax return.

8. You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.

9. Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development ( www.usaid.gov).

10. Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check or a receipt from the charity. Receipts should show the name of the charity, the date and amount of the contribution.

For more information see IRS Publication 526, Charitable Contributions and Publication 3833 , Disaster Relief: Providing Assistance through Charitable Organizations. To determine if an organization is a qualified charity visit IRS.gov, keyword “Search for Charities”. Note that some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov.

By Patrick Emerson

Gubernatorial candidate Bill Bradbury has come out with a proposal to create a “Bank of Oregon” where all state agencies would be required to deposit their funds. Then the bank would be required to invest only in in-state projects. It is an interesting idea, modeled on a similar bank in North Dakota that has been aroundn for 90 years.

The populism of the idea is clear, ‘boo, big multinational corporate banks!,’ but is it a good idea?

Well, it is hard to say. It seems to rest on the premise that worthy in-state ventures cannot get access to capital. This is not hard to believe is true to some extent at the moment, but putting aside a once-in-a-lifetime credit market collapse, is this an accurate premise in general? I am not convinced.

Which then would imply that the bank would end up being a lender that would undercut competitors essentially subsidizing Oregon businesses or lend to more risky ventures that might have a hard time accessing capital due to the risk factor (essentially a subsidy as well). Generally, this is where venture capital comes in for new or young ventures, so in some part, I suppose this bank would be filling in for a lack of or an unwillingness of venture capital to fund these projects. If this is the case, I am not sure it is the role of a quasi-governmental agency to play this role. It is easy to see how incentives can become distorted and bad risks are taken or underperforming loans are propped up by even more capital.

On the other side, the state may deposit money in out-of-state banks but the returns on those deposits come right back to the state. And if the state bank is going to underperform - which is almost certainly is be definition, undercutting or taking on more risk - then this will lower the returns on those deposits and essentially this becomes a taxpayer subsidy for business. And we could do that much more effectively through more direct measures.

So what this does, potentially, is create essentially a less efficient bank that will pay lower interest on the deposits of state agencies in order to either, one, offer lower-interests loans to Oregon projects that could get credit elsewhere, or two, fund more risky and/or less worthy projects and this would all lead to higher costs for Oregon taxpayers.

Now, it is possible that I don’t understand how much of a disadvantage are in-state projects and how they cannot access funds from regular in-state and out-of-state commercial banks. Anyone want to educate me?

Because at first blush, I just don’t see it.

PS, the North Dakota idea is 90 years old, from a time when credit for rural North Dakotan farmers was hard to access. The world has changed a lot since then.

Marketers have a fresh, new tracking tool to follow you online and it’s tougher to beat.  In the past, the best way to preserve online anonymity is to delete your cookies, the bits of computer code embedded in Web browsers that remember the sites you visit and is a pinpoint marketing tool for business. Each action you take online draws a sharper and more useful profile of you. In the past, this crumb trail is erased by simply going to a browser’s “Tools” menu and clicking “clear recent history” or “delete cookies”.  Meet the “Flash cookie.”  With “Flash cookie” this is no longer the case. It acts like a hard drive, storing data online and not on the browser, so it won’t be erased when consumers clear cookies.

The Federal Trade Commission isn’t amused. Chairman Jon Leibowitz is contemplating rules that would penalize companies that track consumers without consent or adequate transparency. His rationale: If people delete cookies, there’s a reason. Congress may also step in. Rep. Rick Boucher (D–Va.) is writing a bill requiring companies to notify users about online cookies and ad targeting.

Marketers argue there’s no need to worry. “The industry has provided many ways to opt out of tracking,” says Michael Zaneis of the Interactive Advertising Bureau. The IAB recently launched a public service campaign, featuring “advertising is creepy” ads that link to directions on clearing a browser.
The fight could end before it begins. Adobe, the world’s largest maker of design and content-sharing software, says 2010 editions of Flash will feature a “private browsing mode” to let consumers troll the Web without having their actions recorded.

To crush Flash cookies, the paranoid need not wait. Right-click (or control-click on a Mac) in any Flash application (such as a YouTube video) running in your browser. The “Advanced” button in the “Privacy” tab will take you to more information on how to change your settings and turn the cookies into crumbs.

Washington’s domestic partnership law, which went into effect on December 3, 2009, provides that for all purposes, registered domestic partners must be treated the same as married spouses, unless doing so would conflict with state law.  “Registered domestic partners” include same-sex domestic partners, and also opposite-sex domestic partners, provided one of them is at least 62 years old.

For employers, this means that employment-related benefits must be extended to the registered domestic partners of employees on the same basis as spouses — that is, unless the benefit is governed exclusively by federal law.  FMLA is one such law; ERISA is another.  This means that employers subject to FMLA and the corresponding state leave laws (the Washington Family Leave Act,  state pregnancy disability laws, and state military leave laws) cannot count against an employee’s annual FMLA entitlement any leave that is covered by state law but not FMLA. 

One such example is leave taken to care for a registered domestic partner or his/her family member with a serious health condition.  A complication resulting from that difference is that employers covered by the FLSA (federal wage and hour law) cannot make deductions for partial-day absences for leave that qualifies under state law but not under FMLA.

Another area of conflict between state and federal law exists with respect to group health plans.  To the extent group health plans are regulated under state insurance law, which is the case when the plan is funded by insurance, the benefits must be made available to the registered domestic partners of employees on the same terms as they are made available to employees’ spouses.  However, self-funded plans are governed exclusively by ERISA, under which there is no requirement to provide benefits to registered domestic partners.

In practice, administering benefits in light of these differences can be complicated.  Questions should be reviewed with employment counsel.

Some say that we have added no jobs in the past 10 years, and they are calling it a “lost decade.”  What they see is a product of bad data analysis.  Here’s the actual U.S. employment data, plotted in blue:

Actual data in blue.  The green line goes from December 1999 through December 2009, showing virtually no growth in a decade.  But it’s always to calculate changes from a peak to a trough if you want to understand long term trends.  The economy’s ability to generate jobs over a long period of time is better examined by looking at peak-to-peak growth, which is the purple line.

So, you can say that we ended the decade at the bottom of a business cycle, but everyone already knew that.  Or you can say that the economy grows jobs over the long run, but not during the down stage of a business cycle.  I think the latter statement is more useful.

Going forward, businesses should recognize the slower growth of the working age population that we’ll have in the 2010s.  Plenty of companies are planning on expansion, but won’t find the workers easily, unless they start thinking about this challenge ahead of time.  (A year before the recession, I wrote about 6 Steps to Hiring in a Tight Labor Market.  It’s useful to read even before the market tightens.)

<em>Bill Conerly is principal of <a href=”http://www.conerlyconsulting.com/index.php”>Conerly Consulting LLC</a>, chief economist of <a href=”http://www.abcinvesting.com/”>abcInvesting.com</a>, and was previously Senior Vice President at First Interstate Bank. Bill Conerly writes up-to-date comments on the economy on his blog called “<a href=”http://businomics.typepad.com/businomics_blog/”>Businomics</a>” and produces a monthly <a href=”http://www.businomics.com/index.php/audio-magazine”>audio magazine available on CD</a>.   Conerly is author of “<a href=”http://businomics.typepad.com/ “>Businomics</a>™: From the Headlines to Your Bottom Line: How to Profit in Any Economic Cycle”, which connects the dots between the economic news and business decisions.</em>

<a href=”http://oregonbizreport.oregonreport.com/wp-content/uploads/2008/07/bill-conerly-four.jpg”><img class=”alignnone size-medium wp-image-49 aligncenter” title=”bill-conerly-four” src=”http://oregonbizreport.oregonreport.com/wp-content/uploads/2008/07/bill-conerly-four-300×74.jpg” alt=”" width=”298″ height=”74″ /></a>

SALEM—If you’re in a hurry to file your tax return, the Oregon Department of Revenue asks you to hold on to it until after the January 26 special election.  “If people file before the special election, we’ll hold their returns until we know the election results. But we’d rather everyone wait to file,” said Theresa Schuh, personal income tax policy manager.  The agency doesn’t usually start processing tax returns until mid to late January, anyway, she said.

Even though tax return processing will start a few days later this year, most taxpayers who file electronically will get their refunds five to 10 days after their returns are processed.  “If you e-file your tax return on February 1, you could have your refund by February 8,” she said.

For more information on Oregon income taxes, tax forms and instructions, and to check the status of your refund, visit www.oregon.gov/DOR, or call 1-800-356-4222 toll-free from an Oregon prefix (English or Spanish); 503-378-4988 in Salem and outside Oregon; or e-mail. For TTY (hearing or speech impaired), call 1-800-886-7204. Because of the volume of calls the department receives during tax season, callers may experience extended waiting times.

He made what I like to call the Deadly Assumption(TM) – which is the belief that some work is so basic, fundamental, and obviously important that it need not be explained…which explained his shouting, “I shouldn’t have to explain this!”

Have you ever shouted or silently seethed, “I shouldn’t have to explain this!” when you found out someone forgot to call the customer back, miss measured a cook-top, or left a nasty haze on an edge detail?  If not, you probably don’t have employees.  If so, may I offer you a management practice that can be instrumental in transforming your small business experience from one of extreme frustration to control and freedom?

I call it the PROcess(TM), and when applied to the critical tasks that may be slipping through the cracks in your business, amazing results are possible.  It is a 3 step progression that can be summed up with the acronym in PROcess(TM), P.R.O. which stands for Position, Result, and Operation.

By Assigning the Position, Defining the Result, and Designing the Operation, an owner can ensure that the critical tasks that employees perform are done right and at the right time with much greater frequency.

Assigning the Position is removing all doubt as to who in the company is formally responsible for performing a particular task.  In a business that is growing, and in businesses that are compressing their operations in a declining market, work assignments can be haphazardly doled out, resulting in a lack of clarity as to who is responsible for what.  For example, both the bookkeeper and a sales person could conceivably be responsible for calling on overdue accounts.  But what if they both believe the other is doing it?  The task falls through the cracks, payment gets delayed, and cash flow gets tight.  By firmly and formally assigning that task to one of them, the likelihood that the task will be overlooked is diminished.

Defining the Result is explicitly detailing what the task in question is intended to produce.  Anyone can run a bridge saw and “cut” a slab into counters.  Whether the counters are cut according to the templates within acceptable tolerances and on time is another matter.  To ensure that the counters are cut and ready to polish in time to meet the deadline, and fit at the install, requires that a deadline and measurable tolerances be provided for the sawyer to follow.

Designing the Operation is like the directions to a destination or the recipe for a cake.  Who can drive to a destination they’ve never visited if they haven’t written down the directions?  Who can bake a cake without constantly referring to the recipe?  Very few people.  And very few employees, no matter how diligent, hard working, and dependable can assume a new task and perform it with great consistency without written instructions.  To ensure that the result is achieved, step by step procedures must be written down, provided, and most importantly, followed.

Fabricating and installing granite slab counters is a lot like washing and waxing luxury automobiles…the clients are prosperous, the finished product expensive, and the expectations for performance extreme.  The next time you find yourself shouting, “I shouldn’t have to explain this!” or “This goes without saying!” take a deep breath and make sure you haven’t made the Deadly Assumption (TM).  Then apply the PROcess(TM).  By doing so you’ll have a lot less frustration and your customers will find far fewer French Fries on the floor!

– In 1998, Aaron Crowley founded his first company, Crowley’s Granite Concepts, and has grown it to what is today, one the most well respected and recognized stone fabrication companies in Oregon .  Aaron Crowley is author of a new book called Less Chaos, More Cash. View Less Chaos, More Cash here

Oregon Representative Peter DeFazio and others in Congress are pushing a new concept that would fund spending programs by taxing securities and derivative transactions.  Supporters argue that H.R. 4191, Let Wall Street Pay for the Restoration of Main Street Act of 2009, which would implement a 0.25% transactions tax, will raise revenue without impacting the average investor.  The concept is that the tax is needed to ensure that Wall Street pays for their share of the needed investments.  Opposition states that the bill has many underlying problems and loopholes which would lead to an even worse economic decline.

Below are the pros and cons of the transaction tax

Supporters:
• Increase revenue to fund spending programs.  Tax would raise as much as $150 billion per year.
• The tax has a negligible impact on the average investor.
• The tax will ensure Wall Street pay for needed investment.
• The tax as a means to eliminate high-volume short-term speculative trading.
• The tax would likely put high frequency traders out of business.
• A transactions tax would reduce the inexperienced trading and would also reduce the trading of those whose trades are necessary to make prices reflect economic reality.

Opposition
• There are enough loopholes that the tax will raise little money.
• The tax will drive down job and tax revenues overseas while inflating the balance sheets of banks.
• The tax will massively raise the costs of trading.
• The transaction tax is a tax on investors, not bankers.
• Main Street will see lower pension fund values, both in their own retirement savings and in the public employee pension plans they will now have to top off with new taxes on their homes and incomes.
• There aren’t enough exemptions and investors react by sharply reducing trading activity, so there is little revenue, but great harm to the market and the economy.