Oregon’s Romance with Small & Minority Businesses: The Status is Complicated

If there’s anything that binds Senate Majority Leader Rob Wagner and his Republican counterpart Senate Minority Leader Knopp together, it’s their consensus that Oregon ought to do more for businesses, especially small and minority businesses.

The conundrum in the legislative puzzle is how to achieve the greatest business development victory for everyone. Past efforts haven’t significantly changed the terrain. Some proposals came cloaked in mindless political postulations and sham appeals to greed.

In the midst of COVID-19, the state launched the “Future Ready Oregon 2022” initiative, pouring $200 million into training and resources to help prepare Oregon’s workforce. The focus was to enhance business prospects and mitigate COVID impacts on historically underserved communities including people of color, women, low-income individuals, and, with a slapdash approach, rural residents.

For this, the state tasked the Oregon Minority Business Development Agency to provide technical assistance, consulting, training, and resources to support established minority-owned businesses in the state, particularly in the construction, food, and tourism industries. Some businesses received free business coaching, access to networking events, and funding for minority-owned businesses.

Despite these efforts, not much has changed. Most minority and small businesses lament over weak outreach and lack of compliance mechanisms. Conditions are worse in rural areas. Some businesses have had to close down. The total number of minority businesses has shrunk in the past years. Compared to national business growth, only 11% of Oregon firms are minority-owned, compared to 18% nationally. With the right prescriptions, this suggests there is room for growth in minority business development in the state.

Studies show that household income is lowest for others. Persistent economic disparities create barriers for minority entrepreneurs and access to government contracting.

Investments through initiatives like “Future Ready Oregon 2022,” though plausible, are sadly often burdened by bureaucratic and consistent bottlenecks, leading to decreased community participation. There is a need to demand greater accountability and outcomes in the absence of strong compliance mechanisms.

However, hope is not lost due to the tenacity of our current leaders. Oregon appears to be taking meaningful steps and making good faith efforts to support minority business growth and development, but challenges still loom, and bureaucratic orthodoxy stands in the way of progress.

Moreover, state leaders need to be upfront about the depth and level of disparities that still need to be addressed to fully realize the potential of minority-owned businesses in the state. Continued investments in these systems without a clear scope will lead to government waste. Currently, there is very little investment in effective community outreach to minority and small businesses and rural areas, judging from several state agencies’ budget proposals. Driving more equitable economic opportunities requires a broader understanding of the impediments. Sometimes, government is the albatross.

Legislative Small Businesses Scores and Misses: Roundup

There are some legislative business proposals that would have impacted small business that failed to advance during the short session.

SB 1542 – $5 Million CAT Exemption. This bill would have raised the Corporate Activity Tax (CAT) exemption from $1 million to $5 million, as the $1 million threshold continues to impact small businesses due to the complex effects of the gross receipts tax.

Also, SB 1573 – Contractor Wage Claim Liability was the first casualty of the 2024 session. The bill would have unjustly penalized general construction contractors by holding them liable for the unpaid wages of their subcontractors.

There were legislative proposals that won bipartisan support. Campaign Finance Reform is one of those bills. The legislature, through a bipartisan coalition, passed a campaign finance reform bill that will limit contributions to statewide candidates to $3,300 per election cycle and to political party/legislative caucus committees to $30,000. These limits will go into effect starting in 2027 and will impact how campaigns in Oregon are funded.

Several proposals to address wildfire funding issues, such as reducing landowner wildfire fees and finding new funding sources, failed to pass the legislature.

The legislature also passed SB 1520, which would ensure wildfire survivors do not need to pay state income tax on compensation and settlements from losses. This is a fair deal.