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Minimum wage tax credit proposal on hold

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Agriculture asks lawmakers to spend more time on proposal to make sure it benefits the industry.


PARIS ACHEN - Rep. Brian Clem, D-SalemA legislative proposal to offset the cost of minimum wage increases to small businesses, farmers and other natural resources employers appears to be on hold until at least 2017.

Reps. Brian Clem, D-Salem, and John Davis, R-Wilsonville, had proposed giving tax credits to certain employers who are most likely to struggle financially to meet the requirements of a new three-tier minimum wage plan. The plan was laid out in Senate Bill 1532, which passed both legislative chambers earlier this month.

During negotiations with legislative leadership, the plan was whittled down to tax credits of no more than $15 million a year only for employers involved in animal production, aquaculture, crop production, fishing, hunting, trapping and food manufacturing.

That amount was insufficient to cover the additional costs of all of those employers, so lawmakers would have had to find a way to prioritize how to divvy out the tax credits, Clem said.

A group of associations representing agriculture has indicated it wants lawmakers to take more time to figure out those details, rather than push through legislation this session, which is scheduled to end by Sunday.

“The reality is that more time is needed to fully run cost and benefit scenarios to ensure any wage relief actually benefits the agriculture industry as a whole,” representatives from the agriculture industry wrote in a letter to Clem. “We believe there may only be one shot at alleviating the burden S.B. 1532 imposes on agriculture. The solution must meet the needs of our member families without picking winners and losers among the industry.”

The letter was signed by the Oregon Farm Bureau, Oregon Dairy Farmers Association, Oregon Association of Nurseries, Northwest Food Processors Association, Oregon Cattlemen’s Association, Oregon Blueberry Commission, Oregon Seed Council, Columbia Gorge Fruit Growers Association, Far West Agribusiness Association and Oregon Wheat Growers League.

PARIS ACHEN - Rep. John Davis, R-Wilsonville“I’m extremely disappointed that our bipartisan effort to try relieve some of the sign burden imposed by the minimum wage bill has been reduced so far,” Davis said. “Part of why there is so little interest in the current proposal is it’s just so small. If we were going to try to cover part or all of increase each year to all businesses, it is hundreds of millions and possibly billions of dollars. This is really a defacto tax we were trying to impose.”

Clem, who voted for the minimum wage bill, said he was concerned that small employers would have to lay off workers due to the cost of the increased minimum wage while larger employers would easily be able to absorb the cost.

The tax credit would have reduced the effective wage rate for those employers. The amount would gradually climb in tandem with the minimum wage, reaching up to $2 per hour per employee in July 2022.

Clem and Davis said their original concept also would have set smaller increases in minimum wage and lifted a ban against setting higher wages in Portland. It became clear early on in negotiations that both of those proposals were too complex to push through the waning days of the Legislature’s 35-day session, Clem said.

The minimum wage plan hikes minimum wages over a period of six years. The amount differs in each of three regions and is set according to a county’s median income and cost of living. In Portland, minimum wage will reach $14.75 in the Portland area, $12.50 in rural and coastal counties with struggling economies and $13.50 in the rest of the state by 2022.

Clem said he plans to pursue the wage support proposal in 2017.

“I think it’s fair to say the independent-minded Democrats are satisfied that if Ag thinks we can wait then we can wait to get it right,” Clem said.


By Paris Achen
Portland Tribune Capital Bureau Reporter
503-385-4899
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