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Transportation Funding Proposal Difficult to Take Seriously

Oregon needs a well-functioning transportation system to move people and goods. To pay for that system responsibly, policymakers must collect revenue judiciously and ensure that it’s spent efficiently. They also must recognize the context in which they propose to raise and spend taxpayers’ hard-earned money.

By these standards, it’s difficult to take the April 3 transportation-funding proposal seriously.

Consider the context first. Oregonians are worried about rising costs for basics like energy, housing and food. They’re also worried about the impact of tariffs on the price of cars and other household items. Yet among its nearly one dozen proposed fees and taxes, the transportation package contains:

  • A 50% increase in Oregon’s 40-cent gas tax, phased in by 2032. This tax will then continue to increase every year without a vote of the Legislature. As of January 2025, only two states had gas taxes at or above 60 cents: California and Illinois.
  • A 1% sales tax on all cars sold in Oregon, new and used.
  • A 60% increase (0.5% to 0.8%) in the “privilege” tax paid by auto dealers on new car sales, which is passed along to buyers.
  • A $90 increase to vehicle titling fees, nearly doubling fees for most passenger cars and trucks.
  • An 80% increase in the tax that all workers in Oregon pay on their wages. This tax, which will go from 0.1% to 0.18%, is used for public transit, regardless of whether transit options are available to those workers.
  • A brand, new 3% sales tax on tires. Just weeks ago, a similar proposal (HB 3362) met overwhelming opposition from Oregonians.

At nearly $2 billion in proposed new revenue over nearly a dozen new or increased taxes and fees, the scope of lawmakers’ initial transportation proposal is audacious, particularly when the framework contains no significant new infrastructure projects to expand capacity.

The mix of proposed taxes is only part of the problem. What isn’t clear from the proposed framework is what lawmakers or agency officials intend to do with respect to accountability. There is a trust deficit right now that applies both to government efficiency more broadly and with the Oregon Department of Transportation and transportation projects specifically. Consider:

  • In February, as reported by the Oregon Journalism Project, ODOT admitted to making a $1 billion error in its 2023-25 budget. ODOT, the OJP writes, “had failed to perform a basic accounting function: reconciling actual revenues to the projected revenues from its budget.” That error has left a hole that lawmakers are looking to Oregonians to fill.
  • ODOT hasn’t come close to completing the projects included in the $5.3 billion transportation package the Legislature approved in 2017, the Salem Statesman Journal has reported. And the actual costs of most projects far exceed ODOT’s estimates. In fact, some of the newly proposed funding is actually needed to complete those projects adopted eight years ago. (For context: The Francis Scott Key Bridge damaged in March 2024 when struck by a ship is well on its way to a complete rebuild in just over four years.)

Again, Oregon needs a well-functioning transportation system to move people and goods. But that system needs to be built – and maintained – with transparency, fairness, a focus on highest need, increased road capacity, and economic sustainability in mind. As this proposal gets consideration in the legislative process, we hope lawmakers will keep those factors in mind and attach serious accountability measures.

Trump Administration Announces Sweeping Tariffs

Tariffs announced: On April 2, President Trump announced sweeping tariffs on U.S. imports. The tariff regime includes a 10% tariff on all foreign imports as well as larger tariffs on selected nations. China, for example, faces a 34% tariff in addition to tariffs totaling 20% applied since February. The European Union faces a 20% tariff. Trump also announced a 25% tariff on car imports, which has since gone into effect. The baseline tariff went into effect April 5, and the targeted “reciprocal” tariffs will go into effect April 9. Read a White House statement on the tariffs here.

Why it matters: Import tariffs will affect the cost of goods used by Oregonians and by Oregon businesses. And as an export-dependent state, Oregon likely will be affected disproportionately by retaliatory tariffs adopted by other countries.

What others are saying: The U.S. Chamber of Commerce argues that the “best pro-growth response to foreign trade barriers is to negotiate enforceable trade agreements to eliminate tariffs and other trade barriers.” National Association of Manufacturers President and CEO Jay Timmons said on April 2, “The high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.” National Retail Federation Executive Vice President of Government Relations David French said on April 2, “Tariffs are a tax paid by the U.S. importer that will be passed along to the end consumer.” (OBI is Oregon’s affiliate for all three of these national associations.)

Learn more: The BBC details the tariffs here. The Associated Press answers common questions about the tariffs here. A story in The Oregonian here describes the effect of the tariffs on Oregon businesses. Register for the Oregon Trade Summit (below), which will feature very timely presentations, including an assessment of the federal landscape by Isabelle Icso, senior director of international policy with the U.S. Chamber of Commerce.

April 22 Webinar: Recycling Modernization Act Overview

Join experts from the Circular Action Alliance on April 22 for a webinar on Oregon’s Plastic Pollution and Recycling Modernization Act. The law uses an extended producer responsibility model that requires packaging producers to fund related recycling efforts. Producers were required to join a producer responsibility organization (PRO) by March 31, and Oregon’s program is scheduled to launch July 1.

More about Oregon’s program: The Legislature passed the Plastic Pollution and Recycling Modernization Act (SB 582) in 2021. Producers of covered products (packaging, paper and food servicewear) must register with an approved producer responsibility organization, report data on their supply of covered products and pay membership fees. The PRO helps fund curbside recycling conducted by local governments as well as system improvements.

Oregon’s PRO: The Circular Action Alliance is the only PRO with an approved program plan in Oregon. The Oregon Department of Environmental Quality approved CAA’s plan on Feb. 21, 2025.

Webinar details: The webinar, which will run from 10 – 11 a.m., will include an overview of Oregon’s program, an implementation update and, of course, plenty of time for questions. Register here.

Learn more: OBI has added a Recycling Modernization Act Resources page to its website here. The page contains basic information about the program and links to helpful sites. It also will be updated as important developments occur.

Fifteen Students to Compete in Eugene Civics Bee April 17

Fifteen middle-schoolers have been chosen to participate in the Eugene Civics Bee, one of two local bees that will select participants in the state-level Oregon Civics Bee, which will take place in Salem this spring.

The Oregon Civics Bee is organized by Oregon Business and Industry in partnership with the U.S. Chamber of Commerce Foundation. Beginning in late 2024, 6th, 7th and 8th graders from across the state entered the competition by submitting essays explaining how they would use civics principles to address problems they identified in their communities. The writers of the best essays, as determined by a panel of judges, were invited to participate in the two regional bees.

Five students will advance to the Oregon Civics Bee from the Eugene Civics Bee, which will take place on April 17 at 2 p.m. at the University of Oregon’s Ford Alumni Center. They will join the top five middle-schoolers from the Tigard Civics Bee, which took place March 8.

The Oregon Civics Bee will take place on May 28 at 2 p.m. at Willamette University. Oregon Secretary of State Tobias Read will moderate, as he did at the inaugural Oregon Civics Bee in 2024, won by Thomas Morgan of Keizer.

Go here to learn more about the Oregon Civics Bee.

Register for April 28 Oregon Trade Summit

On April 28, join OBI for the Oregon Trade Summit, an event focused on trade, tariffs and Oregon’s economy.

Oregon Trade Summit presentations:

The summit will take place at the Salem Convention Center. Doors will open at 1:30 p.m., and the program will run from 2-4:30 p.m.

A networking reception will follow.

Go here to register.

OBI Op-Ed: Gov. Must Prioritize Economic Development

In an op-ed published April 2 by The Oregonian, OBI President and CEO Angela Wilhelms urged Gov. Tina Kotek to add economic development to her existing list of priorities, which includes housing, education and behavioral health.

“Private sector activity, after all, generates jobs, economic activity, philanthropy and the revenue that supports public services – including those the governor has prioritized,” Wilhelms wrote. “Yet Oregon’s business environment has suffered years of neglect, and the consequences have begun to show.”

Wilhelms noted Oregon’s declining status in national competitiveness rankings, its slow rate of job creation and a recently released report in which Business Oregon, the state’s economic development agency, warned about the ease with which other states have recruited Oregon businesses.

NIC Industries CEO Nominated for EY Entrepreneur Award

What happened: Brian Hall, CEO of OBI member NIC Industries, has been nominated for the Ernst & Young Entrepreneur of the Year Award in the Mountain West region. The award honors visionary business leaders driving innovation, growth and purpose. The Mountain West region includes Oregon, Washington, Utah, Idaho, Wyoming, Montana, Colorado and Alaska.

About NIC: Based in White City, NIC Industries is a global leader in performance coatings. It is widely known for its innovation in ceramic-based technologies and advanced application systems. The company maintains a network of over 4,000 certified applicators across the globe and has secured national partnerships with Walmart and Amazon. Check out OBI’s 2024 profile to learn more about NIC Industries.

What’s next: A panel of judges will interview finalists in May, and regional awards will be announced in June.

Register for Unemployment Insurance System Webinar

Join experts from the Oregon Employment Department April 23 to learn about the state’s unemployment insurance system. The webinar will cover the following topics and include plenty of time for questions:

  • Overview of Oregon’s unemployment insurance system
  • How rates are set
  • How to respond to an unemployment claim using the Oregon Employment Department’s Frances system.

The webinar will run from 11:30 a.m. to 12:30 p.m. Go here to register.

Legislative and Rulemaking Updates

April 9 Deadline: April 9 is an important deadline for the session. This is the date by which bills need to be passed by a committee in their chamber of origin. Some committees are exempt from this (budget, rules, revenue, transportation and other joint committees). But most committees need to vote to advance a bill to the floor or to one of these exempt committees. OBI will be watching closely to see what additional legislation might be dead or alive for the second half of the session.

Clean Energy Bill: OBI has been closely watching SB 1102, an energy study placeholder bill, since the broad relating clause (“relating to energy”) could allow almost any type of energy-related amendment. Less than four hours before an April 2 hearing, the -2 amendment, proposed by Sen. Anthony Broadman, D-Bend, was posted. This amendment makes significant changes to the 100% clean energy bill (HB 2021) passed in the 2021 session. The bill applies only to investor-owned electricity utilities (IOUs), and the amendment was drafted without any consultation with IOUs. The bill moves the goal posts for IOUs and makes changes to regulations either set by the Public Utilities Commission or currently in process. HB 2021 was a heavily negotiated bill that involved all stakeholders and former Gov. Brown. The magnitude of the proposed changes, coupled with a lack of consultation and last-minute posting, stands out as one of the worst examples of bad process in the 2025 session. OBI will testify against the bill and amendment and is working closely with the IOUs and affected business stakeholders.

Employment Medley: In the employment realm, SB 1108, SB 1119 and SB 1148 all received their first hearings just days before the April 9 deadline. SB 1108 proposed to create yet another leave law, which would allow employees to take up to four hours of paid leave to donate blood. OBI negotiated amendments to make blood donation another leave purpose under the Oregon sick time law. SB 1119, as initially proposed, would make it an unlawful practice for an employer to threaten to report an employee to immigration officials “because an employee has exercised a right otherwise provided by law.” OBI again negotiated this to narrow the applicability to employees engaging in whistleblowing activity – something that is covered by current law. Finally, amendments were proposed to SB 1148 which would have given employees the right to use employer-provided short-term disability insurance leave before using paid family leave. If enacted, that bill would most likely result in employers terminating those plans, which doesn’t benefit anyone. Fortunately, the bill has been amended to clarify how such plans work with paid leave.

FISH and CHIPs: HB 2277 is a placeholder bill “relating to the semiconductor industry” targeted by Rep. Daniel Nguyen, D-Lake Oswego, for amendments to extend Oregon’s CHIPs Act investments without the requirement that firms and related projects have a commitment of federal CHIPs funds. This is likely to move out of committee this week. OBI testified in favor of removing this federal funding requirement. Initial amendments maintained the entire $40 million investment fund for semiconductors, but new amendments scale this down to $15 million. The remaining $25 million would be moved to a new program via amendments to HB 2322 (another placeholder) called Oregon Fostering Innovation and Strength at Home (FISH) to create the Oregon FISH and CHIPs fund. Names aside, the FISH fund would make all of Oregon’s targeted industries eligible for funding, something OBI has advocated for since the beginning. The bill specifies that “targeted industry” includes but is not limited to metals and machinery, business services, food and beverages, forestry and wood products, high technology, outdoor gear and apparel and bioscience. OBI welcomes the recognition of the need to support all Oregon industries rather than picking winners and losers. That said, it is disappointing that rather than adding resources to economic development, this expansion is done within existing funds from the 2023 CHIPs allocation.

Estate Tax Reform: On April 3, the House Committee on Revenue held a public hearing on HB 3934, which would allow a surviving spouse to claim the unused exemption of a deceased spouse, or, in other words, make Oregon’s estate tax exemption “portable” to a surviving spouse. This change would bring Oregon in line with the federal government and other states that levy estate taxes like Maryland and Hawaii. It also would functionally increase the estate tax threshold for married Oregonians to $2 million, which would help bring Oregon’s worst-in-the-nation threshold more in line with the estate tax imposed by Washington, at least for some. Based on the strong bipartisan coalition of legislators sponsoring the bill, HB 3934 likely serves as the most viable estate tax change in a Legislature increasingly dominated by people who seemingly believe no good could ever come from lowering taxes. With a new study from CSI showing the impact even small changes can have on estate tax returns or, alternatively, the decline in returns filed in a state, even the modest change proposed by HB 3934 cannot be implemented fast enough.

Climate Superfund: Although SB 682, a retroactive strict liability bill for climate damages, is dead, the Senate Committee on Energy and Environment will consider SB 1187, a very similar bill this week. The bill targets businesses engaged in extracting and refining fossil fuel, so it appears to affect a limited number of businesses. However, given the dozens of climate regulations implemented in recent years, it would have a staggering impact on those businesses and would certainly drive fuel costs higher at a time when affordability is a major issue for Oregon businesses and individuals. OBI will testify in opposition.

Fee Transparency Bills: The handling of two so-called fee transparency bills is great illustrations of how chaotic this session has been. SB 430 and HB 3533 regulate the same conduct (fee transparency) through largely the same mechanism (Oregon’s Unlawful Trade Practices Act) but with different language. Legislators have not picked a single vehicle for the concept, so both bills are likely to advance, leading to potential conflicts and confusion. HB 3533 has moved out of the House Committee on Commerce and Consumer Protection to the floor, and SB 430 is almost certain to be voted out of the Senate Committee on Labor and Business. OBI and other industry stakeholders have worked to develop a compromise amendment to each bill that would align the restrictions proposed by the bills with those found in other states while accounting for unique aspects of Oregon law that compel differences.

EV Parking Requirements: HB 2961, which originally required EV charging in 50% of parking spaces in new commercial and residential projects with at least five units, has an unclear future. The sponsor, Rep. Mark Gamba, D-Milwaukie, has introduced a -7 amendment to mitigate opposition. The amendment still leaves an expansive and unnecessary mandate. The latest amendment applies the bill only within the tri-county Portland metro area. It also increases the residential unit threshold from five units to 10. OBI will remain opposed to the bill, which unnecessarily increases costs. The availability of EV charging should be dictated by market demand.

Crematory Regulation Win: On April 3, OBI testified in support of HB 3729, which would reduce the mandatory incineration temperature for crematories from 1,800 degrees Fahrenheit to 1,600 degrees. The industry has long argued that 1,600 degrees should be the standard in Oregon, as it is in 49 other states. Reducing the mandatory temperature would reduce natural gas use by 22%. Though DEQ could reduce the temperature without legislative guidance, the agency has not done so, citing other priorities and staffing issues. The bill was introduced to push the agency to prioritize the issue.

Secretary of State Releases Small Business Report

Business report: On April 1, the Oregon Office of Small Business Assistance – part of the Secretary of State’s Office – released its annual State of Small Business Report.

What’s notable: The report highlights the fact that state agencies fail to share information with affected businesses in a coordinated fashion, particularly when it comes to new programs. Operators of small businesses know this, of course. In a 2023 survey, 74% of respondents said that regulations change so frequently that it’s hard to keep up with what they’re supposed to do.

Why it matters: Oregon’s difficult regulatory environment discourages business investment in the state, which in turn limits job opportunities, innovation and revenue for government services. This climate is among the leading “push” factors cited in a recently released study of successful efforts by other states to recruit Oregon businesses. Improving Oregon’s regulatory climate is also at the heart of OBI’s Oregon Competitiveness Agenda, which you can read here.

Notable News

Portland Tax Hike: Three city councilors are mulling a proposal to increase Portland’s controversial climate tax on large retailers, in hopes of using the additional revenue to plug the city’s looming budget hole of around $60 million. Councilors Steve Novick, Angelita Morillo and Jamie Dunphy are behind the plan (Willamette Week).

Tillamook Lawsuit: The Oregon Supreme Court on April 3 unanimously reversed a lower court decision to dismiss part of a deceptive marketing lawsuit against Tillamook County Creamery Association originally filed in 2019. The high court, which heard oral arguments more than a year ago, sent the case back to the Court of Appeals for further proceedings (Portland Business Journal).

Intel and TSMC: Taiwan Semiconductor Manufacturing Co. has a tentative deal to form a joint venture to operate Intel’s factories, according to a report April 3 in the online tech site The Information (The Oregonian).

An Aging Oregon: Oregon’s aging population has big implications for the future of the state’s economy, which needs young workers to fill jobs and run businesses. An older populace will also have important consequences for state revenues (The Oregonian).

Venture Portland: While springtime for most Portlanders means cherry blossoms and the first hints of sunshine, for interest groups funded by the city, it’s panic time as the City Council prepares to slash its way out of a $90 million budget hole. One group sounding the alarm is the nonprofit Venture Portland, which for almost 40 years has provided small grants, training and assistance to business districts (Willamette Week).

Housing Goals: Gov. Tina Kotek has repeatedly said since taking office in 2023 that creating more housing is her top priority. But with no objection from the governor, the Bureau of Labor and Industries has been interpreting Oregon’s prevailing wage rules law so broadly that developers are forced to pay above-market wages to build affordable housing for the most needy Oregonians (Oregon Journalism Project).

Clean Trucks Rule: Environmental regulators are proposing rules that would offer truck manufacturers a pathway to meet Oregon’s medium- to heavy-duty zero emissions trucks guidelines — even if they don’t sell an electric truck. Officials say this would give the trucking industry time to develop more zero emission heavy duty vehicles while still following Oregon Gov. Tina Kotek’s request to keep the rules (Oregon Public Broadcasting).

Check Out OBI’s Member Benefits

OBI offers members a range of programs that can save money or help small businesses offer benefits normally available only to much larger companies. Benefit programs include:

  • HealthChoice: Helps businesses with fewer than 100 employees offer comprehensive health-care benefits through our partnership with Regence BlueCross BlueShield of Oregon.
  • CompSAFE: Helps eligible companies enjoy workers’ compensation discounts through SAIF Corporation.
  • Fuel Program: Helps members save fuel costs through our partnership with Ed Staub & Sons.
  • ODP Business Solutions: Helps OBI members save money on office furniture, supplies and other services.
  • LegalPLUS: OBI members receive 15 minutes of free legal consulting per month from Innova Legal Advisors.

Go here to learn about all of OBI’s member benefits.