Legislative Leaders Overreach with Transportation Package
What happened: On June 9, with less than three weeks remaining in the 2025 session, legislative leaders finally released a transportation funding package, the 102-page HB 2025.
The proposal includes nearly a dozen new or increased taxes and fees, from a 37.5% increase in the gas tax to a tripling of the employee payroll tax used to fund public transit. While legislative leadership did not have an estimate when the bill dropped, they indicated that they expected it to amount to about $1 billion in revenue and spending per year. However, as reported by The Oregonian, a draft report issued by the Legislative Revenue Office shows that figure at $1 billion per year by 2028 and $2 billion per year in 2033. The report is not yet posted to the bill’s informational page.
Far from “basic”: Oregonians were told they’d see a “back to basics” transportation package this year, OBI noted in testimony submitted June 11. Yet HB 2025 would fund proposals that far exceed the basics, including new programs and initiatives. A “back to basics” package, OBI argued, would include the completion of projects promised in 2017 as well as modest spending to ensure that ODOT can maintain basic services. OBI would support a funding package that delivered on past promises, included accountability measures and legislative safeguards, and spent responsibly on core services.
Some of the problems: OBI’s testimony noted several problems with the bill, including the lack of legislative safeguards for gas tax increases; the lack of sunsets or reauthorization requirements; and the tripling of a payroll tax paid by all working Oregonians for public transportation used by a relative few – who often aren’t charged for their use.
More modest proposal: OBI urged legislators to pare back the package, focus on genuine basics and give ODOT a chance to prove that it can manage significant projects on time and within budget.
Dutch Bros Moves HQ to Arizona
What happened: The news that Dutch Bros would move its headquarters from Grants Pass to the Phoenix area reverberated around the state last week. Dutch Bros is a Grants Pass-founded coffee chain with operations in 15 states and a growth-focused trajectory. This news came about a year and a half after the company announced an expansion into the Phoenix area, including the investment to move 40% of its then-current support operations staff.
Why it matters: Not only is Oregon losing an iconic brand, it’s losing (or already lost) good headquarters jobs. There are many reasons for companies to expand or move, as reported in a Business Oregon study done by the University of Oregon. But the reasons don’t mitigate the impact on local communities and economies.
State side-by-side: Here are just a few statistics comparing Oregon and Arizona that may be of interest in the wake of this story.
- Increase in real GDP 2024: Oregon 1.22% / Arizona 5.63%
- CNBC’s 2024 Top States for Business Rank: Oregon 28 / Arizona 12
- CNBC’s 2024 business-friendliness rank: Oregon 48 / Arizona 26
- 2025 Chief Executive Best and Worst States for Business Rank: Oregon 44 / Arizona 10
Legislative and Rulemaking Updates
Unemployment for strikers: It was a wild week of ups and downs with SB 916, which will allow striking workers to collect unemployment benefits. The key takeaway is that after a lot of work, OBI and partner groups were able to get some changes to SB 916, but the Legislature ultimately did pass it. It will now head to the governor’s desk. The previous versions of the bill would have allowed striking workers to collect unemployment benefits for up to six months. The final version limits those benefits to 10 weeks with a provision further limiting them to eight weeks if unemployment is at recession levels. When it became clear that the bill was going to pass the House (which was the 26-week version with that recession caveat), the team returned its attention to the Senate. Because the House amended the bill, the Senate needed to concur with those amendments. The team encouraged senators to deny concurrence, forcing the bill into a conference committee to work out differences between the chambers. The goal was to draw those weeks down to something much closer to the six-week payment cap Washington passed. On June 10, the effort to deny concurrence was successful. Four Democrats joined Republicans in voting “no.” The four included two who voted “no” on the bill originally (Sen. Janeen Sollman and Sen. Jeff Golden), one who was a “yes” on the original bill but subsequently agreed that a shorter number of weeks was appropriate (Sen. Mark Meek), and one who was new to the Senate since SB 916’s original vote (Sen. Courtney Neron Misslin), appointed to replace Sen. Aaron Woods. You can read more about this in this editorial from The Oregonian. While OBI hoped to reduce the 26-week payment period to a maximum of six weeks, the conference committee amended the bill to a maximum of 10 weeks. OBI has not changed its position: This is horrible public policy and another example of poor stewardship of public funds. But it is important to recognize the significant improvement in the final days of the bill’s action. OBI will be very active in the implementation process at the Employment Department.
Air quality program: Back on May 29, the House Committee on Climate, Energy and Environment heard concerns about implementation of air quality regulatory programs and a chronic backlog of permits that has existed for more than 20 years. OBI expects to see a budget note funding an outside consultant to examine DEQ’s permitting structure, process and impediments to timely permit issuance. For several weeks, OBI has worked closely with that House committee as well as the Joint Ways and Means subcommittee to highlight ongoing permitting challenges and seek solutions to major delays. According to OBI’s analysis, DEQ’s air permitting program charges the highest fees of any jurisdiction in the west and remains plagued by inefficiency, delay and uncertainty.
Prevailing wage expansion: HB 2688 would require prevailing wage for items that are manufactured for projects subject to the prevailing wage. With minimal discussion, the bill was advanced from the House Committee on Labor and Workplace Standards to the Joint Committee on Ways and Means in April. If the bill advances, it will increase the already high cost of construction. The bill also would increase workloads significantly for BOLI while driving up the cost of public projects. Nevertheless, a comprehensive fiscal impact analysis has not yet been published.
Transient lodging tax: On June 12, the House Committee on Revenue moved HB 3962 on a party-line vote. It now heads to the House floor. As amended, HB 3962 would generally reduce the share of local transit lodging tax (TLT) revenue dedicated to tourism promotion and tourism-related facilities from 70% to 40%. While other amendments to the bill would have completely depleted the funds earmarked for tourism development, OBI remains opposed to even this more tempered change because it would reduce funding for one of the state’s last dedicated funds for economic development. Further, it betrays a longstanding agreement between the state and hospitality industry. The TLT has long spurred substantial economic growth throughout the state and helped drive year-round employment and industry growth in some of Oregon’s most rural and tourism dependent communities. OBI and other industry groups will continue to oppose the bill in the Senate.
Security regulations: On June 13, SB 300 passed out of the Joint Committee on Ways and Means, putting it in a good position to pass this session. The measure is OBI’s bill to exempt retailers – among other entities – from Oregon’s stringent regulations governing private security firms, correcting unintended overreach from HB 2527 (2021), which applied licensure requirements meant for contract security firms to businesses with in-house security staff. These in-house professionals are already certified by the Department of Public Safety Standards and Training, making additional licensure redundant and costly. The bill will now head to the Senate floor for a vote this week before finally being considered by the House. OBI worked as part of a large and diverse coalition including grocers, schools and restaurants to advance this bill this session.
Business-development budget: On June 13, the House passed the budget for the Oregon Business Development Department, dba Business Oregon, our state’s economic development agency. As the recent University of Oregon Report pointed out, Oregon is not competitive in terms of economic tools for retention, expansion and recruitment. Available incentives also can’t overcome Oregon’s myriad policy disadvantages. The budget passed by a vote of 37-4 with 19 members excused. OBI will continue to advocate for an action plan to address the issues identified by the University of Oregon report as one necessary element of reversing Oregon’s competitiveness deficit. Meanwhile, check out this story, produced by the Oregon Journalism Project, that underscores the state’s need to focus on economic development.
Oregon Business Matters Talks to Epic Aircraft CEO Doug King
Epic Aircraft‘s E1000 GX won the 2024 Coolest Thing Made in Oregon contest. Epic Aircraft President and CEO Doug King joins the Oregon Business Matters podcast to talk about the Bend-based company, the E1000 GX and the challenges of operating a business in Oregon.
Meanwhile, the nomination phase of the 2025 Coolest Thing Made in Oregon contest is in full swing. Until July 10, anyone can nominate an Oregon-made product. Just head to OBI partner Here is Oregon’s nomination page here and share your name, email address and a link to the manufacturer of your favorite product.
Oregon Business Matters focuses on insights, issues and initiatives that affect Oregonians’ shared prosperity and the state’s economy.
Episodes can be found on OBI’s website here and on major podcast platforms, including Apple, Spotify and YouTube.
Oregon Business Matters Talks to State Sen. Mike McLane
OBI’s Oregon Business Matters podcast talks with state Sen. Mike McLane, a Powell Butte attorney with more than 20 years of military service who has served as a circuit court judge, as Oregon House Republican leader – and even written children’s books.
Oregon Business Matters focuses on insights, issues and initiatives that affect Oregonians’ shared prosperity and the state’s economy.
Episodes can be found on OBI’s website here and on major podcast platforms, including Apple, Spotify and YouTube.
Learn about AP Business Principles/Personal Finance Course
Skills-based education is a critical piece of developing today’s (and tomorrow’s workforce). Students also need a robust personal finance education to prepare them to live on their own – and even start their own business. For these reasons, teaching business and finance skills to high schoolers is a no-brainer.
With that in mind, OBI is working with the U.S. Chamber of Commerce to promote AP Business Principles/Personal Finance, an experiential course developed by the College Board that will be offered to high school students nationwide starting in the 2026-27 school year.
Please join us for a virtual webinar on Tuesday, June 24, to learn more. Clare Bertrand, the College Board’s director of career strategy and business partnerships, will join OBI to discuss the course and what employers can do to ensure that it becomes established and grows in Oregon.
The course will help students understand how businesses work by teaching them how they’re formed, how they reach customers, how they manage finances and much more. Personal finance concepts are woven throughout. This will not only help better prepare students to enter the workforce but also prepare those who may seek a path of self-employment. This course can help prepare a student seeking a four-year degree in marketing, an associate’s degree in medical billing or to transfer their high school CTE education into a small business.
The webinar will begin at 9 a.m., and there will be time for questions. Go here to register.
Notable News
Oregon business departures: The departure of Oregon companies points to larger problems for the state (Oregon Journalism Project).
Oregon mill sold: One of Oregon’s longest-running companies has sold a portion of its business to a Swiss forest products enterprise. The Swiss Krono Group will buy Collins Pine Co.’s particleboard and engineered wood siding manufacturing facilities in Klamath Falls (Portland Business Journal).
Tariff collections: A federal appeals court agreed June 10 to let the government keep collecting President Donald Trump’s sweeping import taxes while challenges to his signature trade policy continue on appeal (The Associated Press).
Portland regulatory change: Portland planners are looking to temporarily waive seismic assessments, landscaping and other building requirements to streamline development. The Code Alignment Project aims to reduce permitting delays, project redesigns and reviews to encourage development (Portland Business Journal).
Port timber facility: A Swiss company plans to build a mass timber manufacturing plant at the Port of Portland’s former Terminal 2, where it expects to employ around 60 people within the next five years (Portland Business Journal).
New legislator: After nearly a month without representation in the Oregon House, Oregonians in Clackamas, Washington and Yamhill counties have a new state representative: former nurse and school district superintendent Sue Rieke Smith. She fills the seat vacated by former state Rep. Courtney Neron Misslin, a Democrat. Neron Misslin was appointed in early May to the Oregon Senate after the death of state Sen. Aaron Woods (Oregon Capital Chronicle).
Emissions standards lawsuit: Oregon Attorney General Dan Rayfield and nine other states have sued the Trump administration over its attempts to dismantle strict car and truck emissions standards meant to reduce air pollution and push a transition from gasoline and diesel-powered vehicles to electric ones (The Oregonian).
U.S. growth: Economic growth in the U.S. might halve this year as a result of President Trump’s tariff policies, while the global economy is set to suffer a more modest, but still significant, slowdown, the World Bank said June 10 (The Wall Street Journal).
Oregon voter rolls: The Trump administration is wading into a court fight over whether Oregon does enough to scrub its voter rolls of ineligible voters. On June 6, the U.S. Department of Justice announced it would file a “statement of interest” in an ongoing suit between a number of conservative plaintiffs and the Oregon Secretary of State’s Office. The U.S. DOJ says it is watching the case closely for signs Oregon violated a federal law, the National Voter Registration Act (Oregon Public Broadcasting).
Battery provider bankruptcy: Tualatin-based Powin has filed for bankruptcy and named a new CEO as it looks to stay in business. The move comes less than two weeks after the grid battery company warned it could shut down in late July and just days after a big new round of layoffs (Portland Business Journal).
Nike layoffs: Nike has begun laying off more workers in its technology division. The number of jobs eliminated is unclear. An internal email sent on June 9 to Nike technology employees in North America and India asked them to work from home while the layoffs and other changes were announced (The Oregonian).
Early learning budget: Oregon’s agency overseeing child care and early childhood education is poised to receive $45 million less from the Legislature than it needs to operate those programs at their current scope over the next two years. The agency’s current budget relies on federal pandemic aid that is expiring, meaning its federal funding will drop from $390 million to just under $250 million for 2025-27 (The Oregonian).
Video game layoffs: Bend Studio, which makes games for Sony’s video game platforms in central Oregon, laid off nearly a third of its staff June 10, according to a report from Bloomberg. Bend Studio is a subsidiary of Sony (The Oregonian).
Bend housing inventory: For the first time in more than a decade, Bend approached a balanced housing market in May, according to a monthly housing supply report. That means as the market stretches toward six months worth of homes to sell — the industry standard of a balanced market — just as many homes will be on the market as there are buyers (The Bulletin).
Prevailing wage lawsuit: Oregon’s largest single source of state funding for affordable housing is at the center of a bitter dispute. Local Innovation and Fast Track, or LIFT, helps fund the construction of rental housing for people making 60% or less of median income. The program’s funding is the subject of a lawsuit filed in Multnomah County Circuit Court on May 21, claiming state bureaucrats are adding substantially to the costs of those projects—or, sometimes, killing them outright—in violation of state law (Oregon Journalism Project).
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.