Business Oregon Report: Make Business Retention a Priority
Oregon business recruitment: On March 19, Business Oregon, the state’s economic development agency, released a report describing successful efforts by other states to recruit Oregon businesses. The report, based on a survey of state employers, describes the conditions that lead businesses to invest elsewhere, the economic consequences for Oregon and some things the state can do to counter the trend.
Eye-opening statistic: Of the businesses that responded to the survey, 24% reported being approached by recruiting agencies outside of Oregon. And of that 24%, an astounding 68% reported moving or expanding outside of Oregon. Anecdotally, OBI often hears from business leaders and owners about how they frequently receive cold calls from other state economic development entities expressing interest in recruiting them and offering to work with them on various incentives and opportunities.
Important factors: Businesses choose to expand in other states for many reasons, including some over which policymakers in Oregon have no control. But the report lists policy-driven conditions within Oregon – or “push factors” – that make the jobs of recruiters elsewhere easier. These include Oregon’s regulatory climate, its tax burden and the cost of land and housing.
Recommended solutions: The report includes several recommendations, from prioritizing business retention and expansion to improving Oregon’s business climate. The report also urges the governor’s office to make economic development a priority, noting that “economic development (thought of in terms of prosperity for all Oregonians) is deeply linked with the state’s housing affordability and homelessness crisis. In this context, economic development can support or complement other activities that further state objectives.”
Learn more: Visit OBI’s blog for more on the report and read the report itself here. Also, check out OBI’s Oregon Competitiveness Agenda, which addresses most of the problems identified by Business Oregon.
OBI Backs Permit Reform Aimed at Oregon Housing Crisis
What happened: On March 17, Senior Policy Director Duke Shepard testified before the Senate Committee on Housing and Development in support of SB 6, an anticipated amendment to which would establish a 45-day deadline for officials to issue or deny housing-permit applications.
Why it’s necessary: Housing in Oregon is exceptionally expensive. In 2024, Oregon ranked only 44th nationally for housing affordability, according to the Missouri Economic Research and Information Center. And the state’s home-ownership rate in 2024 was the nation’s fifth lowest, according to the U.S. Census Bureau. Such costs push Oregonians to move to more affordable states and reduce Oregon’s economic competitiveness.
Prices and policy: The cost of housing is, in many ways, a result of policy choices, Shepard told the committee. SB 6, as amended, “presents an opportunity to establish clear and objective standards, while also providing the speed and certainty that we need to move forward.” Reducing regulatory barriers, as SB 6 would do, is a central component of OBI’s Oregon Competitiveness Agenda.
Meanwhile, in Austin: According to a Feb. 27 article in The Oregonian, Shepard explained, average rents in Austin, Texas, have dropped 22% since August 2023, “largely due to that city taking decisive action to address housing supply through process reforms and a focus on outcomes that benefit the broader community.”
Learn more: Go here to watch Shepard’s testimony and here to read his submitted testimony. Go here to learn more about OBI’s Oregon Competitiveness Agenda and here to visit OBI’s Oregon Competitiveness website, which contains data about housing affordability and much more.
Take Action to Support Competitive Federal Tax Policy
OBI focuses almost exclusively on state matters, advocating for policies that allow businesses to innovate, grow and create prosperity. However, federal policies affect Oregon businesses as well. These include the 2017 Tax Cuts and Jobs Act (TCJA), which is scheduled to expire at the end of 2025.
To learn more about the TCJA and the value of pro-growth tax policy, check out the U.S. Chamber of Commerce’s Growing America’s Future web page. The page contains information about the compounding effect of strong economic growth, the harmful consequences of various business taxes, and the value of competitive tax rates.
The page also makes a powerful case for extending the TCJA, which would spare millions of businesses a plunge from the 2026 tax cliff. Unless the TCIA is extended, the Chamber notes, the top marginal tax rate on pass-through businesses will jump by 10 percentage points, from 29.6% to 39.6%, on Jan. 1.
The web page also allows businesses to calculate their increased taxes should the TCJA expire.
Please urge Oregon’s U.S. senators and your U.S. representative to support an extension of the TCJA. Despite the harm expiration would do to thousands of Oregon businesses, extension of the TCJA is far from guaranteed.
For contact information, please visit OBI’s Federal Policy Resources web page. It has links to the offices of Oregon’s two senators and a link to a site that allows users to look up their representatives by zip code.
Register for April 28 Oregon Trade Summit
On April 28, join OBI for the Oregon Trade Summit, an event focused on trade, tariffs and their effects on Oregon’s economy. The Oregon Trade Summit will include:
- An in-depth look at Oregon’s trade economy, including partnerships in North America, Europe and Asia.
- An update from the U.S. Chamber of Commerce about the federal policy landscape.
- A multi-industry panel discussing opportunities and challenges facing businesses across Oregon.
The summit will take place at the Salem Convention Center. Doors will open at 1 p.m., and the program will run from 2-4:30 p.m. A networking reception will follow.
Go here to register.
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.
Schwabe Webinar: State of Manufacturing in the Pacific NW
On April 2, Schwabe will review the highlights of its recently completed State of Manufacturing in the Pacific Northwest report, which is based on a recent survey conducted with Aldrich CPAs + Advisors. The webinar will run from 11 a.m. to noon and include the following highlights:
- Preparing for the Next Generation of Leadership: With 55% of manufacturers planning leadership transitions, are businesses ready for what’s ahead? Schwabe’s report explores strategies for smooth transitions and maintaining growth through change.
- Supply Chains in Focus: How are manufacturers addressing disruptions and rising costs? From innovative solutions to long-term strategies, uncover the actions reshaping supply chains in your region.
- Optimistic Hiring Outlook: Manufacturers of all sizes show confidence, with plans for full-time and part-time workforce additions
Webinar attendees will have a chance to share their thoughts in a roundtable format at the end of the presentation. Go here to register.
Legislative and Rulemaking Updates
State Agency Dominos: On March 20, Gov. Kotek announced a series of agency directorship changes. First, Betsy Imholt will leave the Department of Revenue to run the Department of Administrative Services. She replaces Berri Leslie, who announced her resignation earlier this year. David Gerstenfeld will leave his role as director of the Oregon Employment Department to lead the Department of Revenue. Andrew Stolfi, currently the director of the Department of Consumer and Business Services, will move over to the Employment Department. The governor has announced a search for a new director of DCBS. We are concerned about this level of disruption in state government leadership but will work with the directors to help them understand how each agency interacts with business. We have been in touch with the governor’s team about the DCBS search. There has been a long practice of having a business representative engaged, and we await the search plan.
Legislative Deadline Passes: March 21 was the first major deadline of the session. It was the date by which bills needed to be posted for a work session (vote) if they were still in a policy committee in their chamber of origin. The vote must occur on or before April 9. Some committees are exempt from this requirement: revenue, rules and joint committees (such as budget-writing and transportation). Committees have posted nearly 900 bills for hearings or committee action over the three weeks leading up to the April 9 deadline. Of those, OBI will be testifying on or monitoring action on 325 bills. Many of these bills have been posted without clear plans to move them, but as backup plans in case other legislation fails or as placeholders. Over the next couple of weeks, OBI expects to see a flurry of amendments as efforts intensify to move bills before the deadline. Several hundred more bills on OBI’s radar are still alive in those exempt committees.
Worrisome Ballot Referral: This week, the Senate Committee on Rules will hear SJR 28, which is a ballot measure referral that would amend the Oregon Constitution to include the right to a clean, healthy and safe environment for all people, including children and future generations. It also would establish a private right of action based on harm or the threat of harm to the environment. The exceptionally broad language in SJR 28 would make it possible for any Oregonian to sue based on any type of environmental impact or possibility of environmental impact now or in the future. Almost any normal and otherwise lawful personal, government or business operation could be the basis for suit: driving a vehicle, building or improving infrastructure, removing a dangerous tree or harvesting timber, applying fertilizer, etc. OBI is extremely concerned about this bill and has mobilized a broad coalition to oppose it.
Unemployment Bill Advances: On March 20, the Senate passed SB 916 by a one-vote margin. The bill would allow workers to collect unemployment insurance benefits after two weeks on strike. The bill was modestly improved by allowing collection of overpayments and reductions in back pay if employees are eligible for both UI benefits and back pay in a final contract. Two Democrats, Sen. Janeen Sollman of Hillsboro and Sen. Jeff Golden of Ashland, voted no, both pointing to the impact on local governments and school districts as their primary rationale. OBI, the Northwest Grocery Retail Association, NFIB, the League of Oregon Cities, the Association of Oregon Counties and the Oregon School Boards Association remain opposed to the bill and will focus on defeating it in the House.
Budget Framework Dropped: On March 19, the co-chairs of the Joint Committee on Ways and Means issued the budget framework that serves as the Legislature’s opening response to the governor’s recommended budget released in late 2024. The framework notes that federal uncertainty requires the Legislature to adopt a conservative budget that provides flexibility to adapt to reduced funding. Federal money supports about 32% of Oregon’s budget. While restrained spending is a good start, OBI wants to be sure that, amid all the attention they are giving to possible federal budget changes, lawmakers aren’t losing sight of the warning signs in our own state-level revenue found in the Office of Economic Analysis’ quarterly reports. Further, OBI wants to be sure that lawmakers don’t spend additional one-time money to perpetuate long-term needs. That would be unsustainable. Recent forecasts have added $1.65 billion in expected money for the biennium. This increase, coupled with the conservative approach noted by the co-chairs, resulted in a framework that leaves a surplus of nearly $1 billion and dedicates $100 million in emergency funds. This $1.1 billion is envisioned for “critical investments” and as a response to potential federal cuts. While the framework dedicates $15.39 billion to education programs and $13.7 billion to human services (a $2 billion increase), many other budgets received cuts. These include programs designed to invest in economic and community development, which will be cut by more than $560 million, or about 40%, over the next biennium. That is unfortunate because Oregon already sorely lacks economic development tools enjoyed by other states.
Business Oregon Budget: Speaking of economic development budgets, last week saw the last of the hearings on the governor’s recommended budget for Oregon’s economic development agency, Business Oregon. At a March 18 public hearing, OBI expressed support for spending on brownfields, industrial land, dredging and container port operations. OBI also expressed support for continued funding of the Oregon Manufacturing Extension Partnership and concern about proposed cuts to the Oregon Metals Initiative and Oregon Manufacturing Innovation Center. OBI noted once again that Oregon is in a manufacturing recession, and economic development remains critical to the state’s prosperity.
Contractor Liability Bill: SB 426 would make property owners and general contractors liable for wage theft committed by subcontractors. The bill is scheduled for a committee vote on March 26. OBI and other stakeholders have been working to refine language to make the concept workable. OBI remains opposed to the underlying premise of making some employers liable for the wrongful actions of others but believes the bill must be improved if it can’t be defeated. OBI is determined to seek changes that would prevent unions from harassing non-union contractors through civil litigation.
Recycling Technology Ban: On March 20, OBI testified in opposition to HB 2960, which would ban facilities that use certain plastic-recycling technology. Proponents claim using such technology would amount to “greenwashing” by “fossil fuel” companies. OBI pointed out, among other things, that we have to do something with plastic, from burying it to transforming it. So, banning recycling technology would be nonsensical. This point was driven home by two Oregon entrepreneurs who are working to address plastic pollution by developing technology the bill would prohibit.
High Speed Rail: On March 18, the Joint Committee on Transportation listened to a series of presentations on high speed rail between Vancouver, B.C., and Portland. While supporters cited rail projects in Europe and Asia, they neglected to mention California’s struggle to build high-speed rail. SB 715, which would create a rail task force, received a public hearing. Sen. Chris Gorsek, D-Gresham, brought forward an amendment allocating $10 million to research high-speed rail. Meanwhile, there has been no further discussion about a broader transportation package.
Seafood Processor Relief: On March 20, the House Committee on Climate, Energy and Environment heard HB 3814, which is the result of lengthy discussions between DEQ and seafood processors about water quality standards that have proven difficult to meet. OBI provided testimony in support of the bill, which would allow processors to use a mixing zone to comply with water quality standards since fecal bacteria from cold-blooded species don’t produce fecal coliform bacteria that would create risks to people and animals.
Semiconductor Bill: On March 19, OBI provided testimony in support of HB 2277(as amended), which would decouple Oregon’s CHIPs Act from federal funding requirements. This would clear dedicated money to flow to Oregon companies that meet all of Oregon’s requirements but have not secured federal funding. There is $40 million remaining in the Oregon CHIPs fund. OBI also noted that nothing prevents the Legislature from reauthorizing the expired super-siting authority granted to the governor by SB 4.
Climate Superfund Bill: SB 682, which would establish a climate superfund to address retroactive climate impacts from the use of fossil fuels, did not receive a hearing. However, another bill, SB 1187, will receive a hearing on April 7 and a possible work session April 9. SB 1187 is more narrowly focused than SB 682 but is still extremely worrisome. OBI is working with business stakeholders to prevent the bill from moving out of committee.
Energy Bills: Several bills that would affect utilities and energy prices are scheduled for work sessions prior to the April 9 deadline. Several placeholder bills with worrisome “relating to” clauses are scheduled for hearings and work sessions as well. Amendments have not been posted yet for most of the placeholder bills, which therefore could become vehicles for a range of harmful proposals. OBI will monitor these closely.
Jet Fuel Tax: HB 2153, which would double the tax on jet fuel and apply an annual inflation adjustment thereafter, will be heard in the Joint Committee on Transportation on March 24. The additional money is earmarked for activities such as business development, marketing and infrastructure. The uses would not be related directly to aviation. OBI will testify in opposition to the bill.
Notable News
Santiam Canyon Fire: Oregon Department of Forestry investigators have determined that the 2020 Santiam Canyon fire was not caused by downed power lines, as plaintiffs’ attorneys have alleged, but rather by hot embers drifting into the canyon from the nearby Beachie Creek fire. The report, released March 19, is a huge victory for PacifiCorp, which in 2023 was found by a jury to have been grossly negligent in declining to shut off power to the Santiam Canyon fire (Willamette Week).
Ampere Sale: SoftBank said March 19 it is buying chip designer Ampere for $6.5 billion, a move aimed at expanding the Japanese investment firm’s presence in artificial intelligence and data centers. Ampere’s headquarters are in Silicon Valley, but 200 of its employees work at its engineering office in Northwest Portland (The Oregonian).
Too Many Bills: The Oregon Legislature began its 2025 session with a record number of bills filed before the session opened, at least in the 25 years that the Legislature’s Office of Legislative Counsel has been counting. The record-breaking continues, with 3,391 bills filed as of March 19. That’s nearly 100 more than the previous modern-day record set in 2001 (The Oregonian).
Intel Transition: Intel Vice President Ann Kelleher, an engineer charged with restoring the technological lead the company once held, plans to retire by year’s end, setting off a major transition in the company’s manufacturing arm (The Oregonian).
Portland Transportation Tax: Portland Mayor Keith Wilson is considering a potential tax on residents and businesses to help bolster the city’s ailing transportation system, becoming the latest in a line of elected leaders to pursue the idea (The Oregonian).
Manufacturing Jobs: Oregon manufacturing jobs, which never fully recovered from the pandemic, are heading south again. The state’s factories employ nearly 14,000 fewer people than they did at the start of 2023. Oregon manufacturing jobs are at their lowest point since the pandemic’s early days, according to new state data (The Oregonian).
Electric Vehicles: Oregon and nine other states recently achieved a collective goal of shifting new car buyers toward electric rather than gas-powered vehicles in an effort to reduce pollution and combat climate change (Oregon Capital Chronicle).
Medicaid Tax: The Oregon Senate has passed a bill that will raise billions in federal dollars for the state’s Medicaid program and allocate a substantial portion back to hospitals. It now goes to the governor for her signature (Oregon Public Broadcasting).
Wildfire Bottle Tax: State Reps. John Lively and Bobby Levy have introduced a bipartisan proposal to fund wildfire prevention and suppression in Oregon that largely mirrors a set of recommendations that emerged from a task force that met on the topic over the last year. House Bill 3940 would create a 5-cent surcharge on bottles and cans to raise money for the Department of the State Fire Marshal, dedicate money raised by an insurance tax to pay for wildfire prevention and set aside money from the state’s reserves (The Oregonian).
Homelessness Poll: Oregon cities hoping to win new authority to restrict homeless camps are rushing to convince lawmakers to take their request seriously — and pushing a new poll they say shows change is needed. The League of Oregon Cities is circulating data that suggest most voters disapprove of elected officials’ attempts to stem the state’s homeless crisis and support stronger policies to restrict camping (Oregon Public Broadcasting).
Portland Apartment Construction: Last year, apartment construction in Portland metro area fell to levels not seen since 2013, according to statistics collected by CoStar, a real estate information firm based in Arlington, Va. (Willamette Week).
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.