Small Businesses Say They Can’t Afford to Grow in Oregon
Business survey: In a recent email survey of more than 300 small businesses, 75% of respondents said they’d like to grow their businesses but can’t afford to do so in Oregon. The survey, conducted in the first quarter of the year, featured many of the questions contained in a 2023 survey that produced sobering results. In many cases, not much has changed. Businesses remain concerned about affordability and regulatory complexity.
Top concerns: As they did in 2023, business responding to this year’s survey listed taxes/fees, Oregon’s regulatory environment and increasing costs as their top concerns. Thirty eight percent of respondents said they’re considering closing, selling or moving their businesses because of tax rates, echoing the 36% response three years ago. Thirty three percent said they’re considering closing, selling or moving because of the state’s regulatory environment, echoing the 36% response in 2023. Similarly, 58% of respondents (55% in 2023) said increasing labor costs have caused them to reduce employee numbers.
Can’t keep up: As in 2023, many responding small businesses pointed to the pace of regulatory change as a problem. Seventy percent of respondents (74% in 2023) said regulations affecting businesses change so frequently it’s hard for them to keep track of what they’re supposed to do. Similarly, 78% of respondents (80% in 2023) said it feels like the goalposts move so quickly that it’s hard to keep up.
Little faith in leaders: Faith in state agencies and legislators remains low. Sixty five percent of respondents (71% in 2023) said it feels like state agencies are more interested in finding wrongdoing than in helping businesses like theirs comply with regulations. Only 22% of respondents (18% in 2023) said state lawmakers care about the success of their businesses. And in response to a new question this year, only 21% of respondents expressed confidence that state leaders can improve the business climate.
The takeaway: Despite the growing acknowledgement by legislators of both parties that the state needs to focus on private-sector job creation, most small businesses continue to consider Oregon an expensive and difficult state in which to operate. It’s so difficult, in fact, that most of those that would like to grow here – and employ more Oregonians – simply don’t think they can afford to. To encourage private sector job creation, legislators must address longstanding problems such as Oregon’s tax and regulatory environments.
Register Now: Oregon Economic Summit on May 28
Join OBI for its first annual Oregon Economic Summit on May 28 at the Salem Convention Center. The event is a rebrand of our Annual Meeting event. Visit the event web page here to register. The theme of the inaugural summit is Changing Our Trajectory: Prioritizing Economic Growth and Private Sector Job Creation. The program will begin at 3:30 p.m. A reception with political leaders will follow at 5 p.m.
Program
The Economic Imperative
The need is clear, and it’s time to act. Where does Oregon stand relative to other states, and what are those states doing to move even further ahead?
Ted Abernathy, managing partner of Economic Leadership
Panel Discussion
A conversation among thought leaders about the conditions in Oregon, the need for urgency and what the state needs for economic growth.
Monique Cardwell, president and CEO, Greater Portland Inc.
John Horvick, senior vice president, DHM Research
Tim Inman, chief policy and public affairs officer, The Ford Family Foundation
Mike Wilkerson, partner and director of economic research, ECOnorthwest
Moderated by Jordan Papé, CEO, The Papé Group
Call to Action
Driving change together.
Angela Wilhelms, president and CEO, Oregon Business & Industry
OBI Releases Q1 2026 Oregon Jobs Report
What happened: On April 29, OBI released the Oregon Jobs Report (read it here) covering the first quarter of 2026. The report is produced by Colorado-based Aspen Tech Labs, which maintains a database of more than 10 million active job postings worldwide from over 350,000 employers. The report shows high-level hiring activity and advertised compensation across the state for the first quarter of 2026.
What it shows: The information contained in the Oregon Jobs Report provides a useful, if limited, snapshot of statewide hiring activity. It is not intended to capture every piece of potentially relevant data – business closures and contractions, for instance – but what it does capture identifies important trends, many of which point to the continued relative weakness of Oregon’s economy:
- Oregon job postings rebounded in the first quarter of 2026, increasing by 6.6% over the fourth quarter of 2025.
Year-over-year job postings in Oregon declined significantly, dropping 10.4% from March 2025 to March 2026. National numbers are much stronger, declining only 2% from March 2025 to March 2026. - The median full-time salary tied to Oregon job postings in March 2026 was 2.2% higher than the median full-time salary in March 2025. Nationally, the median full-time salary for the comparable period grew by 4.4% – twice the rate of Oregon’s.
- Oregon’s unemployment rate continues to exceed the national average. In January 2026 – the most recent month for which data was available – Oregon’s unemployment rate was 5.2% compared with a national rate of 4.3%.
- Health care continues to be an area of strength, accounting for a large portion of job postings and relatively high pay. However, health care is funded largely by other private-sector activity, from employer-covered insurance to government spending supported by tax dollars.
- Large companies produce a large number of jobs, demonstrating their importance to Oregon’s economy.
In its work to strengthen Oregon’s economy, OBI provides a range of timely and relevant data. In addition to the quarterly Oregon Jobs Report, OBI maintains The Oregon Scorecard and produces reports through the OBI Research and Education Foundation, including those examining Oregon’s business tax burden, its regulatory environment, manufacturing sector and educational funding structure.
Oregon Business Matters Talks with Sport Oregon CEO Jim Etzel
Sport Oregon is a nonprofit that helps drive economic growth through sports. Just weeks ago, the organization released a first-of-its-kind economic analysis of the state’s sport’s economy. Conducted by respected economic consulting firm ECOnorthwest, the report found, among other things, that commercial sports account for 23% more of Oregon’s economic output than the national average.
In this episode, Sport Oregon CEO Jim Etzel joins Oregon Business Matters to discuss that report, the role of public investment can play in growing this important part of Oregon’s economy, and some of the state’s biggest spectator sports events. Listen to the interview here.
In case you missed them, check out our recent interviews with Hillsboro Hops President and General Manager K.L. Wombacher, Looptworks founder Scott Hamlin and Trevor Giroux, president of ATI‘s Specialty Alloys and Components Division in Millersburg. Visit the Oregon Business Matters website to listen.
The Oregon Business Matters podcast can be found on major podcast platforms, including Apple, Spotify and YouTube.
Oregon Scorecard Updates: School Data, Establishment Births and Deaths
Following the National Education Association’s release of its Rankings of the States 2025 and Estimates of School Statistics 2026 report and the Bureau of Labor Statics’ release of employment data, OBI updated related parts of The Oregon Scorecard:
Public school enrollment: Fall 2025 enrollment in Oregon public schools was 539,644, having dropped 1% since fall 2024. Enrollment in the state’s public schools has fallen steadily since 2019, and 2025 marks the sixth consecutive year of declines. Public school enrollment has declined nationally over the same period, but less steeply than in Oregon.
Per-student spending: During the 2025-26 school year, Oregon will spend an estimated $18,381 per student, ranking 20th nationally and just below the national average expenditure of $18,870.
Average teacher salary: Oregon’s estimated average public school teacher salary in 2025-26 is $83,727, ranking 9th nationally and above the national average of $76,552. The state’s 2025-26 salary represents a 2.5% increase over the previous year, slightly less than the 2.8% average national increase. Between 2023-24 and 2024-25, however, Oregon’s average teacher salary increased by 5.9%, the fourth highest rate among states.
Establishment births and deaths: OBI updated this section of The Oregon Scorecard, replacing plain-English terms with the exact terms used by the Bureau of Labor Statistics and providing a full 20-years of data to better illustrate trends. Because BLS terminology is not entirely intuitive, OBI added a link to a definition document. Check it out if you want to know the difference between an establishment and a business or a death and a closure.
2024 births, deaths: Oregon experienced a 3.6% average quarterly establishment death rate in 2024, the 13th highest rate in the nation. The state’s 2023 rate ranked 12th. Oregon’s 2024 establishment death rate exceeded the national average of 3.3%. Oregon’s average quarterly establishment birth rate in 2024 was 3.2%, which ranked 28th nationally, a 16-place drop. The U.S. average establishment birth rate in 2024 was 3.5%.
2025 establishment births: Data on establishment births leads data on establishment deaths by about three quarters for reasons The Oregon Scorecard’s definition document explains. So, while the BLS only recently provided full-year 2024 data for deaths, it already has reported birth data for the first three quarters of 2025. At 2.67%, Oregon’s average quarterly establishment birth rate over this period is among the nation’s lowest, tied for 44th and a full percentage point below the national average of 3.67%.
Oregon Leadership Academy Accepting Applications
Applications are open for OBI’s inaugural Oregon Leadership Academy. The program is designed for early- to midcareer professionals interested in public policy and civic engagement.
The initial cohort will run from September 2026 through March 2027, with in-person sessions in Salem, Portland and Newberg. Applications are due May 31, 2026. Learn more on the academy’s web page here.
Political Updates
Primary election: Ballots have been mailed for the May 19 primary election. Available polling indicates that Gov. Tina Kotek (D) and Sen. Christine Drazan, R-Canby, appear to be headed for a rematch at the top of the state ticket, but we’ll know for sure in a few weeks. In the legislative arena, there are a handful of competitive primaries between the two major parties. Ballots must be postmarked by May 19 to count. You can mail them back or find a list of drop boxes here.
Legislative primary endorsements: Below are the legislative candidates the OBI Candidate PAC has endorsed for the May primary. Please note: OBI PAC prioritizes endorsements in only the most competitive primaries or those with the potential to be competitive in the general election and does not make recommendations in all races.
- Ashley Hartmeier-Prigg (D, HD 27, Beaverton area, open seat)
- Rep. Daniel Nguyen (D, HD 38, Lake Oswego and SW Portland)
- Sen. Janeen Sollman (D, SD 15, western Washington County)
- Claire Lynn (R, HD 9, Florence to Coos Bay, open seat)
- Scott Hege (R, HD 52, The Dalles/Hood River/east Multnomah. County, open seat)
- Rep. Greg Smith (R, HD 57, northeastern Oregon)
- Rep. Jami Cate (R, SD 6, Linn/Lane County, open seat)
- Courtney Bangs (R, SD 16, North coast/Columbia County, open seat)
Disconnect referendum: On the heels of a successful effort to refer portions of the 2025 transportation package, Rep. Ed Diehl, R-Scio, filed a referendum on two provisions of SB 1507, the bill that disconnected Oregon partially from the federal tax code. Rep. Diehl’s referendum would ask voters whether to vote “yes” to eliminate state-level deductions for bonus depreciation and auto loan interest or “no” to maintain those same state-level deductions. Diehl, who is running for governor, is pitching the referendum alongside initiative petitions filed by Rep. Kevin Mannix, R-Salem, that propose reforms to Oregon’s catch-and-release laws and would eliminate the estate tax. A political nonprofit known as No Tax Oregon, with which Diehl is affiliated, is organizing the collective effort. While Diehl’s organizing prowess should not be underestimated given his success with the transportation referendum, it’s not clear if this effort will capture the same level of grassroots energy. He has until early June for the referendum signatures and early July for the others.
Policy and Rulemaking Updates
SB 1507 second guessing: It seems that some policymakers are beginning to question the passage of SB 1507, which disconnected Oregon partially from the federal tax code. Multiple reports from various stakeholders indicate that policymakers are now realizing the bill had consequences they did not understand or intend, despite warnings before the bill was passed and signed. Several officials have reached out with interest in identifying fixes, though it’s not clear what those might be and how likely they would be to pass. Perhaps this will serve as warning going forward that complicated tax policy requires robust engagement with those who truly understand it, including affected entities and experts. Derek Sangston will work with OBI’s tax committee and other stakeholders on solutions. If you are interested in this issue and not already engaged in the discussion, please contact him.
Recycling regulation: On March 30, the Department of Environmental Quality held the most recent meeting of its third rulemaking advisory committee on the 2021 Plastic Pollution and Recycling Modernization Act. DEQ provided an update on how plastic garbage bags would be treated under the program starting in 2028. It sounds like a small issue, but it illustrates how out of alignment with reality Oregon’s law and its implementation are. First, garbage bags are considered packaging for purposes of Oregon’s law. To offset the costs associated with that, DEQ had planned to provide a discount to businesses that sell garbage bags to consumers—a nice but completely inadequate gesture. Every state with a similar program simply treats garbage bags as what they are: a consumer product. Thankfully, and with much stakeholder engagement by OBI and others, DEQ is realizing that garbage bags sold to consumers should not be included in the program. Unfortunately, DEQ is exhibiting little logic elsewhere. Consider protein packaging such as the sort that contains raw chicken. DEQ has not excluded this packaging, as other states have done.
Workforce needs: Rep. Dacia Grayber, D-Portland, is seeking input from employers to identify gaps in Oregon’s workforce systems. As chair of the House Labor and Workplace Standards Committee, Grayber has indicated workforce policy will be a priority in the 2027 legislative session. Her office is requesting feedback on challenges employers experience with workforce development and recruitment, what changes — large or small — could help recruit and retain employees, what currently works and does not work, and other workforce solutions that would be helpful. Those interested in sharing their experience can contact Ryan Tuthill.
Health plan taxes: While the Universal Health Plan Governing Board steams ahead, trouble abounds in its Finance and Revenue Subcommittee, whose members sent two competing reports to the full board. The minority report expresses concerns that costs are underestimated by billions of dollars, that start-up and expanded benefit costs have not been factored in, that there is no estimate of year-by-year variability and that the subcommittee only conducted a static tax analysis, which would understate the actual level of taxation needed. That the committee underestimated costs for the program is far from surprising, and OBI continues to oppose efforts to establish a state-run single-payer system.
Custom fabrication rules: BOLI published proposed rules implementing HB 2688 on April 14. HB 2688 requires prevailing wages to be paid for the manufacture of “bespoke” items made for public works projects. The law goes into effect on July 1. Many details about the law’s implementation were left to BOLI to determine via administrative rules. There is a rulemaking hearing on May 27 at 10 a.m., and the comment deadline is May 31 at 5 p.m. Paloma Sparks will submit comments for OBI and is happy to share them with any member who would also like to submit comments. You can email her for more information.
Data center committee: In January, Gov. Kotek announced the formation of a Data Center Advisory Committee to develop policy recommendations for the 2027 legislative session. As reflected in both state and national policy and political contexts, data centers are a current flashpoint issue. We saw this all too clearly in the 2026 debates about SB 1586, Sen. Janeen Sollman’s JOBS Act, and HB 4084, Gov. Kotek’s permitting and enterprise zone bill, which ultimately banned data centers from participating in the standard enterprise zone program through the end of the 2027 legislative session. The advisory group has a publicly availably schedule of meetings, organized by topic (economic development, land use, water, electricity, etc.). Each meeting includes time for public comment. OBI is watching this process closely and offering comments as appropriate. The advisory committee is scheduled to issue a report July 31. While issues relating to energy, water, incentives, land, etc. are important to discuss in the context of any development, OBI recognizes that data centers are critical infrastructure, supporting the modern economy’s use of technology, data and computation whether in retail, health, education, finance, emergency management, entertainment, government services and more. OBI opposes bans, moratoria and other restrictions that further erode Oregon’s competitiveness.
Transportation work group: Gov. Kotek has formed a Transportation Vision Work Group co-chaired by former state representative and House Co-Speaker Bruce Hanna, R-Roseburg, and former ODOT Director Grace Crunican (click here for full membership, which does not include any legislators). The group will have six subcommittees with specific areas of focus (e.g., major projects, transit, operations and maintenance). OBI members and staff have been invited to participate in some of them. Susan Peithman, director of the climate office at the state transportation agency, will be the agency’s lead representative on the group, which is to complete its work and deliver recommendations by the end of the year. The first meeting took place May 1.
Climate proposals: OBI submitted comments in response to the Oregon Department of Energy’s (ODOE) draft “Gap Measures and Scenarios for Analysis” report as part of the Transformational Integrated Greenhouse Gas Emissions Reductions Project (TIGHGER 2.0). Oregon has been, and continues to be, one of the lowest greenhouse gas-emitting states on a per capita basis. While OBI shares a commitment to reducing carbon emissions, ODOE’s approach is flawed and overly aggressive and disregards economic impacts.
Health provider reimbursements: Oregon Health Authority’s Affordability Committee spent its April meeting developing a reference-based pricing mechanism to recommend to the Oregon Health Policy Board (OHPB). Committee members discussed commercial reimbursement caps for inpatient and outpatient services at 200% of Medicare rates. The committee was unable to come to consensus and pushed a decision to its May meeting. The committee must submit recommendations to the OHPB by June, at which time the board will consider whether to advance them into legislative action. OBI is concerned that reimbursement caps could further distort the market and potentially reduce employee access to care without addressing the underlying drivers of health care costs.
Higher education study: OBI met in April with OregonConsensus to discuss implementation of HB 4124, which requires the Higher Education Coordinating Commission to make recommendations to enhance the sustainability and viability of Oregon’s higher education system. The study will feature recommendations to increase student access, support economic development and improve institutional viability. Recommendations are due to the Legislature by April 1, 2027.
Employability skills webinar: OBI will host members of the Oregon Employability Skills (OES) initiative for a webinar on June 5. The initiative was designed to help bridge workforce gaps by strengthening the sometimes-missing soft skills that support success for both employers and employees. These skills include communication, teamwork, problem-solving, self-awareness and resilience. Presenters will discuss how the initiative was developed, how it addresses identified workforce needs and how employers can use the OES curriculum to support employee recruitment and retention. Learn more about the Oregon Employability Skills initiative here.
Notable News
Retail employment: Oregon retailers bounced back rapidly from the pandemic, recovering nearly all the jobs the industry lost in just a year. Oregon retail employment began falling again about three years ago and is now down nearly 6% compared to 2019, according to state figures. Retail jobs are down nationally, too, but only by about 1% (The Oregonian).
DEQ seafood fine: Oregon regulators have issued nearly $3.2 million in civil penalties to companies under the Pacific Seafood corporate umbrella, including the second-largest fine the Oregon Department of Environmental Quality (DEQ) has ever levied. The largest penalty — nearly $3 million — targets Pacific Seafood’s Charleston facility on the southern Oregon coast (KPTV).
Oregon layoffs slowing: Oregon’s jobless rate surged over the past two years as big layoffs at many of the state’s biggest employers — Intel, Nike and OHSU, among others — eliminated more than 14,000 positions. The pace of job cuts topped the worst days of the Great Recession. Over the past several months, though, the number of layoffs has slowed considerably. And Oregon’s unemployment rate has stabilized, holding steady for nearly a year (The Oregonian).
PacifiCorp joins market: PacifiCorp on May 1 became the first utility outside California to join a new wholesale energy market, a move it says will generate substantial savings for customers, greater reliability and reduced greenhouse gas emissions (The Oregonian).
Moda Center funding: Gov. Tina Kotek said she expects the Portland City Council to lock in its contribution to the expansive funding package for Moda Center renovations within the next six weeks, with the Rose Festival circled as a symbolic target (The Oregonian).
Columbia Distributing: Republic National Distributing Co.’s restructuring, which shook California’s alcohol industry last year, sent a ripple through Oregon on April 27. RNDC and Columbia Distributing announced a nonbinding letter of intent to transfer “certain wine and spirits distribution rights in Oregon and Washington” to Wilsonville-based Columbia (Portland Business Journal).
Metro tax migration: Billions of dollars in wealth and earning power were on the move in the Portland metro area between 2022 and 2023, and Clark County, Wash., was the big winner (Portland Business Journal).
Portland street fee: Portland residents and businesses will soon face a new monthly fee, after city councilors adopted the surcharge to bolster the city’s ailing transportation system, a feat that prior local elected leaders tried — and repeatedly failed — to achieve (The Oregonian).
School performance: With clear hesitation, the eight members of the State Board of Education signed off April 28 on a plan, championed by Gov. Tina Kotek, that sets a host of far-reaching new academic performance targets for Oregon’s public school students (The Oregonian).
Washington County budget: Washington County’s five-year streak of budget cuts will be broken, officials announced April 27. An unexpected spike in assessed property values, mostly generated by industrial properties in Hillsboro, will help shore up potential gaps in the county’s $2.2 billion budget for the 2027 fiscal year (The Oregonian).
Oregon teachers union: Over the past two months, The Oregonian/OregonLive spoke with dozens of current and former union employees, educators and lawmakers who outlined how an energized group of far-left-leaning teachers and staff members have gained enough traction to test the Oregon Education Association’s traditional links to the mainstream of the state’s Democratic Party (The Oregonian).
Portland grocery grants: Portland Mayor Keith Wilson wants to establish a green new deal for would-be grocers — by offering cash to help them get off the ground. The city would chip in up to $100,000 toward the creation of new food shops or supermarkets under a storefront support program that Wilson included in his proposed budget (The Oregonian).
Lithium drilling challenge: Environmental advocates have filed suit to block exploratory drilling for a potential large-scale lithium mine in a remote corner of southeast Oregon near the border with Nevada (The Oregonian).
Oregon health care: A closely watched legal fight over who controls emergency room care in Lane County is shaping up to be the first major test of the nation’s toughest law limiting corporate influence in medicine — and the stakes are high for patients and the future of physician staffing across Oregon (The Oregonian).
Data centers: The proliferation of power-hungry data centers is making it difficult to predict the future of the Pacific Northwest’s energy needs (OPB).
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.
- Partners Retirement Plan: Allows multiple employers to offer a 401(k) benefit to employees through a group structure while maintaining individual company design and control over the benefit – such as eligibility, employer match, and vesting.
- 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.
- 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.