Policymakers Must Note Oregon’s Nation-Leading Tax Ranking Drop
Oregon’s freefall: On Oct. 30, the nonpartisan Tax Foundation released its annual State Tax Competitiveness Index, which dropped Oregon’s ranking to 35th nationally. As recently as 2019, Oregon’s overall ranking was 7th, indicating a 28-place plunge in only seven years. Check out our blog post on the latest rankings here and the index itself here.
Oregon is an outlier: The Tax Foundation subsequently produced a graphic (here) showing which states have experienced the greatest ranking changes since 2020. It is sobering. No state has experienced a bigger drop in the rankings than Oregon over the past six years. Oregon’s decline over that period – 27 places – is more than double that of Washington, which saw the second largest decline – 12 places.
Why it matters: Businesses invest in states that provide the conditions they and their employees need to succeed. Oregon’s rapidly eroding tax structure effectively pushes businesses to invest elsewhere. Jobs, philanthropy and tax revenue follow.
Behind Oregon’s fall: Why has Oregon fallen so far? Primarily because, the Tax Foundation explains, the state “adopted a modified gross receipts tax in addition to its normal corporate income tax. This new tax has relatively high rates, which compounds the tax pyramiding caused by typical gross receipts taxes.” Additionally, the Tax Foundation notes, other states have improved the competitiveness of their tax structures.
Improvement is possible: To become more competitive, Oregon must fix its business climate, beginning with its tax structure. OBI’s Oregon Competitiveness Agenda contains many suggestions to that end. So does the Tax Foundation, which explains some of the things the states that have boosted the competitiveness of their tax codes the most since 2020 have done. Over this period, for example, Tennessee’s ranking has improved even more dramatically than Oregon’s has fallen.
What they’re doing: Read the Tax Foundation’s full blog post here.
Transportation Tax/Fee Package Referendum Effort Underway
OBI has fielded a lot of questions about the effort to send the transportation tax and fee package passed earlier this fall to voters for an up-or-down vote. After a monthlong stall, Gov. Kotek signed the bill, allowing those behind the referendum effort to begin collecting signatures. They have until Dec. 30 to submit approximately 78,000 valid signatures (so they need more to account for possible errors/invalid signatures). Those interested in this effort can visit www.stopthegastax.com to learn more about the signature gathering effort, request a petition, etc.
Oregon Scorecard Updates Show Continuing State Struggles
Oregon Scorecard updates: Several data points on OBI’s Oregon Scorecard have been updated since it was launched earlier this year. A handful of new metrics have been added as well. Scorecard updates point to a continuing slide in Oregon’s economic competitiveness. New metrics include crime statistics and a national regulatory ranking.
What is the Scorecard? The Oregon Scorecard is a web-based collection of information that sheds light on Oregon’s overall economic health and relative competitiveness. Most metrics include historical data, allowing users to spot trends. Data sources are listed on historical data graphics.
Tax competitiveness slide: The nonpartisan Tax Foundation released its annual State Tax Competitiveness Index on Oct. 30. Oregon’s overall ranked dropped two places, to 35th. The Tax Foundation ranks states in five additional categories. In only one of these, sales taxes (4th), is Oregon among the top half of states. Other rankings include property and wealth taxes (28th), unemployment insurance taxes (41st), individual income taxes (41st) and corporate taxes (49th).
Stagnating household income: Median household income (current dollars) was updated with 2024 data, showing that Oregon ($89,700) continues to exceed the U.S. average ($83,730). However, Oregon median household income grew at a far slower rate (1.1%) than the U.S. average (3.9%) from 2023 to 2024, as it did between 2022 and 2023.
Business creation slows: The rate at which new businesses formed in Oregon during 2024 fell significantly relative to other states. Oregon’s rate of new business creation was the nation’s 12th highest in 2023 and fell to 28th in 2024. Oregon’s average quarterly rate of business creation (3.2%) trailed both the national average (3.425%) as well as Oregon’s 2023 business-creation rate (3.975%). Complete 2024 data on business closures is not yet available. In the first quarter of the year, however, Oregon had the nation’s 15th highest rate of business closures (4%), which exceeds the national average (3.7%). Oregon’s first-quarter rank represents a slight improvement from its 2023 rank of 13th.
New crime statistics: The Oregon Scorecard has added data on violent and property crime rates as well as historical information going back to 2005. Oregon’s violent crime rate was below the national average in 2024, and its property crime rate exceeded the national average. Between 2023 and 2024, the state’s rates for violent and property crime fell more slowly than the national average.
Occupational licensing: Oregon has the nation’s greatest occupational licensing burden, according to the Archbridge Institute, which has been publishing the State Occupational Licensing Index since 2023. Since then, Oregon’s rank has moved from 10th to 1st.
Why this matters: Oregon needs a healthy private sector to provide jobs, support philanthropic activity and generate revenue for public services. Challenges created by state and local policy, reflected by data and rankings contained in the Oregon Scorecard, threaten all of these benefits. To reverse this trend, policymakers must recognize the problem, stop making it worse and focus on economic development.
OBI, The Partners Group Team Up for Pooled 401(k) Plan
Retirement plan option: OBI has teamed up with The Partners Group to offer OBI members discounted access to The Partners Retirement Plan – an innovative pooled 401(k) solution. A pooled employer plan (PEP) 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. This shared structure is designed to help reduce administrative burden, fiduciary risk and overall plan costs. Through this partnership, OBI members will see even more savings because TPG offers special pricing to OBI members!
Why a PEP makes sense: Oregon law requires employers to offer a retirement savings plan to their employees. Employers can do this through a government-sponsored program (OregonSaves) or through a qualified retirement plan like a 401(k). Many employers are looking for opportunities to reduce costs across their organizations. Many other employers struggle to keep up with the ongoing requirements needed to keep their plans compliant in an ever-changing legislative environment. With The Partners Retirement Plan, the majority of those responsibilities are outsourced to a dedicated team of professionals.
Learn more: Check out a fact sheet about The Partners Retirement Plan here, and contact The Partners Group here. Register here for a webinar with The Partners Group, which will take place on Jan. 22 from 10-10:30 a.m.
Oregon Business Matters Talks with Harry & David’s Ned Ford
In the latest episode of the Oregon Business Matters podcast, host Angela Wilhelms talks with Ned Ford, chief operations officer for Harry & David parent company 1-800-Flowers. Ned oversees Harry & David, which maintains its headquarters – along with an impressive operation – in Medford. With the holiday season just around the corner, Ned and Angela talk about Harry & David’s evolution, the complex logistics behind the company’s Medford operation and, of course, pears.
Oregon Business Matters focuses on insights, issues and initiatives that affect Oregonians’ shared prosperity and the state’s economy.
The Harry & David episode follows a fascinating conversation with Matthew Drake of Mt. Hood Meadows about a significant liability issue facing recreational providers in Oregon, and an episode with our very own Duke Shepard, director of the Manufacturing Council of Oregon, about the important role manufacturing plays in the state’s economy.
Episodes can be found on OBI’s website here and on major podcast platforms, including Apple, Spotify and YouTube.
Policy and Rulemaking Updates
Kicker planned: On Nov. 7, the Oregon Office of Economic Analysis confirmed Oregonians will receive a kicker payment of more than $1.41 billion. The state will return the money through a credit on 2025 state tax returns. Kicker payments are triggered whenever state tax collections exceed projections by at least 2%. At that point, all unanticipated revenue is returned to taxpayers. The mechanism limits government spending while providing relief to individual taxpayers. During the 2025 session, the Legislature considered several bills related to the kicker, including one that would redirect the current kicker payments to the general fund. OBI opposed such bills and, fortunately, none emerged from a legislative committee. To calculate your kicker, check out the calculator available on Revenue Online. To use the calculator, taxpayers will need to enter their name, Social Security number, and filing status for 2024 and 2025. Your kicker will be roughly 9.9% of your 2024 liability. The state retains the corporate kicker to fund education.
Land use discussion: Rep. Thuy Tran, D-Portland, Rep. Susan McLain, D-Hillsboro, and Rep. Sarah Finger McDonald, D-Corvallis, have convened a large and diverse group of stakeholders with interest in Oregon’s land use system to consider modernization of Oregon’s Land Use Goal 1 – Citizen Involvement. HB 2950, introduced during the 2025 session, would have required a process to update the goal, but the bill did not move. (OBI was opposed to the bill as written and moved to neutral once it was amended.) The group has met once to consider how public involvement happens now and the perspectives of the stakeholders about whether, and how, to update this key land use goal. OBI approaches this conversation with a holistic view of the state’s land use system and the interconnected importance of all its goals – particularly Goal 9, Economic Development.
Road user fee: Coming out of the 2025 session work on transportation, and the recently completed special session, OBI is participating in group convened by Rep. McLain to consider further issues related to implementation of the road user charge system for electric vehicles that will be implemented in the coming years. It is unclear at this time if legislation will be necessary or considered related to this topic in the 2026 legislative session.
Economic development legislation: OBI is working with a broad coalition of industry advocates and local governments on possible economic development legislation in 2026 in coordination with Sen. Janine Sollman, D-Hillsboro. Possible components of legislation include elements addressing industrial land supply, capital equipment taxation, incentive modernization and permitting improvements. Other legislators have indicated an interest in introducing economic development-related concepts, and we will know more after this week’s interim committee days, which take place Nov. 17-19.
Health care discussions: During this week’s legislative days, the Senate and House health care committees will be hearing from a panel on hospice regulation and getting an update from the Universal Health Plan Governance Board, on the fiscal implications of federal H.R. 1, and on 2026 health insurance rates and the Cost Growth Target Program and its related penalty structure.
Education topics during legislative days: The House and Senate education committees will receive an update on the rollout of the school cellphone ban, an update on the recently enacted K-12 accountability legislation and a presentation from the Higher Education Coordinating Commission on Oregon’s state attainment goals.
HB 2688 rulemaking: On Dec. 1, the Bureau of Labor and Industries will begin rulemaking advisory committee meetings for HB 2688, which requires prevailing wages to be paid for “bespoke” items fabricated in facilities separate from public works project sites. OBI will serve on the committee, which will meet again on Jan. 20. OBI expects BOLI to file proposed rules in February and adopt final rules in spring 2026. The law will go into effect on July 1, 2026.
Paid Leave Oregon rulemaking: SB 69, which made several changes to Paid Leave Oregon and the Oregon Family Leave Act, transferred rulemaking authority related to job protections for Paid Leave Oregon from the Oregon Employment Department to the Bureau of Labor and Industries. OBI supported the change, which gives BOLI authority over rules related to Paid Leave Oregon provisions it enforces rather than leaving them with a separate agency. BOLI has filed the proposed rules, which are here, and the comment period will remain open until Dec. 26.
SB 916 rulemaking: The hearing for rules implementing SB 916, which makes striking workers eligible for unemployment insurance benefits, will occur Nov. 19 at 1:30 p.m. Click here to register for the Zoom meeting. The comment period closes on Dec. 5. OBI is heavily engaged in the rulemaking for this bill, which has fortunately been narrowed to focus on rules relating to the bill (it was originally much more expansive, including topics well outside SB 916).
Partner Organizations to Know About
Oregon Leadership Summit
Join the Oregon Business Council on Dec. 8 at the Oregon Convention Center for the 23rd annual Oregon Business Plan Leadership Summit: At a Crossroads. The era of automatic growth is over, and Oregon faces tough choices about how to adapt systems built for yesterday’s challenges to meet today’s realities. Yet our history shows we can turn constraints into progress and risk into renewal.
This year’s summit calls business, community and elected leaders to that tradition once more — to face hard truths, spark new ideas and take on Oregon’s top pressures: housing, education, taxes, wildfires and the business climate.
The day runs from 8:30 a.m. to 4:00 p.m., followed by Food Forward 2.0 at the Redd, celebrating Oregon’s world-class food and beverage industry. Register and learn more.
Business & The Environment Conference
The 2025 Business & The Environment Conference and Expo will take place Dec. 9-10 in Portland. The event – the Northwest’s largest environment conference and expo – will feature keynote addresses by Hillary Franz, president and CEO of American Forests, and Emma Pokon, regional administrator for USDA Region 10. It also will feature a panel discussion involving regulators from the Washington State Department of Ecology, Idaho Department of Environmental Quality and Oregon Department of Environmental Quality.
Over its two days, the conference and expo will offer sessions on emerging technology, sustainable systems, the policy landscape, air and water insights and complex contamination.
To learn more about the event and to register, go here.
Notable News
Governor signs bill: With a Nov. 12 deadline approaching, Gov. Tina Kotek announced Nov. 10 she had signed a transportation funding bill that will raise taxes to bolster funding for the maintenance of Oregon’s bridges and road infrastructure (The Oregonian).
ODOT head resigns: Oregon Department of Transportation director Kris Strickler announced on Nov. 12 he will step down at the end of this year, as the agency continues to grapple with cost overruns on major projects and seeks permanent funding for the state’s highways, bridges and maintenance workers (The Oregonian).
Columbia Sportswear transition: Columbia Sportswear on Nov. 12 announced part of its succession plan for longtime Chief Executive Officer Tim Boyle, one of the region’s highest-profile business leaders. The outdoor apparel company named Peter Bragdon and Joseph Boyle co-presidents, effective immediately, signaling that one of the two is likely to become the company’s next top executive (The Oregonian).
Recreational liability: Skiers, snowboarders and tubers at Mount Hood’s Timberline Lodge will see higher costs for certain tickets and passes this winter season. Timberline Lodge said it’s been forced to raise prices because its insurance carrier, Safehold Special Risk, left Oregon earlier this year, calling the carrier’s exit “a casualty of the state’s broken recreational liability system” (Portland Business Journal).
Intel layoffs: Intel Corp. said Nov. 13 it’s laying off 669 more workers in Oregon. The move comes about four months after the company revealed it would lay off nearly 2,400 workers in the state. A previously unreported revision to that round of job cuts, filed on Aug. 25, added another 117 layoffs. The new layoffs bring the 2025 total to 3,178 (Portland Business Journal).
Portland reputation survey: Real estate investors and other industry professionals still prefer nearly any other city to Portland, as efforts to reverse their negative perceptions fall flat, according to a new ULI survey (The Oregonian).
Bend apartment construction: Bend is on track to build 1,000 new apartments in 2025 — the most in the city’s history — as part of a construction wave that has helped flatten skyrocketing rents. But production is set to fall off next year, and economists predict rents will continue to climb (The Bulletin).
Nike retirements: Two Nike veterans announced their departures from the Swoosh recently: its chief innovation officer and global senior director of storytelling communications (Portland Business Journal).
Oregonians’ spending: The free-spending days that followed the pandemic are over. Oregonians’ spending grew by just 5.1% last year, according to recently published data from the U.S. Bureau of Economic Analysis. That’s down sharply from 2021, when consumer spending grew by more than 13% as federal stimulus payments loosened up purse strings — and as inflation drove up the cost of most everything (The Oregonian).
Oregon jobs ranking: Oregon has been ranked one of the worst states to find a job in 2025. A study by personal finance website WalletHub determined the best and worst states for jobs in the U.S. The study used 34 key indicators to find which states had the best and worst job-market strength and economic health (Salem Statesman Journal).
Bend housing project: The Bend City Council voted Nov. 5 to rezone a nearly two-acre parcel of land next to a high school. It’s one of two parcels that Bend-La Pine Schools is selling in order to create housing for its workers (The Bulletin).
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.
- 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.