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Oregon Drops to 35th in State Tax Competitiveness Index

What happened: Oregon has fallen two places in the nonpartisan Tax Foundation’s State Tax Competitiveness Index, dropping from 33rd to 35th, the state’s lowest ranking in the widely followed index in at least 20 years. Oregon has fallen an astounding 28 places since 2019, when the state ranked 7th (click here for more).

Worrisome trend: Earlier this year, Oregon plummeted 11 places in CNBC’s America’s Top States for Business rankings, falling from 28th place to 39th. Oregon’s overall score in that index is its lowest in the history of CNBC’s rankings and a stunning 22 places lower than its 17th-place ranking in 2017.

Inside the rankings: In addition to an overall score, the Tax Foundation ranks each state in five 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).

What the Tax Foundation said: “For the second year in a row,” the Tax Foundation wrote, “Oregon’s rank dropped due to competitive reforms in other states as Oregon stood still.” The organization also warned about the possibility of self-imposed damage. “At the time of publication,” it wrote, “Oregon lawmakers were considering changes in conformity to the federal Internal Revenue Code that could further harm the state’s tax competitiveness in future years.”

Other warning signs: This year’s State Tax Competitiveness Index is the latest of many warning signs state policymakers can no longer afford to dismiss. Others include:

Why it matters: Oregon’s business climate is chasing away investment, and that means fewer good jobs for Oregonians, less philanthropic support for Oregon’s communities and less revenue for public services.

Urgent action needed: To reverse this trend, policymakers must first recognize the problem. They must then resolve to stop making it worse and, crucially, make economic development a top priority. OBI’s Oregon Competitiveness Agenda offers many concrete proposals for improvement.

Learn more: Visit OBI’s Oregon Scorecard website for more competitiveness-related rankings and statistics, including Oregon’s performance over time.

Vision Oregon Celebrated Entrepreneurs, Visionaries

What happened: OBI’s annual Vision Oregon Event, which took place Oct. 22, was a celebration of entrepreneurialism. The event featured a keynote address by Oregon Entrepreneurs Network President and Executive Director Cara Turano, a panel discussion involving a trio of state entrepreneurs, and the recognition of three Oregon businesses that have demonstrated the power of entrepreneurialism to create jobs and prosperity while manufacturing exceptionally cool products.

Oregon entrepreneurialism – a tale of two states: Cara Turano’s keynote address highlighted Oregon’s place as a top state for entrepreneurs (fourth!), noting some relative strengths, including the ease of starting a business, its welcoming environment for black and female entrepreneurs and its success in generating patents. According to the National Science Foundation, Oregon is fourth nationally in the number of patents awarded per 1,000 people in science and engineering occupations. However, Turano also noted that Oregon has much less success in seeing those businesses survive past three years. She noted challenges such as the state’s high tax and regulatory burdens, the cost of starting a business, the exodus of high-wealth people and the lack of later-stage capital, all of which contribute to the comparatively low three-year startup survival rate. You can view Cara’s presentation slides here.

A first-hand look: Following her address, Cara, who has maintained an active career within start-ups herself, moderated a panel discussion involving a trio of Oregon entrepreneurs, Greg Davis of Overwatch Imaging, Jonathan Hurst of Agility Robotics and Pallavi Pande of Dtocs. The four discussed the overall ecosystem surrounding entrepreneurs, including the importance of industry clusters and community, workforce needs and challenges, the role of support from government and other companies, and more. Kudos to all three of these entrepreneurs for their vision, perseverance, success and commitment to Oregon.

Oregon visionaries: OBI presented two Oregon Visionary Awards. Portland-based Daimler Truck North America, a longtime industry leader in technological innovation and efficiency improvement, has produced vehicles in Oregon since the 1940s and employs more than 3,000 people here. Founded in White City more than 35 years ago, NIC Industries produces industry-leading coatings that are distributed and sold in more than 90 countries. It employs more than 250 people at its facility in southern Oregon. To learn more, check out OBI’s videos on Daimler Truck North America (here) and NIC Industries (here).

Coolest product: Vision Oregon concluded with the announcement that Bullseye Glass has won this year’s Coolest Thing Made in Oregon contest (see below), topping runner-up Daimler Truck North America’s Western Star X-Series line of heavy-duty trucks.

Thanks and congratulations: OBI would like to thank everyone who contributed to Vision Oregon, including sponsors, participants and panelists, for helping to create a memorable event. OBI also would like to congratulate the businesses recognized this year as visionaries and as producers of cool products.

Bullseye Glass Wins Coolest Thing Made in Oregon Contest

Coolest Thing 2025: The coolest thing made in Oregon in 2025 is Bullseye Glass’ art glass. For more than 50 years, Bullseye Glass has manufactured colored glass for artists around the world at its facility in Portland. Bullseye Glass’ art glass topped Daimler Truck North America’s Western Star X-Series line of heavy-duty trucks to succeed last year’s winner, Epic Aircraft’s E1000 GX turboprop, as the Beaver State’s coolest manufactured product.

Contest in review: Presented in partnership with Here is Oregon, this year’s Coolest Thing Made in Oregon contest began in May. For three months, Oregonians nominated scores of Oregon-made products. A panel then chose 16 finalists, and in September Oregonians began to vote in a bracket-style contest that steadily narrowed the field until only one product remained.

This year’s finalists: Congratulations to all 16 of this year’s finalists:

Republican Legislator Christine Drazan to Run for Governor

Republican legislator Christine Drazan announced Oct. 27 that she will run for governor in 2026, joining a field that will include at least 11 candidates who had registered as of Friday, Oct. 31. Gov. Tina Kotek is expected to seek re-election as well, though she has not yet announced that she will.

In 2022, Drazan ran against Kotek in a race that included independent candidate and former legislator Betsy Johnson. Kotek received 47% of votes cast for governor while Drazan received 43.5% and Johnson 8.6%. Other candidates split the remainder.

Drazan was re-elected to the state House in 2024 and served as the chamber’s minority leader. She was sworn in to a vacant Senate seat on Oct. 26. She previously represented Canby in the House from 2019 to 2022.

Eleven other candidates have filed for the 2026 gubernatorial primary election thus far.

New Podcast Interviews Focus on Manufacturing, Ski Industry

OBI’s Oregon Business Matters podcast has released two episodes since the last edition of Capitol Connect:

Oregon ski industry: In an episode released today, Angela talks with Matthew Drake, CEO of Mt. Hood Meadows, Oregon’s second largest ski resort. Topics covered include dealing with uncertain weather, running an independently owned ski resort and the risk to ski areas throughout the state created by Oregon’s unusual liability law relating to recreational uses. You can listen to that episode here.

Oregon manufacturing: In an episode released Oct. 23, host Angela Wilhelms talks with OBI Senior Policy Director Duke Shepard, who staffs OBI’s Manufacturing Council of Oregon and took part in last month’s Manufacturing & Innovation Roadshow. Duke and Angela discuss the condition of manufacturing in Oregon as well as the businesses the roadshow visited. You can listen to that episode here.

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.

Recordings Available for Two Recent HR 1 Webinars

Recordings of two recent OBI webinars focusing on HR 1, also known as the One Big Beautiful Bill Act, are now available.

Tax Changes Employers Should Know: HR 1 has made many changes to the federal tax code that will be of interest to Oregon employers. Experts from Perkins & Co joined OBI to discuss these and how they’ll affect Oregon businesses. You can watch the webinar here and view the slide deck used by Perkins & Co here.

HR1 and Employer Obligations: HR 1 also made more than a few changes that will affect Oregon workplaces. These touch on a range of benefits, including health savings accounts, flexible spending accounts and various fringe benefits. Barran Liebman LLP attorney Iris Tilley joined OBI to discuss these. You can watch the webinar here and view Iris’ slide deck here.

Policy and Rulemaking Updates

State lands EO: On Oct. 23, Gov. Kotek’s office announced an executive order, EO 25-26, to “increase the pace and scale of adoption of climate resilient strategies into existing state programs to deliver benefits for communities and ecosystems.” The EO directs agencies to (i) “define key resilience attributes for land and waters”, (ii) “keep Oregon’s working lands and waters working”, (iii) “conserve natural lands and waters to act as resilience anchors in the face of climate change impacts”, (iv) “lead by example” and (v) “ensure a livable Oregon.” The third item directs agencies to “conserve, connect or restore ten percent of lands and waters in Oregon in ten years.” The EO is light on detail, and it is not clear how it will affect rulemaking or management of working state lands. OBI will monitor this and talk with key industry association partners.

Cleaner Air Oregon: The Department of Environmental Quality will kick off rulemaking in January to either add new or change the toxicity reference values for more than 300 chemicals regulated under the Cleaner Air Oregon program. Regulations will become significantly more stringent for most chemicals. It is worrisome that the data supporting changes to the toxicity reference values have proven to be weak or inaccurate in several cases. Read OBI’s letter raising this concern to DEQ here. OBI’s Sharla Moffett will serve on the rules advisory committee.

Transportation bill signing: The governor has not yet signed HB 3991, the transportation bill passed during the unexpectedly long special session. Any effort to refer that bill – or portions of the bill – to voters remains on hold until she signs or a designated period ends. As detailed in this article by OPB, there is a 90-day clock for signature collection from the time session adjourns, but signatures cannot actually be collected until the governor signs the bill. She has 30 days (excluding weekends) to do so when it arrives at her desk. The signature effort will need to collect 78,116 valid signatures in whatever period remains within the 90-day clock.

Possible 2026 tax hikes: The Oregon Legislature is unwisely studying options to raise taxes on Oregonians – potentially by billions – during 2026 session. Following through would double down on policies that have taken Oregon’s general tax competitiveness from 7th in 2019 to its current ranking of 35th and that have increased Oregon’s effective business tax burden 33% between 2019-2023. After defeating federal disconnection (HB 2092) in 2025, OBI anticipated disconnection would be a topic for 2026. Tax increases might not stop there, however. According to information OBI has received, the Legislature is studying the elimination or modification of the home mortgage interest deduction, other itemized deductions and several other tax preferences meant to spur economic growth and development. The Legislature would raise approximately $3 billion for the 2026 tax year alone if it enacted all the changes on a list put together by the Legislative Revenue Office. OBI and allied groups will continue to push for spending restraint.

HB 2688 rulemaking: The Bureau of Labor and Industries has begun outreach to implement HB 2688, which requires prevailing wages to be paid for “bespoke” items fabricated in facilities separate from public works project sites. The agency recently held “listening sessions” to hear from a variety of stakeholders. The top request by participants was for BOLI to define “bespoke.” The agency also received many requests for rule clarification. For example, Gov. Kotek has said the law does not apply to housing, but BOLI would have to make that determination in the rules as the bill is not clear on that point. Additionally, some legislators have stated that the law does not apply to ODOT, but the bill contains no such exemption. Several manufacturers wondered how they would manage work assignments and pay when some work would be covered by the new law and some would not. The agency will continue to accept initial feedback through this form until Nov. 7. The rulemaking advisory committee will begin on Dec. 1 and continue through January. BOLI plans to file proposed rules in February 2026 and adopt final rules in the spring. Final rules must be adopted by July 1, when most of the law becomes operational.

SB 916 rulemaking: OBI and partner organizations have convinced the Oregon Employment Department to scale back proposed changes to unemployment insurance rules. The rulemaking process was prompted by SB 916, which makes striking workers eligible for UI benefits. Initially, OED had proposed to make drastic changes related to eligibility, in addition to rules implementing SB 916, such as removing ineligibility for incarceration, allowing UI claimants to be absent from the labor market for extended periods, eliminating time limits for when some workers could collect UI without looking for a job, and allowing claimants to search only for remote jobs. These proposed changes were alarming to employers, particularly as they were unrelated to SB 916 or other legislation. OED has now filed the proposed rules and is proposing very narrow technical changes and a rule allowing striking workers to collect UI without having to look for work if they expect to return to work when a strike is resolved. OBI believes such a rule violates the Social Security Act and expect that U.S. Department of Labor will reach that conclusion. The rulemaking hearing is scheduled for Nov. 19 at 1:30 p.m. via Zoom. The last day to submit written comments is Dec. 5.

Proposed health taxes: On Oct. 16, the Universal Health Plan Governance Board met to review the Draft Status Report on the Work of the Universal Health Plan Governance Board, which the board must provide to the Legislature in December. In considering revenue generation mechanisms, the board left no stone unturned. Taxes under consideration include new personal income taxes, corporate income taxes, corporate activity taxes and payroll taxes. Taxes aside, OBI questions the feasibility of a single-payer system, especially one that operates in a single state.

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

Hops Stadium: The Hillsboro Hops are in the home stretch of completing their new $150 million ballpark. President and General Manager KL Wombacher wants fans to consider the soon-to-be-finished facility, built right next to the team’s current Hillsboro Ballpark, as more than just a venue where minor league baseball is played (Portland Business Journal).

PacificSource layoffs: PacificSource, a health insurer based in Springfield, is reducing its workforce by 300 positions, according to a layoff notice it filed in late October. The reason for the layoffs is a “significant loss of Medicaid membership in Lane County,” the notice says (Portland Business Journal).

I-5 bridge departure: Amid an already tumultuous time for the Interstate Bridge Replacement project to build a new river crossing between Oregon and Washington, the organization’s administrator said he will leave at the end of the year. Greg Johnson, a 40-year transportation industry veteran who moved to Oregon in 2020 from Michigan to lead the replacement effort, said that his decision to leave the project was “purely personal” (Portland Business Journal).

Wells Fargo layoffs: Wells Fargo plans to lay off another 444 workers in Hillsboro and Salem on Dec. 26, the day after Christmas. With the latest cuts, announced Oct. 28, Wells Fargo will have laid off more than 1,200 Oregon employees since last December (The Oregonian).

OHSU strike: About 700 nurse practitioners, physician associates and nurse midwives at Oregon Health & Science University have voted by a wide margin to authorize a strike. The workers, known collectively as advanced practice providers, are newly represented by the Oregon Nurses Association (The Oregonian).

SNAP funds: Gov. Tina Kotek announced she’s sending $5 million in state funding to food banks on Nov. 5 as Oregon braces for a cutoff of the Supplemental Nutrition Assistance Program expected at the start of November (Oregon Public Broadcasting).

PacWest Center: Another downtown office building has sold—and at a better price per square foot than what the U.S. Bancorp Tower fetched at a fire sale in July. PacWest Center, an aluminum-clad, 30-story tower at Southwest 5th Avenue and Madison Street, sold for $55.7 million, or $102 per square foot, according to an email describing the sale that was obtained by WW. U.S. Bancorp Tower, aka Big Pink, sold for $45 million, or about $40 a square foot on July 3, a sale that has wreaked havoc on downtown tax receipts (Willamette Week).

Bend gas fee: A report from city of Bend staff showed it may be 60% to 80% more expensive over the next 10 years to use electric appliances in new homes as opposed to natural gas — but advocates say the cost of climate change is far worse. The Bend City Council is considering a fee for developers who build homes with natural gas appliances instead of electric, as part of a push to reduce greenhouse gas emissions and do the city’s part to curb climate impacts (The Bulletin).

Bend trees: Bend homebuilders are urging the city to remove juniper trees from its list of protected species under the city’s tree code, reasoning that keeping junipers will increase the cost of new homes while continuing negative environmental impacts (The Bulletin).

Salem property taxes: Many property owners in Salem are in for a shock when they see the 8% increase on their property tax bills this year. That’s because voters in May passed a 97 cent per $1,000 of assessed value local operating levy to pay for library and park services (Salem Statesman Journal).

Payroll tax delayed: The board of Cherriots decided Oct. 23 to form a committee that includes members of the business community and delay implementation of a payroll tax on businesses in Salem and Keizer (Salem Statesman Journal).

Boat startup leaves: An electric boat manufacturing startup founded in Beaverton announced on Oct. 27 that it closed a $3 million pre-seed funding round, but its future lies in Michigan. Voltaic credited support from, among others, the Michigan Economic Development Corp. and Michigan Small Business Development Center. Indeed, Michigan has stepped up, and Voltaic has relocated there (Portland Business Journal).

Alaska adds routes: Alaska Airlines will start daily flights from Portland to four new U.S. destinations, starting next spring. The carrier will offer daily routes from PDX to Idaho Falls, Idaho, St. Louis, Philadelphia and Baltimore starting May 13 (Portland Business Journal).

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.