Dec. 2, 2025
Earlier today, Gov. Kotek held an event at Lam Research’s facility in Tualatin to release her roadmap for prosperity. OBI appreciates the measures Gov. Kotek is taking to support Oregon’s private sector. These are important first steps in arresting the accelerating erosion of Oregon’s business climate, a trend to which the OBI Board of Directors responded in November by approving a resolution declaring that Oregon is in a state of economic emergency.
The OBI team stands ready to work with the governor, her office and other executive branch leaders, and with lawmakers from all corners of the state, to chart a new course.
The thousands of businesses that make up the state’s private sector employ nearly 1.7 million Oregonians, generate the tax revenue that sustains public services and support nonprofits and communities through philanthropic activity. Yet, as OBI has warned for years, Oregon’s business climate – and therefore its competitiveness relative to other states – has become steadily less welcoming.
The result of tax and regulatory policies as well as the reluctance of legislators and administrators to heed the warnings of business leaders, Oregon’s competitive decline has accelerated. In 2025, Oregon dropped a stunning 11 places – to 39th – in CNBC’s annual America’s Top States for Business ranking. The state’s rank for business friendliness was a nearly rock-bottom 47th. This fall, Oregon dropped to 35th in the Tax Foundation’s State Tax Competitiveness Index. In 2019, only six years ago, Oregon ranked 7th, a change that coincides with a 33% increase in the state’s total effective business tax burden.
As Oregon has become less competitive, economic growth has slowed and now lags the national average by a significant margin. The state’ s population has stagnated as employees seek better options and greater affordability elsewhere. And business recruitment efforts by other states have experienced what an economist with the state’s economic development agency calls “an insane success rate.”
Today’s announcement is a recognition that Oregon has a problem. That recognition is the first of the three steps called for in the OBI board’s economic emergency resolution. OBI urges the governor and other state leaders to take the necessary second and third steps: Do no more harm and prioritize economic development.
The second and third steps will be more difficult than the first, but no less critical. To do no more harm, elected officials must say “no” to new or increased taxes, harmful and burdensome regulations and other policies that erode the state’s business climate and increase costs unnecessarily. Recent examples include legislation that makes striking workers eligible for unemployment insurance benefits (SB 916), applies the prevailing wage to manufacturing (HB 2688) and makes contractors responsible for the behavior of subcontractors (SB 426). Examples also include executive orders mandating project labor agreements and increasing energy costs, which can be rescinded by the governor.
Restoring Oregon’s economic competitiveness will require sustained political will and take time. It will not be easy, but it is necessary. Gov. Kotek deserves credit for acknowledging the need for change and for engaging some of Oregon’s thoughtful business leaders in the work. We urge her and other elected leaders to listen to them, and to the broader business community, as they stop exacerbating the problem and instead pursue the policies needed to reverse Oregon’s slide.