Jan. 20, 2025
In 2023, Gov. Tina Kotek convened a task force to revive Portland, where conditions had deteriorated during the COVID pandemic for residents, businesses and visitors. This month, the Central City Task Force’s tax advisory group released a report that links policy choices – and particularly tax choices – with undesirable consequences.
The report contains plenty of useful information for leaders in the Portland metropolitan area, of course. But Oregon legislators should consider the report’s lessons as well. What has happened in Portland could well happen statewide.
Over the past decade and a half, the report notes, lawmakers and voters have enacted at least 20 major tax measures that affect households and businesses in Portland. As OBI’s own research has shown, Portland now has the second highest marginal income tax rate in the nation. And between 2019 and 2023, local taxes on Portland businesses have increased 82%.
Despite soaring taxes, rising personnel costs are creating budget problems for Portland and Multnomah County. In other words, public officials are spending even more than they’re taking in. Budget crises loom.
Presumably in response to taxes and related conditions, Multnomah County has seen an outmigration of higher-income people over the last several years (see top right graph. Click for larger image). And over roughly the same period, the county’s rate of job growth has become a regional laggard (see bottom right graph. Click for larger image).
The lesson for local and state policymakers is clear. People and business investment migrate to cities and states that welcome them by creating favorable conditions. Those places will benefit from the creativity, energy and tax revenue new residents and employers bring with them. The places they leave will not.
OBI’s Oregon Competitiveness Agenda offers many suggestions to enhance Oregon’s economic climate and slow the migration of residents and business investment to other states.
Wages and Migration
Job Growth
