By Katy Brooks, CEO
This article first appeared in The Bulletin on February 5, 2023
Doing business in Oregon isn’t easy — and it’s not cheap.
The cost and complexity of operating here have risen significantly in recent years. Although Oregon and Bend have fantastic natural resources and lifestyle perks to offer businesses and their employees, employers need to make ends meet to stay and invest here.
During the past several years, Oregon businesses have weathered a pandemic, new regulations, the rising cost of living, a continued housing shortage and a tightening labor market. Add to that an increase of almost 45% in the state’s business tax burden since 2019, according to national accounting firm Ernst & Young. Oregon needs thriving businesses to generate jobs, tax revenue and prosperity. But for them to succeed, the state needs to tap the brakes on business taxes and accelerate efforts to support employers and their employees.
As the 2023 Legislature begins its work, it is critical that lawmakers focus on the things that make businesses and their employees stable. They need to make Oregon a more attractive place to do business and employ people. To this end, Oregon Business & Industry (OBI) has developed a Growth and Innovation Roadmap that offers more than three dozen recommendations, from incentivizing research and development to boosting the supply of residential land.
“From a competitiveness standpoint, Oregon is at an inflection point,” said OBI President and CEO Angela Wilhelms. “Unless state leaders address policies that have eroded our business climate in recent years, the investment and innovation we want and need here increasingly will happen elsewhere.”
OBI’s plan recognizes that Oregon’s anticompetitive tax structure and its indifference to economic development cost the state both business investment and the jobs and lasting tax revenue that come with it. Fortunately, both state and private sector partners recognize the need to leverage federal funds to grow the state’s semiconductor industry. But a research and development tax credit and similar tools needed to attract semiconductor investment must be available to all industries, including manufacturers in Bend and Redmond that make a wide variety of products.
Central Oregon also needs to see real progress made on critical investments, such as broadband infrastructure and access; post-secondary education efforts like workforce development and the OSU-Cascades Innovation District; myriad transportation infrastructure projects; and forest management and wildfire mitigation.
Land availability is another significant challenge, and it affects both industrial and residential development.
OBI proposes site-readiness programs, tax incentives for middle market housing and a task force on land use reform that will make recommendations to the Legislature for meaningful long-term solutions.
In Central Oregon, land has become even more scarce, and newly incorporated buildable lands are exorbitantly expensive to develop. To that point, a collaboration of public and private sector interests formed a collaborative legislative agenda seeking to increase the supply of land for workforce housing, find funding for infrastructure and reduce barriers to build.
Oregon’s regulatory climate must be improved as well. It’s difficult for businesses, especially small businesses, to navigate a regulatory landscape that is both complex and rapidly changing. In the past year alone, state agencies have adopted administrative rules affecting urban planning and development, employee commute options, emission-free vehicles, employee benefits and more.
To improve the state’s regulatory climate, OBI’s roadmap proposes to make rulemaking more “customer-focused.” Regulatory agencies should develop rules transparently and consistently and adopt them only after considering their full economic impact. Meanwhile, employers seeking to comply with complicated rules need a dedicated state office to approach for answers and guidance.
Oregon’s persistent labor shortage also makes running a business difficult. In addition to increasing the supply of housing, insufficient access to child care has been a growing problem for years, preventing many would-be employees from entering the workforce.
To address it, OBI emphasizes the need to examine best practices from other states, including incentives and streamlined processes for cost-sharing, expanding access, and building and renovating facilities.
Simultaneously, the state should enhance workforce readiness to address the child care provider shortage that is prevalent throughout the state, including Central Oregon.
When the Legislature wraps up in June, we hope it has supported critical bills that will allow businesses to innovate and thrive.
Our competitiveness and the health and future of our state depend on it.