Tim Knopp, Chief Prosperity Officer
Office of Governor Tina Kotek
900 Court Street, Suite 254
Salem, OR 97301
RE: Salem Chamber Comments for Governor’s Prosperity Council
Dear Chief Prosperity Officer, Tim Knopp, and the Governor’s Prosperity Council,
Our organization represents over one thousand (1,000+) local businesses and their forty-five thousand (45,000) employees in the Salem area. The breadth and diversity of industries represented by our membership demonstrate an intersection of the small businesses that collectively create our state economy. The Salem Chamber supports a healthy business climate necessary for the prosperity of our citizens that contributes to the success of our state government.
Businesses in Oregon face many challenges, here are three threats to economic growth; taxes, regulation, and a social stigma that business owners are selfseeking to the detriment of others.
In 2004, Oregon’s overall tax burden was ranked 42nd in the nation. Today, Oregon is ranked 17th in overall tax burden making us one of the highest tax burden states in the country. According to the Oregon Legislative Revenue Office “2025 Public Finance: Basic Facts”, we’re 11th in general revenue per person, meaning that Oregon citizens pay more in taxes than 39 other states, and our personal income tax, the 6th highest in the nation, serves as the primary state revenue engine. Oregon is in the top 20 for Corporate Income Tax Burden, and the Corporate Activity Tax, considered the “hidden sales tax”, is making Oregon companies decide whether to relocate outside the state should their gross revenue exceed $1 million. The business community knows that when taxes and fees are increased, hiring, investment, and business expansion are decreased.
Oregon businesses face a myriad of complex regulatory challenges. This is extremely difficult for our small businesses attempting to navigate and comply with the ever-changing regulatory environment. The Oregon Business & Industry Research and Education Foundation in their Oregon Regulatory Impact Analysis stated that as of 2023, Oregon was the 7th most heavily regulated state in the nation. Additionally, a 10% increase in regulations correlates to 0.5% fewer businesses, a decline of 0.6% in employment opportunities (approximately 2.58 fewer jobs for a small to mid-size business) and a decrease in start-ups of 7%. Lastly, it leads to a 1 % increase in consumer prices, which disproportionately harms our lowest-income Oregonians.
Currently, Oregon has 224,000 state-imposed regulatory restrictions, which have increased by 5.6% between 2022-2023. Many of these regulations are duplicative or unduly burdensome.
Something that would help is the establishment of a centralized rulemaking and regulatory website, like OLIS. This would provide small businesses with better access and engagement in the regulatory process, promoting more collaborative discussions resulting in regulatory solutions that could cooperatively address both agency and small business concerns. Unlike larger companies, our small businesses often don’t have in-house counsel or government affairs personnel dedicated to representing them in the rulemaking process.
Lastly, according to the CNBC Annual Top States for Business Ranking 2025, Oregon ranks 47th in business friendliness. Only California, New York, and New Jersey are ranked less friendly. Our state economy was ranked 4Pt, the cost of doing business was 43rd, and our cost of living was ranked 45th. For these reasons, Oregon is experiencing taxpayer migration and business exodus.
The stigma that businesses don’t pay their fair share or seek to avoid regulations to protect profit undermines the business community that provides employment opportunities, financially supports our local charities, and provides a solid tax base for state and local government. When businesses feel like agencies are acting adversarial, it’s not just frustrating but short sighted as our businesses are tasked with generating a revenue stream through business taxes, fees, and providing income for Oregonians. Furthermore, business unfriendliness often permeates our policy discussions.
When businesses provide their expert opinion on policies, it’s often dismissed with statements made to invalidate their concerns. For instance, the Climate Protection Program will create the most expensive greenhouse gas emission regulatory program in the nation, and place Oregon at a disadvantage to our neighbors in California and Washington. By removing the price of carbon determined by the carbon market, DEQ will establish the price. Under the CCP, Oregon will pay $129 per ton, while our neighbors pay between $31-$60. This disproportionately affects Oregon’s energy costs harming business operations and increasing consumer prices. The response to these concerns, was “[t]he business community always says [climate policy] will put us at a disadvantage,” says Carra Sahler, director of the Green Energy Institute at Lewis & Clark Law School. “They just don’t like being regulated.” This type of communication seen in a Willamette Week article devalues dialogue and incentivizes companies to consider opportunities outside of Oregon.
Oregon is in competition with forty-nine states to locate and operate a business. We know that Arizona, Texas, Idaho, Ohio, Florida, and North Carolina are some of the states actively recruiting Oregon businesses to relocate. All efforts to make Oregon more competitive will encourage job creation and promote prosperity for our citizenry and state. We’re hopeful that the Governor’s Prosperity Council will work to keep Oregon as a viable option to locate a business, find a good wage job, or even start a small business.
Thank you for your consideration,
Tom Hoffert, CEO, Salem Chamber
