Statewide burden on business threatens manufacturing

Continued Statewide Burden on Businesses Jeopardize Economic Health for These and Other Employers

By Karen Vineyard, chair,
Oregon Business and Industry

As we wind down summer and continue down a somewhat uncertain path of recovery from the global pandemic, our team at OBI continues to find opportunities to not only advocate for, but to celebrate the industries, companies, and individuals that have kept our state strong during these trying times.

So, it seems fitting that tomorrow, Oct. 1, we will celebrate Manufacturing Day, which is an opportunity for appreciation of and reflection on one of the largest and most impactful industries in our state. Oregon isn’t always thought of as a manufacturing state, yet over 21% of Oregon’s gross state product is in manufacturing and manufactured goods accounted for almost 92% of Oregon’s total goods exports in 2019. You may not know this, but our top manufacturing sector by far is computer and electronic products, followed by food and beverage products, wood products, and machinery.

Manufacturing is also one of the largest providers of family wage jobs, employing over 200,000 Oregonians statewide with average annual compensation of approximately $80,000. And while most of us think of large corporations when we think of manufacturing, many of Oregon’s more than 5,000 manufacturing companies are small businesses with 20 or fewer employees.

The state should be doing what it can to support these businesses. Yet, the business climate in Oregon, particularly the tax structure, continues to threaten not only our thriving manufacturing industry, but the stability of all business operations – and jobs – throughout the state.

Earlier, our team at OBI released a survey of nearly 500 business CPAs and local chamber of commerce leaders. It found that:

Over 80% of responding Oregon accountants and chamber leaders have business clients or members considering relocation due to taxes.

Of those businesses considering relocation, most are considering making investments in other states or shifting production to another state. Some are even considering closing all operations in Oregon.

More than 85% of accountants also have individual clients who are considering leaving Oregon due to personal income tax burdens.

The taxes causing the most concern among businesses and individuals are the Corporate Activity Tax (CAT), the Multnomah County Individual Income (Preschool for All) Tax, and the Metro Income (Homeless Services) Tax.
These findings are troubling for not only business interests, but also for families, employees, and job seekers—if Oregon’s economy falters, the quality of life for everyone goes down. Businesses that could relocate to a more business-friendly state, are seriously considering uprooting, taking with them family wage jobs.

We are proud of Oregon’s recovery from the COVID-19 pandemic, significant natural disasters, and other challenges we have faced in recent years. At this juncture, it is imperative that the business community rally together to advocate for all industries and to work together to fight the continued, onerous regulatory and tax burdens placed on employers. The potential flight of jobs and investments is a risk Oregonians cannot afford, but it is one that will become a reality if more balance is not restored to how policy-makers approach business and industry.

As we celebrate manufacturers tomorrow – and all Oregon businesses every day – I encourage you to remain involved in these important conversations. Thank you for all that you do for Oregonians and our state. OBI is proud to represent you and is proud to work to ensure Oregon remains a welcoming place for employers for years to come.

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