Oregon Faces Economic Exodus as Businesses Flee Tax Burdens and Regulatory Hurdles, Report Warns

Thousands of potential jobs and billions of potential private investments have been lost to Oregon in the past five years and the state is poised to lose even more in the next five years, according to a survey by the University of Oregon.

Better Tax Structures is an Incentive to Relocate

The university’s Institute for Policy Research and Engagement School of Planning, Public Policy, and Management, says in a report that a concerning number of businesses indicated they were choosing to relocate because of tax and regulatory burdens, problems associated with attracting and retaining talent, combined with an unfavorable business climate.

Researchers warn that the fact that other states are actively competing to attract businesses and investments away from Oregon could lead to job losses, reduced tax revenues, and slower overall economic growth.

In the report, researchers say the inter-state competition for economic development is a real threat to Oregon’s economy.

Competing strategies create an environment conducive to investment and collaboration, and include incentives and innovation to make their community destination more appealing.

‘Quantifying the degree to which other states are successfully luring businesses or investments away from Oregon, as well as the economic consequences for the state, is crucial for policymakers, state agencies, and local economic development organizations (EDOs) to develop effective strategies to retain and grow business and investment climate.’

Respondents to the survey cited California, Texas, and Washington as popular relocation states because of an attractive tax structure, and fewer policies and regulations to engender a favorable business climate.

‘Pull’ Factors to Keep Businesses in Oregon

To counter business attraction efforts, EDOs, and local and state government agencies must implement business retention and expansion (BRE) programs to keep existing businesses in Oregon and to help them thrive.

‘Pull’ Factors, according to the report, to retain businesses within the state include tax incentives, the availability of infrastructure and land, a business-friendly climate, workforce support, an effective economic development ecosystem and programs, business relocation, and ongoing support.

Researchers point out that other states have highly sophisticated marketing programs that quickly turn leads into robust incentive packages.

Although Oregon has established various economic development incentives, few focus on business retention.

Researchers say that providing Business Oregon and EDOs with a more robust toolbox will help retain jobs and investment, and support the state’s goal of ‘prosperity for all Oregonians.’

Oregon businesses and industry will use the information contained in the report to develop a defensive strategy.