Panel warns Oregon faces competitiveness and permitting challenges; manufacturing and downtown Portland cited as priorities

After committee hearings on two bills, the House Committee on Economic Development, Small Business and Trade held an informational meeting with business groups and local business owners.

Representatives of Oregon Business and Industry (OBI) told the committee that Oregon’s manufacturing sector has lagged recovery and that the state must act to improve competitiveness and permitting. “The number 1 complaint that we hear is the regulatory environment,” Duke Shepherd of OBI said, and Paloma Sparks said Oregon’s competitiveness ranking slipped in recent national lists, with notable declines in the cost of doing business and business friendliness.

OBI urged legislation and administrative reforms to reduce uncertainty, clear permitting backlogs, and improve incentives for traded‑sector employers. Sparks said the organization had submitted a “Competitiveness Agenda” with recommendations and asked legislators to review it.

Vanessa Sturgeon, a Portland developer and Oregon Business Council representative, described a downtown office crisis and urged state action to protect revenue streams that rely on property and income taxes. She cited high office vacancy rates and steep valuation declines for some properties, saying dramatic drops in assessed values could affect budgets for schools, public safety and other services. Sturgeon recommended incentives and programs to convert vacant offices to other uses and urged work on public safety, mental‑health capacity and streamlining certification for new treatment facilities.

Marsha Walker, director of Oregon State University’s Food Innovation Center, described supply‑chain and co‑manufacturing gaps that push some food and beverage start‑ups out of state after product development, and asked for state attention to manufacturing infrastructure and workforce training for small food producers.

Speakers from Josephine County and small business owners emphasized the costs of doing business for rural firms, the impact of the corporate activity tax on local operators, access to capital, fair contracting and payment terms, and the importance of tourism and lodging tax allocations to regional economies.

Committee members asked detailed questions about regulatory churn, permitting backlogs and the possibility of executive‑level action; OBI said it had sent a letter to the governor asking for prioritization of permitting improvements and that agency hiring alone had not solved the permitting delays. The panelists urged coordinated legislative and administrative work to improve permitting, workforce training, housing and crime and behavioral‑health responses to stabilize downtowns and support employers.

The meeting closed with the committee agreeing to continue parts of the conversation on future agendas; no votes were taken in the informational segment.