22. Tillamook County Creamery Association

Oregon Prosperity Council – Input Submission Tillamook County Creamery Association Contact: Trevor Beltz, Manager of Gov. Rel. & Pub. Aff. tbeltz@tillamook.com March 31, 2026 Oregon Prosperity Council Survey Responses Business Climate

What challenge would you like addressed? What is the biggest barrier or friction point? We have three concrete barriers with direct financial or operational consequences for Tillamook and our farmer-owners. Regulatory coherence and the eastern Oregon agricultural economy. Tillamook's Boardman facility is part of an integrated regional system: food processors, port infrastructure, and irrigated farmland that forms the economic backbone of eastern Oregon. Wastewater from processing is treated and applied to farmland, and the port sustains itself through industrial user fees. Thousands of jobs depend on these parts working together. We raise this not to litigate any regulatory decision, but because the Council should understand what is at stake when policies made in isolation by different agencies interact with a system this interconnected. The governor has been clear that retaining businesses and supporting agricultural investment are priorities, which we appreciate. We also think the Council is well- positioned to ask whether the state's regulatory posture is aligned with that goal in practice, not just in stated intent. Farmworker overtime rules that harm the workers they are meant to protect. Oregon's agricultural overtime law creates a counterproductive outcome. Farmers cap worker hours to avoid overtime liability. Workers seeking more hours take them at multiple farms, increasing biosecurity risk and reducing individual earnings. The law was written to protect workers. In practice it limits their earning potential and introduces disease risk to dairy herds. Oregon dropped to a 48-hour threshold in 2025, with a path to 40 hours in 2027. There have been no winners. The Recycling Modernization Act's treatment of federally mandated food packaging. Tillamook is a registered participant in Oregon's EPR program and is paying fees in good

standing. Oregon's program includes ecomodulation, but the structure assumes producers can redesign their packaging to earn credits. For food manufacturers whose packaging is constrained by FDA food safety regulation, that assumption does not hold. DEQ has already denied exemption requests for food-contact packaging, citing that federal regulation does not preclude state compliance. We are not arguing that it does. We are arguing that penalizing packaging decisions made in service of federal food safety requirements is a design flaw the Legislature should correct. The fee methodology also remains confidential, which is not a defensible way to run a public regulatory program. 2. What solution or specific change would you recommend? On regulatory coherence: the Council should include an explicit call for cross-agency alignment on economic development goals, particularly in regions where agricultural economies are most exposed to cumulative regulatory impact. Oregon should be able to articulate a coherent posture toward the businesses it says it wants to retain. On farmworker overtime: raise the agricultural overtime threshold to 55 hours per week. Our farmer-owners identify this as the practical point where workers earn meaningful overtime without triggering artificial hour caps. On the RMA: create a separate fee category for packaging required to meet FDA food safety standards, with a lower base rate and phase-in timeline. Require the Circular Action Alliance to publish its fee methodology and accept independent audit. Establish meaningful ecomodulation credit for companies actively investing in sustainable alternatives, including where those alternatives are not yet deployable at scale. 3. What would success look like in 2-3 years? Oregon operates with a published cross-agency framework for economic development. Regional economies are not left navigating conflicting agency mandates without recourse. The agricultural overtime threshold is adjusted and farmworkers are earning more hours at single operations. The RMA includes a transparent, auditable fee structure with a separate category for food manufacturers with federally mandated packaging. 4. Who has to act?

The Governor's office, to direct cross-agency review of regulatory posture in agricultural regions. The Legislature, to adjust the overtime threshold and reform RMA governance. DEQ and ODA jointly, to develop a published framework on agricultural wastewater jurisdiction. 5. Which existing state programs do you want to see continue? ODA is a strong and collaborative partner and we want to see that relationship and its resources preserved. Oregon's food processor property tax exemption for qualified machinery and equipment is a meaningful tool that directly benefits dairy processing operations and should be maintained. Rural enterprise zones provide property tax relief that makes capital investment in rural communities more viable; Oregon's rural enterprise zones are worth protecting and expanding. These programs work. The gap is not in what exists but in what is missing: a competitive, real-time investment incentive that lets Oregon show up when a capital decision is actually on the table. 6. What promising models or best practices have you seen in other states? When Tillamook began exploring operations in Decatur, Illinois, the regional economic development corporation quickly became a trusted partner and led the effort with a clear philosophy: they would find a way to solve any problem, and they were not going to lose this opportunity. The incentive package they built was custom, designed around our specific priorities rather than a standard offer. When our needs evolved after the initial package was finalized, they modified it. They made sure we were aware of every available incentive at every level of government and helped us navigate all of it. When we needed to create a controlled campus around the facility, they used their local connections to help us acquire surrounding properties, vacated city streets, fenced the perimeter, and razed existing buildings to make it possible. The team committed to monthly calls for more than two years, with a standing mission to remove any obstacle that surfaced. That commitment was tested repeatedly, and they delivered every time. Those calls continue today, having evolved into ongoing collaboration on plant optimization, future capital projects, and master planning. The EDC director remains our single point of contact for everything Decatur, and multiple functions within Tillamook now engage with her directly. That is what it looks like when a state decides it wants to compete for investment. Workforce

What challenge would you like addressed? What is the biggest barrier or friction point? In rural Oregon the primary workforce challenge is a livability gap, not a skills gap. Tillamook County is a documented childcare desert: there are fewer than three regulated childcare slots available for every child who needs one. Housing is equally constrained. When we recruit workers from outside the county, we are asking them to move somewhere they cannot find housing or childcare. For families where both parents work, that is not a livable offer. The problem runs deeper than access. Childcare is among the lowest-paid skilled professions in the country. Finding qualified providers who can sustain a living wage in a rural, high-cost community like Tillamook is its own challenge. Oregon's licensing and certification requirements add cost and credential burden that further limits who enters the profession. Rural childcare often operates at a structural loss indefinitely without subsidy. The market alone will not solve this, and programs designed for the Portland metro do not address why a skilled worker declines a job in Tillamook or Boardman. Separately, we are seeing professional employees choose Vancouver, Washington over Portland in response to Oregon's income tax burden, accumulated local taxes in Multnomah County, and cost of living. Oregon is losing talent at both ends.
What solution or specific change would you recommend? Treat rural childcare infrastructure as an economic development investment, not a social services line item. Solving this in rural Oregon will not look the same as solving it in the Willamette Valley. The state should support flexible, community-designed models rather than imposing urban-scaled licensing frameworks on rural providers. TCCA commissioned a county-wide childcare study and has been engaged in building a plan alongside Adventist Health, Hampton Lumber, and Tillamook Bay Community College. That work identified four interconnected needs: ongoing subsidies to cover the gap between what state ERDC funding pays and what families can actually afford; scholarships for vulnerable families not eligible for other public support; stability grants and business coaching for existing licensed providers to keep them operating; and new program development, including the microcenter model enabled by recent state legislation, which reduces barriers to entry for new childcare entrepreneurs. Workforce development for

childcare workers themselves, including apprenticeship pathways, is also needed to grow the pipeline of qualified providers willing to work in rural communities. In an ideal world, childcare hours would also reflect the reality of manufacturing and frontline worker schedules. Solutions that only work 8 to 5 do not serve our plant workforce, which operates 24/7. On housing: Oregon's prevailing wage law requires contractors to pay area-standard wages on projects that receive public funding — a policy designed to ensure taxpayer dollars support quality jobs. The intent is reasonable. The problem is that BOLI's interpretation of what triggers the requirement has expanded well beyond clearly public projects. When private developers apply for state financing programs to fill funding gaps, the act of accepting that public money now triggers prevailing wage requirements for the entire project, including portions funded entirely with private dollars. In Tillamook County, a 72-unit workforce housing development applied for Middle Income Revolving Loan Fund support to help close a financing gap. That application triggered prevailing wage requirements the developers did not anticipate, adding $2 to $3 million in labor costs and creating a larger funding gap than the one they were trying to solve. The tool meant to help make the project viable made it harder to build. Oregon cannot solve its rural workforce housing shortage while a well- intentioned wage policy functions as an unpredictable tax on the public financing programs designed to spur that housing. Prevailing wage exemptions or alternative compliance pathways for smaller residential projects in rural workforce shortage counties should be part of this Council's recommendations. 3. What would success look like in 2-3 years? Tillamook County has measurable licensed childcare capacity with hours that serve manufacturing and frontline workers. Employers can recruit workers with children without childcare being a disqualifying factor. At least one rural workforce housing project has been completed. The state has adopted an employer-provided childcare tax credit that draws private capital into rural childcare supply. 4. Who has to act? The Legislature, on prevailing wage reform and employer childcare tax credits. The Governor's office, to designate rural childcare as an economic development priority and direct Business Oregon to fund it accordingly. Employers, including Tillamook: we are on county task forces,

have funded a planning study, and will stay engaged. The state should create the structure; the private sector will meet it. 5. Which existing state programs do you want to see continue? Oregon's Employment Related Day Care program provides the baseline childcare subsidy that rural families depend on. The Oregon Shared Services Alliance for childcare, recently extended to Tillamook, Clatsop, and Columbia counties, is a meaningful step toward stabilizing existing providers through business coaching and shared administrative support. Both programs should be preserved and expanded. That said, neither is sufficient on its own to move Tillamook County from a childcare desert to functional capacity. The gap between what these programs provide and what the community needs is precisely what we are asking this Council to help address. 6. What promising models or best practices have you seen in other states? The Yamhill County model is worth noting. A traded-sector manufacturer facing workforce losses due to childcare shortages partnered with the regional EDC, local government, and private funders to create Project Oasis — a 100-slot childcare facility backed by corporate- sponsored employee slots and family scholarships that serve families who fall between public assistance eligibility thresholds. The model was built around employer need, not a government program framework. In Clatsop County, a coalition led by county commissioners and local hospital systems created a grant program to prevent childcare closures, increase slots, and expand family financial assistance. In the first six months, the county saw a 17 percent increase in children served. For context, Clatsop can currently accommodate only 8 percent of its infants and toddlers — a situation directly comparable to Tillamook's. We funded a 2023 county childcare study that pointed toward the same solutions: subsidies to close the gap between what state assistance pays and what care actually costs, scholarships for families who fall through eligibility cracks, stability grants for existing providers, and new program development including the microcenter model. The lesson across all three is consistent: the model works when the funding is there and falls apart when it runs out. Both Yamhill and Clatsop are already chasing grants to replace expiring dollars, which is exactly the problem. These examples demonstrate what is possible

when resources are behind them. The missing piece is not the model. It is the commitment to sustain it. Tools for Growth

What challenge would you like addressed? What is the biggest barrier or friction point? Oregon's economic development tools exist, but they are not built for competitive, real-time investment decisions. The state has rural enterprise zones, property tax abatements, and loan programs — instruments structured for after-the-fact tax relief rather than active deal- making. What Oregon does not have is the ability to make a proactive, custom offer when a capital decision is actually on the table and the conversation is moving at the speed of business. The cost of operating in Oregon is the underlying pressure. It costs Tillamook less to manufacture cheese in another state, package it, and ship it back to Oregon than to make it here. That is a supply chain reality, not a negotiating position. The cost stack that drives it is specific: agricultural overtime rules that are among the most restrictive in the country and scheduled to tighten further; energy costs rising as a result of state carbon policy; CAT costs embedded in every supplier invoice even where Tillamook is exempt as a cooperative; property taxes on business equipment; and a milk supply that has contracted significantly as Oregon farms have closed under financial pressure. These costs compound, and they do so against states that have none of them. This matters not because Tillamook is leaving, but because our farmers are here, our workers are here, and our heritage is here. The question is whether Oregon will be a place where the dairy agricultural ecosystem can sustain and attract investment over the next generation. Can suppliers site here? Can larger farms exist to supply us? Can the next generation of farm families see a viable future in Oregon? Oregon's land use system presents a separate constraint. The Exclusive Farm Use designation applies uniformly regardless of actual productivity or proximity to infrastructure. Routine farm maintenance — a culvert repair, a drainage project — requires sign-off from an alphabet of state and federal agencies because the regulatory framework was not designed to distinguish between irreplaceable farmland and marginal land. TCCA has a formal commitment to no net loss of farmland in Tillamook County and we stand by it. But the

current system does not make that distinction, and that bluntness is costing rural communities the flexibility they need to grow. 2. What solution or specific change would you recommend? Oregon should develop a competitive rural investment incentive with the flexibility and capitalization to function as a real deal-closing tool. Other states have demonstrated that proactive, discretionary cash-based incentives — structured to move at the pace of a business decision and customized to a company's specific priorities — are effective at retaining and recruiting investment. Oregon's existing toolkit is built primarily around tax abatement and loan programs. Those have value, but they are passive instruments. What is missing is the ability to show up at the table with something competitive when the decision is actually being made. On land use: we support the creation of a task force to develop a tiered classification system within the Exclusive Farm Use designation, distinguishing genuinely high-productivity land that must be protected, marginal land that could support rural housing or processing development, and land appropriate for conversion in exchange for conservation of higher- value farmland. This is not a call to open Oregon's farmland. It is a call to apply protection where it matters most and create flexibility where the current system is too blunt to serve rural communities well. 3. What would success look like in 2-3 years? Oregon has a competitive rural investment incentive and has used it to retain or attract at least one significant food or agricultural processing operation that would otherwise have gone elsewhere. The EFU tiered classification task force has produced recommendations the Legislature has acted on. Routine farm permits for low-risk projects move through a single coordinated process rather than requiring sign-off from multiple agencies. 4. Who has to act? The Legislature and Governor's office, to create and capitalize a rural investment incentive. A governor-appointed task force to conduct the EFU tiered classification review with agricultural stakeholders at the table. Business Oregon, to reorient a portion of its rural capacity toward agricultural and food processing sectors rather than concentrating on technology recruitment.

Which existing state programs do you want to see continue? Oregon's rural enterprise zones and property tax abatement programs provide meaningful relief that makes capital investment in rural communities more viable. The food processor property tax exemption for qualified machinery and equipment directly benefits dairy processing operations and should be maintained. These programs are worth protecting. The gap is not that Oregon lacks tools entirely. It is that the existing toolkit is not structured to compete with states that deploy more active, flexible incentives when investment decisions are on the table.
What promising models or best practices have you seen in other states? See the Decatur, Illinois experience described under Business Climate. That experience illustrates the contrast precisely. What made the difference was not the size of an incentive check; it was the posture: a team with a mandate to compete for the investment, the flexibility to build a custom solution around our priorities, and a commitment to stay engaged long after the initial deal was done. Oregon has economic development tools. What the Decatur experience revealed is the gap between having tools and having a posture. That is what this Council should address.

Parent: Appendix E: Submissions & Feedback · PDF: pp. 245-253