Oregon has long been a popular destination for workers who live elsewhere.
That’s largely because Portland sits on the border with Washington, an urban center directly adjacent to suburban Clark County. Of the 120,000 people who commute to Oregon jobs from other states, three-quarters come from Washington.
Oregon ranks No. 4 in the nation in terms of earnings paid to workers who live in other states, according to an analysis by the Oregon Employment Department. That’s been a marker of economic strength in prior years, a sign of a robust job market.
Not anymore. The number of out-of-state workers in Oregon has declined since the pandemic, falling by about 3% through 2023.
The drop has been especially severe in the Portland area. The latest data shows that the number of Clark County residents filing Oregon income taxes fell below 70,000 in 2024 for the first time since 2016, an 11% decline from 2019.
Oregon hasn’t added jobs since 2023, held back by weak hiring in construction, manufacturing and other key sectors. That translates into fewer Oregonians working, and fewer people commuting from Clark County or elsewhere.
Out-of-state workers are something like free money for Oregon. These cross-border commuters pay the state’s income tax but don’t require much in the way of public services because they live out of state.
You might expect that a decline in workers from out of state would mean less income tax revenue. But over the past five years, incomes have risen faster than the number of commuters has been falling.
The state collected an estimated $268 million in income taxes from Clark County commuters in 2024, according to Chris Allanach with Oregon’s Legislative Revenue Office. That’s up about 7% from 2019.
Even so, the numbers suggest Oregon would have collected $33 million more if the number of workers from Clark County had remained constant instead of declining.
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