Oregon businesses are thriving amid the strongest regional economy in a generation. Politically, however, the business community is a wreck.

The state’s business lobby splintered heading into last month’s general election and got clobbered at the ballot box. Efforts to block a Democratic supermajority in the House and Senate failed, and voters emphatically rejected initiatives to protect beverage companies, supermarket chains and real estate from new taxes.

Separately, the business community risked its clout with Oregon Gov. Kate Brown when many companies backed Republican Knute Buehler’s unsuccessful campaign to defeat her.

“Business has inflicted multiple cloutectomies on itself,” said Sen. Betsy Johnson, the salty incoming co-chair of the legislature’s powerful joint budget-writing committee.

A Democrat from Scappoose, Johnson has historically been sympathetic to business interests and sometimes votes with Republicans. Heading into next year’s legislative session, though, Johnson said she is aghast at what she sees in the business lobby.

“The problem is too many organizations, too many disparate purposes, no single theme,” Johnson said.

Business executives will gather Monday in Portland for the Oregon Business Council’s leadership summit with the state’s economy thriving. Nearly every part of the state is adding jobs and unemployment is at a historic low.

The summit is the business community’s annual effort to set a political agenda for the state and influence lawmakers, and it brings many prominent companies and top politicians – including the governor, both of Oregon’s U.S. senators and much of the Legislature.

This year, though, the summit’s Oregon Business Plan is one of several voices from the corporate world vying for attention.

Oregon’s largest business association, Oregon Business & Industry, is recovering from a disastrous start and near-complete staff exodus. Formed last year by the merger of competing groups, OBI fired its first chief executive in April after The Oregonian/OregonLive reported on a series of management failures and a racist comment he made about a state lawmaker.

As OBI stumbled, the business lobby fragmented:

Environmentally minded companies created their own organization last year, the Oregon Business Alliance for Climate, to promote a state carbon tax – a proposal many heavy industries staunchly oppose.

Then last summer, Salem lobbyist Shaun Jillions created a new trade group, Oregon Manufacturers and Commerce, “to ensure reasonable and balanced solutions are promoted on pressing policy issues including environmental, labor relations and taxes.” Backed by heavy industry and timber interests, it’s positioning itself as an alternative to business organizations increasingly focused in the Portland area.

The grocery and beverage lobby put its own initiative, Measure 103, on November’s ballot to protect soda pop and supermarket chains from new taxes. And real estate brokers created their own initiative, Measure 104, in hopes of insulating mortgage interest from future taxation. Voters walloped both proposals despite millions of dollars in corporate campaign spending.

Most significantly, Oregon’s biggest company, Nike, has gone its own way in an unusual alliance with public employee unions and a handful of other business associations including the Oregon Health Care Association. James Carlson, the health care association’s president, told Oregon Public Broadcasting last week that the coalition supports new taxes and won’t insist on cost controls for the state’s soaring public pension debt, as other businesses have long demanded.

The split in the business community suggests efforts to unify under OBI backfired, according to Tom Kelly, owner of Neil Kelly Co. He was founding chairman of the Oregon Business Association, a progressive group that combined with the old-line Associated Oregon Industries last year to create the new, larger business association.

Companies including Nike opposed the merger and other progressive businesses, including Kelly’s, dropped out altogether. He’s now chairman of the Oregon Business Alliance for Climate.

“I think the idea of unifying things did fragment it, absolutely,” Kelly said. Business groups are proliferating as companies seek to find an organization that reflect their own perspectives, he said. That’s diluting businesses’ collective influence.

“That’s not good for the state,” Kelly said. “The business community is such a large part of our society.” Kelly said.

Businesses at the other end of Oregon’s political spectrum are no happier.

“You saw this election cycle there were a lot of different things the business community spent their time and energy on. There wasn’t this single focus,” said Erica Hetfeld, a veteran Salem lobbyist who helped lead the campaign that defeated Measure 97, the 2016 initiative that would have boosted Oregon business taxes by $3 billion a year.

Hetfeld now runs Priority Oregon, a business-backed group that advocates for low taxes, government spending cuts and an improved business climate. She said Oregon business interests aren’t organized. As experienced lobbyists have retired, Hetfeld said new leadership hasn’t emerged. And she lamented that business community hasn’t organized around elections the way labor has.

“Business treats elections as an annoyance or a sideshow and public employee unions treat elections like a business,” Hetfeld said.

None of this is to suggest that the business community is in any way helpless. The armies of lobbyists who descend on Salem every winter aren’t there for wine tasting.

During last year’s short legislative session in Salem, lawmakers abandoned plans to repeal a lucrative tax break for internet providers amid intense lobbying from Comcast. That gave the company leverage in negotiations with the state over a related tax dispute, which Comcast ultimately settled for $155 million – $45 million less than the Department of Revenue said Comcast owed.

And just this past week, in Portland, the city council rescinded a pledge to collect $10 million through a tax on heavy trucks following industry pressure.

While businesses can be effective lobbying for special interests, though, lawmakers have long complained they don’t know who speaks for the business community on broad policy issues. That undermines its effectiveness against a unified labor movement.

“Hopefully this is a wake-up call to the business community that they need to have more people working on elections in the state of Oregon than you have working at a Dutch Bros. drive-thru,” Hetfeld said.

Some business association leaders see hopeful signs. In August, OBI hired Sandra McDonough to take over the organization as CEO. She ran the Portland Business Alliance for 14 years and is well-known among Oregon lawmakers and in chambers of commerce around the state.

“I actually feel very good about where we are now with our new organization. And Sandi is key, in my mind,” said Duncan Wyse, president of the Oregon Business Council, which is organizing Monday’s leadership summit. “It will be a voice that recognizes that we need a strong, healthy business climate and we also need excellent schools.”

During OBI’s calamitous first year, OBI lost most of the staff that it inherited from the two merged organizations and is starting over with a new team of inexperienced lobbyists. But McDonough defends her staff and promises to augment their work with savvy outside consultants.

Membership remains around 1,600, she said, roughly where it was at the time of last year’s merger. And she insisted lawmakers want to hear what businesses have to say about how their proposals would impact the state’s economy.

“I think the most important thing we can do, or any lobby can do, is to provide thoughtful and valuable input on the impact of whatever policy makers are working on,” McDonough said.

The governor called for $2 billion in new taxes to spend on education in her budget proposal issued last week. While McDonough said her members can’t support a figure that large, she said business is open to some level of new taxes – provided lawmakers also act to contain spending.

Businesses and lawmakers have pursued that kind of grand bargain for years, proposing new taxes for in exchange action on the state’s rising health insurance costs and its soaring, $25 billion public pension deficit.

But it’s no longer clear the Democratic supermajorities in the Legislature need to cut a deal with the business community or would have any inclination to do so. Their three-fifths supermajorities in each house give them the power, at least theoretically, to raise taxes without a single Republican vote.

Businesses including The Greenbrier Cos., The Pape Group and Kroger, and business associations including Oregon auto dealers and bankers were among the top contributors to Buehler’s failed campaign to unseat Brown. That marks them as political opponents as the governor begins her next, four-year term.

And the business community is already on the outs with other prominent Democrats. Senate President Peter Courtney told The Oregonian/OregonLive last month that the business lobby burned him “very badly” when it worked to thwart a tax on gross receipts during the 2017 session, demanding, public pension cuts in exchange.

Oregon’s public employee unions stand to be big winners if there’s a breakdown between the state’s political leadership and the broader business community. The nascent alliance between labor and a Nike-led cluster of progress businesses creates a powerful voice in favor of more state revenue – without the pension cuts the unions have long decried.

Melissa Unger is director of the Oregon chapter of the Service Employees International Union, which represents thousands of public workers in the state. She said big Oregon industries took an increasingly hard line on public spending after the merger of the state’s two big business organizations.

The fragmentation in the business community has opened the way for new voices to emerge in the corporate lobby with a more conciliatory approach. That enables labor groups to choose the business partners it finds most sympathetic, and leaves other companies with a less effective counterweight.

“From our perspective,” Unger said, “we’re excited there are businesses that are interested in tackling the state’s challenges, with business and labor together.”

-- Mike Rogoway | twitter: @rogoway | 503-294-7699