Special Session to Secure Major Jobs Opportunity Illustrates Oregon Business Plan Vision

Governor Kitzhaber and the legislative leadership gave a ringing endorsement to the core vision of the Oregon Business Plan with the announcement Monday of a special one-day session this Friday to adopt tax legislation that will encourage traded-sector companies to stay, locate and grow here. 

According to Cascade Policy Institute Founder and Senior Policy Analyst, Steve Buckstein “the Governor only wants to make tax certainty deals with what he calls “the right kind of businesses” that will drive our per capita income up. This leaves out people who, for whatever reason, have little education and/or few job skills. These are often the young and minorities, for whom a lower wage job is the first rung up the economic ladder.”

The concurrent announcement that Nike, Inc. could add thousands of Oregon jobs in the next few years is a ringing endorsement that the policy works says the Oregon Business Plan steering committee..

The Governor will ask the special session for a law assuring companies committing to significant long-term investments in Oregon that current corporate tax policy will stay in place over the same term. That will apply specifically to companies that plan to create at least 500 jobs and can commit to at least a $150 million expansion plan that takes place within five years.

This is a win-win step. Companies know they can make major job-producing capital investments here assured of stability in the single sales factor corporate tax policy. Oregon secures jobs that buoy local economies and generate additional
revenues for schools and other public services.

This assurance is important to Nike, Oregon’s largest headquarters company, as it prepares to execute plans that could make a significant addition to well paying jobs in the state.

An analysis provided by ECONorthwest for the Oregon Business Plan suggests that an additional 1,000 traded-sector jobs generates 1,700 local jobs among suppliers and service businesses, as well as $23 million in state and local revenue.

These economic ripples illustrate the central vision of the Oregon Business Plan: encourage the growth of innovative, sustainable and globally competitive traded-sector industries. The sales dollars that they bring in sustain payrolls, local suppliers, and local merchants and service providers. This growth, in turn, generates additional public revenues to pay for education, public safety and other vital services.

The single sales factor tax policy is complex, but its impacts on job growth are important. For companies that operate in many states, a key tax issue is how to apportion profits among those states for tax purposes. Oregon’s policy, adopted in 2001 and accelerated in 2005, rewards companies that employ and invest in our state and that sell their products outside our borders. In contrast, those that sell into the state, but have little impact on the local economy pay more. It is smart policy, which is why it has had such strong legislative support.

Cascade Policy Institute Founder and Senior Policy Analyst, Steve Buckstein, issued the following testimony to present before the Legislature’s Joint Special Committee on Economic Development in regards to to the Economic Impact Investment Act of 2012:

“Good morning, Co-Chair Burdick, other co-chairs and members of the committee. I’m Steve Buckstein, Senior Policy Analyst and founder of Cascade Policy Institute, a public policy research center based in Portland. Our mission is to promote individual liberty, personal responsibility, and economic opportunity in Oregon.

“Regarding the concept of this legislation, I have some praise for the Governor, coupled with concerns and suggestions for making the bill better, and fairer.

“First, the fact that the Governor is ready to grant tax certainty to Nike and other big companies in return for capital investment and job creation should be applauded. It’s recognition that taxes matter, and good tax policy can attract business and jobs. But, Oregonians of all political stripes also appreciate fairness, and I’m concerned that this legislation will be fundamentally unfair, especially to small businesses and many Oregon job seekers.

“The Governor only wants to make tax certainty deals with what he calls “the right kind of businesses” that will drive our per capita income up. This leaves out people who, for whatever reason, have little education and/or few job skills. These are often the young and minorities, for whom a lower wage job is the first rung up the economic ladder.  

“Also, granting the Governor power to approve or disapprove such deals at all risks charges of favoritism and corruption. Just think about Nike getting its deal while one of its competitors is later turned down. A level playing field would eliminate these concerns. One way to do this is with a formula that prorates the number of jobs and capital investment required to the business size. For example, 500 jobs added to Nike’s current 8,000 Oregon employees would equate to 125 new jobs for a company that currently employs 2,000 Oregonians, without any gubernatorial discretion at all.

“And, what’s magical about the 500-job threshold in the first place? While that’s a big number anywhere in Oregon, 50 jobs may be a big number in smaller communities. And, five jobs may be significant elsewhere. This is a small business state; so why not expand tax certainty to the businesses that create most of the jobs already?

“In conclusion, I agree that granting Nike tax certainty is a good idea. But it would be an even better idea if all companies got the same certainty—big and small alike. That way, every Oregonian would stand to benefit, and the program would be fair to all.

What is the Oregon Business Plan?

The Oregon Business Plan is an effort by the state’s business leaders to create 25, 000 new jobs across Oregon each year and raise Oregon‘s per capita income above the national average. The Plan is a collaborative effort among several business leaders and business associations, developed in close partnership with Oregon‘s elected leadership.

We envision achieving the Business Plan goals by growing diverse, thriving clusters of industries that are global leaders in product design and innovation. The strategy to boost these industries is to improve the conditions necessary for them to succeed: talented people, greater productivity, quality of place, and pioneering innovation – what we call the 4Ps for prosperity.

Steering Committee

John Carter, Chair, Schnitzer Steel Industries

Eric Blackledge, Blackledge Furniture

Nik Blosser, Celilo Group Media; Oregon Business Association

Samuel Brooks, S. Brooks and Associates; Oregon Association of Minority
Entrepreneurs

Justin Delaney, The Standard

Matt Donegan, Oregon Board of Higher Education

Patrick Egan, Pacific Power; Oregon Transportation Commission

Dwayne Johnson, Globe Three Ventures; Oregon Small Business Advisory Council

Randy Miller, Produce Row Property Management

John Morgan, Avamere; Oregon Innovation Council

Greg Ness, The Standard; Greater Portland Inc.

Wally Van Valkenburg, Stoel Rives; Oregon Business Development Commission

Malia Wasson, U.S. Bank; Oregon Business Council

Howard Werth, Leupold & Stevens; Associated Oregon Industries

Brett Wilcox, Summit Power Alternatives

Ex-Officio Members

Paul Barnum, Oregon Forest Resources Institute

Jon Chandler, Oregon Home Builders Association

Jay Clemens, Associated Oregon Industries

Ryan Deckert, Oregon Business Association

Ron Fox, Southern Oregon Regional Economic Development, Inc.

Tim McCabe, Oregon Business Development Department

Steve McCoid, OR Restaurant & Lodging Association

Sandra McDonough, Portland Business Alliance

John Mohlis, Oregon State Building Trades & Construction Council

Sean Robbins, Greater Portland, Inc.

Mike Salsgiver, Association of General Contractors

Duncan Wyse, Oregon Business Council

www.oregonbusinessplan.org.