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OR: Governor calls special legislative session for proposed Nike expansion

By   /   December 10, 2012  /   No Comments

Kitzhaber

By Shelby Sebens | Northwest Watchdog

SALEM –  Oregon lawmakers will return to the capitol Friday for a special session called by Gov. John Kitzhaber to deal with legislation that could ensure a Nike expansion.

The proposed legislation would give the governor the authority to guarantee the corporate tax code doesn’t change for certain companies in exchange for jobs. The legislation does not propose any new incentives or changes to the current tax structure.

Nike  apparently can’t wait for the legislature to meet for the regular session in January.  Company officials say they are being pursued by other states and need to act quickly for internal reasons. Kitzhaber said during a press conference in his office Monday that he’s discussed the proposed legislation with Democratic and Republican leaders.

“We are all in agreement that this matter needs our immediate attention,” he said. “There is a sense of urgency. This company is too important to Oregon.”

Kitzhaber said the estimated economic impact of Nike’s expansion would be $2 billion a year and more than 12,000 jobs by 2020. But details of the expansion were not revealed.

The legislation would authorize the governor to enter into an agreement with companies that commit to a minimum of 500 jobs and $150 million in capital investment over five years. The state of Oregon would then agree that the corporate tax structure would not change for that company for a given period of time.

There was no mention of what other states might be luring Nike away from Oregon.

“They didn’t say, ‘ if you don’t do this we’re leaving,’” Kitzhaber said of Nike. But they are actively being pursued. “To me that’s enough,” he added.

Kitzhaber said the legislation would impact a small number of companies because of the job and investment requirement.

“Nike is a global company with a long history in Oregon,” Nike Vice President & Chief Financial Officer Don Blair said in a press release. “We support this proposed legislation as a way to help us continue to grow in Oregon.”

Kitzhaber said he hoped lawmakers would make a decision on the legislation Friday and that it would be a shot in the arm to a state that badly needs jobs. He also said Nike’s continued growth in Oregon would help ensure non-stop flights from Portland to Asia continue.

The legislation appears to have some bipartisan support. Outgoing co-speaker of the House Bruce Hanna, a Republican, was on board.

“Not enough has been done to create an environment for robust economic growth and job creation in Oregon, Hanna, R-Roseburg, said in a press release. “The legislation we will move during the special session is a simple way to create enormous long-term benefit for our state, its people and its economy. While special sessions are never ideal, this opportunity for Oregon demands immediate action.”

The rush to get this legislation passed in a lame duck session where Republicans still hold par with Democrats in the House (it’s split 30-30) had some raising an eyebrow. Come January, when session starts, Democrats will take over a majority in the House and Senate. Eric Fruits, Adjunct professor of economics and finance, Portland State University, School of Business Administration, said he was surprised at the quick effort to get this legislation through.

He questioned whether this move by Kitzhaber, a Democrat, was an attempt to pull one over on Republicans, who are typically pro business initiatives. “This really highlights the problem with corporate taxes,” he said. “Corporate taxes are corrupting.”

Fruits said he hopes lawmakers will consider this carefully instead of making it a done deal.

Steve Buckstein, Senior Policy Analyst of the Cascade Policy Institute, said tax certainty is great, but only when it’s for all.

“It shouldn’t be up to the governor to decide which companies get tax certainties and which don’t,” he said. “It’s picking winners and losers on a bigger scale.”

Restricting it to only companies that create 500 jobs or more is unfair, he added, and could up the likelihood of political contributions to the governor by big companies looking for that tax certainty.

“To me that hurts minorities, it hurts young people,” he said.

Contact Shelby Sebens at Shelby@NorthwestWatchdog.org, or follow her on Twitter @ShelbySebens. For more Northwest Watchdog updates, visit NWWatchdog on Facebook and Twitter.

 

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