January 10, 2013
January 10, 2013
We want the same!
Who are we? We are the 336,000 small businesses in Oregon that make up 98 percent of all enterprises (74 percent of which employ fewer than 20 workers). We provide livelihoods for more than half of the state’s private-sector workforce and generate nearly all the new job growth.
We promise to create more than the 500 jobs Nike promised, do so in a much shorter period time than it can, and generate exponentially greater revenue for the state. All we need is the same shake Gov. John Kitzhaber and 90 percent of the Legislature gave to the king of tennis shoe makers.
What an extraordinary December it was in state politics, one for the annals of government study. The dynamics were only slightly different, but Oregon had its own version of a too-big-to-fail conniption fit. Nike wanted a deal—and a deal, now! It was a thunderbolt from heaven aimed right at the ears of the state’s chief executive, and act he did.
The Legislature was called into an extraordinary special session on only four days’ notice It passed House Bill 4200 by margins of 50-to-5 in the House and 22-to-6 in the Senate, giving Nike – and Nike only! – 30 years’ worth of tax security in exchange for a promised creation of 500 new jobs and $150 million in investment in Oregon It also gave the governor extraordinary powers to cut the same deal with other business behemoths And it rejected 70 proposed amendments, including ones giving small businesses the same peace of mind.
Quite understandably, Nike wanted to make sure that the way the state calculates its income taxes would not change, before it decided whether to expand in its Oregon home or not. Not so understandably is why the contortion the governor and Legislature went through could not have been extended to all businesses. It takes no degree in economics to see that hiring, equipment purchasing, and other business expansion decisions have their root in whether costs will remain the same long enough to derive some profit from the additional investment.
So let’s see: Nike employs somewhere between 6,000 and 7,000 Oregonians and is promising to up it by 500 more, increasing employment by 7 percent to 8 percent. The U.S. Small Business Administration, where the information in this column’s second paragraph comes from, says Oregon small businesses employed 767,000 workers. Given the same deal as Nike, it could then at, say, 8 percent create 61,360 new jobs.
Agree with the math? No matter, The Oregonian has some problems with Nike’s math. “Kitzhaber, citing a Nike economic analysis, said the company’s expansion could trigger up to 12,000 direct and indirect jobs and a $2 billion-a-year boost to the state economy. Those numbers were repeated by lawmakers on Friday, although Nike has not provided data to back up those claims.” Elsewhere, on another figure tossed out by supporters of the grand deal, the paper says, “The only publicly available information does not agree with this claim.” Here’s what should come out of all this:
By his deeds, if not in his direct words, the governor is on record believing that tax certainty creates jobs and adds revenues to the state coffers. Small business agrees.
By their action, lawmakers should open their 2013 session by declaring a moratorium on any tax increases. Small business would applaud.
And in addition to our biennial Guardian of Small Business awards, NFIB will also begin awarding those legislators who voted to give the biggest tax favor in history to the largest corporate interest in the state, but not to mom-and-pop shops, a smelly old Air Jordan hammered on a plaque reading: Main Street Enterprises—Too Small to Save.
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