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This page contains a single entry from the blog posted on December 11, 2012 8:46 AM. The previous post in this blog was Ripless City. The next post in this blog is (Yawn) Another police brutality judgment against Portland. Many more can be found on the main index page or by looking through the archives.



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Tuesday, December 11, 2012

Why do they need a special session?

The crazy Oregon state income tax deal that Nike is proposing, and that Governor Retread is bending over backward to endorse, sure smells funny. Maybe not as awful as a Portlander's compost bin in mid-August, but still pretty bad. The wild plan raises so many serious questions. Yet with the rush-rush timeline that the Guv is suddenly putting everyone on, there's no time to even ask the questions, much less get satisfactory answers.

We'll throw out the biggest one: Why is a special session necessary? Nike say it just wants assurances that the current tax laws affecting the company will stay on the books. Why can't they just accept the governor's promise that he'll veto any adverse change? Why can't they just accept the governor's promise that he'll fire any Revenue Department director who tries to make an adverse change? The need for a special session seems fishy indeed. Something tells us there's a lot more going on here than meets the eye.

And everybody gets three days to think it over. Two weeks before Christmas. To be voted on by a lame duck legislature, with two weeks left before the new one arrives. Uh huh.

But hey, everybody in The Network's on board. Little wonder -- You-Know-Who is a Nike alum.

Comments (17)

Is it legal for the governor to take taxing legislative authority away from the legislature?

As the Feds force us ALL to pay a lot more taxes in the planned failure to reach an agreement, is Nike just making sure we hog-tie ourselves so they don't have to put up more like the rest of us?

Is that "huge" corporate minimum tax, just too much to pay for these guys?

Tax...."is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority"
Found me a business person, that sells a product, who trusts the Oregon legislature.

Think retread and first squeeze are making sure they get on Phil's jet for the big game??

"Something tells us there's a lot more going on here than meets the eye."

I agree.

They're up to something and they won't tell us what's going on. This is Oregon where assuming the worst is prudent.

Especially when Jack Roberts tell us he thinks all is swell.

Look for more than Nike to be accommodated. Any number of scurrilous things are possible.

With people like Lynn Peterson (former chairwoman of the Clackamas Board of County Commissioners) advising the Gov. on "sustainable communities and transportation policy"
it could be any kind of ugly.


"It is an honor to join the governor's team to help communities across this state achieve their goals for healthy, vibrant, and sustainable growth and development," she said in a prepared statement. "I am excited to build on the successes we have had in such a diverse county as Clackamas and apply the lessons learned to assist cities and counties statewide."

There's that "vibrant" word.

"Is it legal for the governor to take taxing legislative authority away from the legislature?"

That is a good question - I think a better one is it legal for the gov to commit future legislatures to not doing certain things?

Of course, this is OR, legal depends on what time it is and who's at the party.

As a small business owner I sure could use a tax freeze too. Might make me stop considering a move to Washington State for business and personal financial reasons. It's a real trend in the Oregon business community and my guess is that Nike sent out the word it was considering moving HQ to Vancouver. All you need to do is move about 20 people in accounting, call it HQ, and bingo....big bucks. This whole thing definitely smells like panic.

I find the idea that Nike would simply "accept the governor's promise" absurd on a number of counts. But whatever this deal is, the particulars of it should be transparent and wholly available to the public. It should not be done in secret and the arrangements should not be opaque or even fuzzy.

Is this what is giving off the fishy smell?

Oregon Outback: My understanding is that small business owners in Oregon are hit much harder, on taxes and regulations, than larger corporations.

Maybe the sop if this fails is UC-Nike boxed and wrapped under Phil's Christmas tree.

Oregon Outback has it right. The unseen part of these sweetheart tax breaks is that other businesses and individuals pay for them, just like with UR scams. End it all. When Nike or others come looking for handouts, tell them no but that they won't have to pay for the next handout down the line either. Shut down the economic "development" slush fund agencies.

As Groucho Inc. might have said 'I wouldn't want to locate in a state that would give me money to locate there.'

As I understand it from a newspaper article I read, the issue Nike wants protection on is single sales factor apportionment. That is current law and Nike would like to make sure it stays current law before they invest in additional Oregon property and payroll and then have a rapacious legislature change the rules back to 3-factor apportionment and penalize Nike for their additional Oregon investment. This seems perfectly reasonable from Nike's perspective, and from the state's perspective as well. My only complaint: why can't the rest of us poor nobodies get some comfort that the legislature won't change the tax rules on us as well?

The Oregon tax burden on small businesses is indeed out of whack compared to many states. I (and my accountant) know many small Oregon businesses who have moved fully or partially to Washington State for tax purposes (including the estate tax, or course.) I myself would immediately see a 10 percent improvement in the bottom line if I jumped across the Columbia. I don't blame Nike for looking for certainty, but if this means shifting the revenue burden to other businesses to fund education, etc., then Oregon will see a continue flight of small businesses to Washington and other states. Rural communities that don't have Nikes and Intels will particularly suffer.

OregonOutback: I've read that Washington state has a much higher proportion of small businesses than Oregon does, for just those reasons, and thus more economically viable (I did NOT say vibrant!) communities.

As far as "funding education," but for the PERS drain-off, would we have an education funding problem?

I find the idea that Nike would simply "accept the governor's promise" absurd on a number of counts.

As I understand it, the proposal is to allow the Guv to make a special deal with Nike. He still has to make that deal. If they can't trust him, this whole exercise isn't worth it.

Just how powerful this will make Kitzhaber? Holding the discretion to hand out tax breaks to big companies will strengthen his already formidable fundraising ability.

"Let's see here Mr. CEO, I have gone through the checklist and I see that you are willing to invest $150M of capital into a facility that will employ at least 500 people. So far so good, now I am authorized to grant you a holiday from tax increases for up to 10 years -- I'm not required to grant the full ten years, mind you. I can exercise discretion on that, construct some "siderails" or even deny it altogether.

What can you do to assure me that you have Oregon's best interests at heart?"

"As I understand it, the proposal is to allow the Guv to make a special deal with Nike. He still has to make that deal. If they can't trust him, this whole exercise isn't worth it."

It still has to be sealed in law. Kitzhaber is Governor for only two more years. Nike's interests clearly would extend well beyond that.

"What can you do to assure me that you have Oregon's best interests at heart?"

What can Nike do to assure our Governor it has Oregon's best interests at heart? If I had to pick between Kitzhaber and the Democratic Party v. Phil Knight and Nike as to who had Oregon's best interests at heart, I'd pick Phil & Nike. Comments about "Oregon" meaning the university in Eugene completely disregarded.

I'm still, as I have implied, more concerned about individuals and small businesses left to shoulder the tax increases that I think Kitzhaber et al intend to impose to sustain the unsustainable public employee union contracts. In the name, of course, of "the children."

I'm sure I read that Nike wants assurances that nothing will change for at least three years. And the Gov's approach, to call a special session and make it law, seems heavy-handed at best and short-sighted at worst. I'm already reading about other larger businesses beginning to trundle up to the trough preparatory to making their own demands.

This leaves the legislature hamstrung if it finds itself in a situation where it truly needs to make change and can't because of a few sweetheart deals.

And, as others have said, there's nothing here for the small businessperson. And no guarantees for those of us being nickled and dimed to death by one new tax after another.

If push comes to shove, Nike will be protected but everyone else will be fair game.

Panchopdx - 'Construct some "Side Rails"' Love it!


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Lange, Pinot Gris 2015
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Avissi, Prosecco
Cleto Charli, Lambrusco di Sorbara Secco, Vecchia Modena
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Edmunds St. John, Bone-Jolly Rosé 2016
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Chehalem, Inox Chardonnay 2015
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L'Ecole No. 41, Merlot 2013
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Marc Maron - Waiting for the Punch
Phil Stanford - Rose City Vice
Kenneth R. Feinberg - What is Life Worth?
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Philip Roth - The Plot Against America
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Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
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David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
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Jeff Noon - Vurt

Road Work

Miles run year to date: 5
At this date last year: 3
Total run in 2017: 113
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