Oregon approves tax deal for Nike expansion
SALEM, Ore. (AP) - A deal proposed by Nike Inc. to create hundreds of jobs in Oregon in exchange for a guarantee that the state won't change a favorable corporate tax structure prompted state lawmakers to approve emergency legislation Friday.
Critics have questioned the timing and purpose of the special session, but rather than head out on holiday vacations, the state's part-time legislators met in Salem on four days' notice to consider whether to give the world's largest athletic shoe and apparel company the assurances it demanded.
The deal is evidence of the lengths Oregon leaders will go to in order to protect the state's best-known company, and the economic footprint, with its trademark swoosh, that it has in the state.
"We have a wonderful, wonderful company that's going to be remaining in Oregon because of what we're doing here today," said Democratic Sen. Ginny Burdick of Portland.
Gov. John Kitzhaber's decision to call the special session stunned lawmakers who didn't see it coming, underscoring that even as tax incentives have become a common tool for politicians to lure large employers, Nike's deal is unconventional.
The meeting cost taxpayers $13,000 and came less than two months before the regular legislative session was set to convene. It is aimed at maintaining the status quo, rather than approving new tax breaks.
Such factors led Kitzhaber to acknowledge the emergency legislative session was "extraordinarily awkward."
Still, Nike plans to create 500 or more jobs and invest at least $150 million in an expansion if the so-called "single sales factor" tax benefit remains in place, according to the Democratic governor. The governor will sign the bill, potentially as soon as next week, spokesman Tim Raphael said.
It was unclear whether Nike would actually move to expand outside of Oregon — a company spokeswoman refused to say — but the mere threat was enough to prompt action.
In a statement, Nike spokeswoman Mary Remuzzi thanked legislators for acting "quickly and decisively."
"This is a very positive step forward, not only for our company but for the state of Oregon," the statement said.
The prospect of many new workers is critical in a state that has no sales tax, limited property taxes and relies heavily on personal income taxes, said Republican Rep. Vicki Berger of Salem.
Nike employs thousands of people in Oregon, many of them at its headquarters in relatively high-wage jobs, including legal, design, sales, information technology and corporate strategy.
Company officials have been mum about their expansion plans, refusing to say where they'll build or what the new workers will do.
The company's presence near Beaverton, a Portland suburb, has helped make the area a hub for athletic and outdoor apparel companies. Columbia Sportswear's global headquarters is in Beaverton, and Adidas has its North American headquarters in Portland.
Nike has deep roots in Oregon, where it was created in the 1960s by a former middle-distance runner and his college track coach. Together, Phil Knight and Bill Bowerman built the company into one of the globe's most influential brands.
Knight also is the largest contributor to University of Oregon athletics, and his money is considered a key factor in vaulting the school's football program into national prominence.
Kitzhaber has said Nike approached his staff about a month ago, saying the company was being courted by other states but would expand in Oregon if officials promised to keep in place the substantial tax benefits for companies that employ many people in Oregon but sell most of their goods elsewhere.
The legislation passed Friday would authorize the governor to give Nike that promise for up to 30 years.
A handful of people opposed to the legislation set up anti-Nike signs in front of the Capitol as lawmakers met inside.
"You cannot do this in such a rushed manner, and this is just not an emergency," Susan Barrett of Portland told lawmakers.
Copyright 2012 The Associated Press.
Hell has finally froze over. Liberal Democrats openly admit that Ronald Reagan was correct! Lower, constant tax rates help employers, which hire more workers, which adds to the tax paying base, which brings in more revenue to the government. Thank you Liberals, for finally agreeing with what we Conservatives have known for decades.
Here's the problem I see. If the state gives a bennie to Nike, don't they have to do the same for all companies? In theory the government should not be favoring one business over another. And, by extension, shouldn't the state have to offer the same advantages to small businesses as well as large? Government does not have the right to treat different companies in different ways.
Oregon Liberals working with the big evil corporations! I wonder how the occupy group likes their chosen governing body!?! I thought the Democrats were for the working and middle class, LOL.
The only emergency here is that Nike has Oregon over a barrel and isn't afraid to flex its muscle to protect its corporate interests. This outrage demonstrates clearly that Nike, like all big corporations, doesn't care about people, only about profits, and has no sense of loyalty to this or any state. It will go wherever it can maximize profits. Worse, it's sickening to watch the so-called legislature reduced to sycophants of Nike, led by our shameless governor.Â
So, lower taxes encourages business investment which leads to jobs?
It's called corporate welfare.
Â
The government would do us ALL much more good by helping
small businesses, which constitute 99.7% of all firms.
Â
Once again they've missed the mark.
Fluff over substance.
@Mipsfer Small business is struggling and gubmint (Federal & State) has their hand out. I'm small business and we can't afford to hire any new people, even though we want to. Don't get me wrong, we're holding our own and making a good living but with 0bamacare coming on line we're going to layoff people to get under the 51 employee mark. If we don't do that, we won't survive. I think we're going to be "Fiscal Cliff Diving" in two more weeks. I say bring it on....
 @Mipsfer I am not from here, but my father-in-law is a local Portland businessman and is always having to pay more taxes for the same business he has had for years, while all of these big corporations get tax breaks over and over again, yet the people that keep this town going get hosed over.
Just do it
Nike could save a lot of money by moving to Nevada.
 @RalphCramden Nike could save US a lot of money by moving to Nevada.
 @MipsferÂ
Yes they could.
Â
The little people will have to pay the additional taxes that Nike isn't going to pay.
Hmmm... our little gov't here in Oregon is starting to look a lot like its "big brother" in Wash DC...
Â
...sigh...
Oh yeah, and ACTING like it, too...!
 @margay1 Normally I'm critical, but this is a good plan.
 @Playanekes  @margay1 For who? Nike investors?
 @margay1 ...I hope. There are some good arguments on here. :>
At a time of record breaking profits for the wealthy elite, I refuse to be blackmailed by billionaires. I want a level playing field for all Oregon business' large and small. If Nike can't make it with the same rules that all Oregon business comply with I don't want them here. It's yet another assault on the sovereignty of regular folks. If we as Oregonians decide at some point in the future to change the corporate tax codes, than that change should affect all companies equally, not just the ones without the lobbing power of corporate giants like Nike. If my business and yous is subject to the changes of future tax codes, than shouldn't all business'?
 @stant III The deal doesn't just apply to Nike but if we don't want them here, maybe we can replace all the jobs when they move. All we have to do is break the deal.
Â
As I understand it, it applies to any corporation who employes 500+ people and invests over $150,000,000 developing their business in the state.
Â
On the other hand, as a native of Oregon I do despise Beaverton and wish that everybody who came here to work there would go back to whatever hell they came from instead of trying to turn Oregon into it. Oregon is like Burning Man; flooding it with people doesn't make it any better, regardless of how cool they think they are.
I see Phil is a firm believer in the golden rule.....
Â
Those with the gold make the rule
Phil baby says jump..... and the good Dr. ReRun says how high.......
Really, 500 new jobs? What it really means is that of the 500 so called jobs, people with-in Nike get promoted to a new position while the old position just goes away. The number is usually much lower then whatâs reported, it just Nike's way of twisting Oregonâs arm. Does anyone really think Nike has or needs that many management positions? We all know that a majority of the manufacturing is done overseas.
Sure - to h*ll with small business, let's give Uncle Phil another couple billion. In a Democratically controlled state (no less) let's cut retiree pensions, p*ss away money on "green ventures" and give huge tax breaks to the (true) 1%.Â
Where is my tax break? The hell with NIKE. My property taxes go up and the value goes down. Nike just keep getting more profitable and they pay no taxes. Oh! i forgot I am one of the 47% that has a job, goes to work every day, pay my bills, and can't afford a pair of Nike shoes. Why should I get a tax break.
Meanwhile  Oregon's Jeld-Wen cuts camp.
And companies like Intel, Columbia Sportwear, precision Castparts, my neighborhood mechanic??? I seem to recall equal treatment under the law being a meaningful concept. Is that all it is now? A concept?
The governor has said Nike approached his staff about a month ago with an offer he couldn't refuse. Nike said it was being courted by other states but would expand in Oregon if the state would promise not to change the method it uses to calculate Nike's tax bill. The legislation being considered would authorize the governor to give Nike its promise.
Â
The Nike mafia has made it's demand, now the gov will bow to it.