Nike is planning to expand, and Gov. John Kitzhaber wants Oregon to benefit. He has called a special session of the Legislature on Friday. He’s hoping lawmakers will consider authorizing him to freeze the way the state assesses corporate taxes for the footwear giant if it creates the big job numbers its leaders says it will, in Oregon, of course.
The Beaverton-based company currently employs 8,000 Oregonians—with salaries averaging more than $100,000, that payroll packs a wallop. The expansion would have an estimated $2 billion economic impact, directly and indirectly creating more than 12,000 jobs by 2020, including more than 2,900 in the ailing construction sector, according to professional services firm AECOM.
Nike benefited in 2011 when Oregon decided to determine corporate taxes solely on the basis of sales, factoring out payroll and property. Under the deal Kitzhaber wants to offer, the company would continue to be taxed under that formula, so the agreement would only affect state revenue if Oregon changes its policy.
If the state gives Kitzhaber the green light, under the proposed Economic Impact Investment Act the governor could enter into a deal to freeze the corporate tax structure with any company that commits to a capital investment of $150 million and the addition of at least 500 jobs over five years.
If Nike, or any other corporate beneficiary of the act, fails to hold up its end of the bargain, we would certainly expect the state to rescind any contingent tax advantages. But assuming the company comes through, this is a solid deal for Oregonians.
For seizing a rare opportunity to directly stimulate job growth, we’re pasting a swoosh sticker on a glass slipper and giving it to Kitzhaber.
This article appears in Dec 13-19, 2012.
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Nike has an average salary of $100k a year? That must mean for the dozens at the local outlet store taking in a few thousand a year there is a corresponding few millionaires in Beaverton. At what point does this become a good company to work for? If you work at a retail outlet for a decade, will you crack the $40k a year mark? What percentage of their employees have comprehensive health care provided? I’m not buying it. Our elected officials have taken the bait, hook, line and sinker.