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No need for turf wars over Nike

As Nike nears a decision on where to expand next, at least its choices are reportedly limited to two communities in Oregon. This time, the state isn’t in danger of watching as another corporate headquarters jumps across the border, or across the globe.

Wherever Nike lands, it still will be an economic force for good in Oregon, propagating jobs and contributing directly and indirectly to state revenues that support schools and other public services.

Nike’s allegiance to Oregon was secured by an unprecedented special session of the Legislature that was called in December, specifically to seal a tax deal for the sportswear company. Nike officials said they wanted tax stability and likely were worried future legislatures might raise corporate taxes, so they persuaded Gov. John Kitzhaber and others to guarantee Nike’s current state tax structure. In return, Nike committed to invest at least $150 million in an expansion that would create 500 or more jobs.

Now, Beaverton and Portland are believed to be competing for this new facility, and Nike, if it hasn’t made a choice by the time you read this, is rumored to be very close to one. Politicians from Washington County and Portland are downplaying the rivalry over Nike, noting that Oregon will win no matter what.

On the whole, we agree with that assessment, even if we admit to some discomfort with the opaque process being used to determine when and where Nike will expand. Nike’s eventual decision will be scrutinized for whatever property tax breaks or other concessions the company receives, but residents of the metro area also should keep the larger economic context in mind.

Nike’s apparent choice is between land near its Beaverton headquarters, which is just outside the city limits in unincorporated Washington County, or other sites within the city of Portland. In both cases, the jurisdictions involved potentially could offer property tax breaks through either state-approved Enterprise Zones or their own urban renewal districts. Such tax breaks would temporarily reduce the property tax proceeds that go to local cities, counties and special service districts. The concessions would also have a slight impact on school funding, but because school revenue is equalized statewide, the local effect on schools would be negligible.

Of larger consequence in any case will be the ongoing state income taxes paid by the 500-plus workers who would be hired by Nike as part of this expansion. When coupled with the 8,000 jobs already at Nike, these jobs represent tens of millions of dollars in revenue for the state each year.

Those jobs, and what they mean for Oregon, continue to justify the Legislature’s unusual tax pact with Nike. As it turns out, the company was also right to suspect that legislators were about to hit it with new taxes. One revenue-generating idea now being considered in Salem is removal of the cap on minimum taxes for big corporations — companies just like Nike.

People can argue about the wisdom of special tax incentives for Nike and other companies, but here’s the bottom line: Without the thousands of jobs that Nike, Intel and other mega-corporations provide, Oregon’s ability to fund schools would be greatly reduced, its workers would be poorer and the tax burden on each and every family would be proportionately greater. This mathematical reality must be weighed by local and state officials — and that’s why they are justifiably eager at times to recruit and retain the Nikes of the world.




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