Tax measure impact overstated?


ben-blogA year has passed since the passage of Measures 66 and 67, the controversial tax increases targeted at wealthy individuals and businesses in Oregon. These measures were extremely unpopular with many within the business community, and after the vote the predictions of abandonment and downsizing were dire. Have those predictions come to pass?

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By Ben Jacklet

A year has passed since the passage of Measures 66 and 67, the controversial tax increases targeted at wealthy individuals and businesses in Oregon. These measures were extremely unpopular with many within the business community, and after the vote the predictions of abandonment and downsizing were dire. Have those predictions come to pass?

A new website launched by supporters of the measures argues that they haven’t.  The site features a rolling list of headlines linking to stories about businesses moving to or expanding in Oregon. It’s a challenge to read through them all because there are so many examples of recovery to plough through.

There’s Facebook in Prineville, completing a new data center and hinting it may soon need another one nearby. And Vestas choosing Portland for its $66 million U.S. headquarters building. And young companies such as Elemental Technologies in Portland and Floragenex in Eugene, raising millions of dollars and hiring like crazy. Plus Oregon icons like Nike and Kettle Foods, expanding and hiring.

Red-hot retailer H&M set up three stores in the Portland area. New Seasons Market opened its 10th local store in 12 years. Venture capitalists poured twice as much money into Oregon as in 2009. And the kicker: Intel, the state’s largest employer, is investing billions in a new Hillsboro fab while enjoying its most prosperous year ever.

It’s quite a list, but it doesn’t tell the whole story. Many businesses, especially the small businesses that make up the backbone of the Oregon economy, continued to struggle in 2010. The state’s jobless rate has remained largely stuck at around ten and a half percent, a percentage point higher than the national rate.

And I’ve certainly heard from plenty of business owners and executives over the past year who felt that the last thing they needed after a devastating recession and widespread financial chaos was a pair of new taxes to worry about.

But I haven’t heard of many businesses, if any, leaving Oregon specifically because of the tax increases. A persistent rumor involving the impending departure of a deeply involved Portland entrepreneur and investor thankfully has not come to pass. There is the case of Bruce Hough of Comnet Marketing Group in Medford, who said he would expand his company outside of Oregon due to the tax burden. But according to the company’s website, Comnet is still based in Medford.

I also recently heard a compelling story about an investment firm from California choosing Clark County over Oregon for tax reasons. But there can’t be that big of a wave of businesses washing into Vancouver USA over Portland, because the unemployment rate in Clark County is even worse than Oregon’s.

I took a lot of abuse in the comments section last March when I suggested in admittedly blunt fashion that tax measure opponents were overstating their case with references to a phantom exodus out of Oregon. I put a request out for examples of companies actually exiting, but heard mostly vitriol in response rather than actual examples.

I’m eager to hear specifics. If you know of companies exiting Oregon for tax reasons, tell us about them. In the meantime, I have contacted the folks behind Exit Oregon and oregontaxresponse.com to see what findings they have to offer in rebuttal. I’ll post their findings as soon as I hear from them, and link to their reports once they are available.

Ben Jacklet is managing editor of Oregon Business.




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