Tom Henderson//December 17, 2012//
Nike Chairman Phil Knight on Friday got the tax guarantee he wanted from the Oregon Legislature, but at a price.
Mary Newell of Portland will never buy a pair of Nike shoes.
Not that she ever has in the past, she testified before the Joint Revenue Committee, but now she never will.
“I don’t like blackmail,” she said.
Knight offered Gov. John Kitzhaber a deal where Nike would stay in Oregon with a $150 million expansion – and create at least 500 new jobs – if legislators agreed to not change the way Nike’s taxes are calculated.
Companies in Oregon are taxed based on the products they sell in the state rather than on their employees or capital investments. Knight wanted that system locked in place for the next 40 years for companies that commit to investing $150 million or more in the state.
Instead, legislators whittled that number down to 30 years with an opportunity to review their decision in five years.
Kitzhaber called legislators together for a hurried special session to respond to Knight’s offer. It turned out to be an offer lawmakers couldn’t refuse. They ended the one-day session with only five nays in the House, six in the Senate, and a bill of $13,000 for taxpayers for getting everyone together.
Newell was not the only one who left the capitol unhappy on Friday.
Nick Caleb, a political science professor at Concordia University in Portland, echoed most of the sentiments voiced by citizens who came to testify when he said the Legislature was acting too quickly.
“We’re accepting a horrid premise for making public policy,” Caleb said. “The confidence of investors is not the most important thing to consider.”
He added that the Legislature is reducing the role of government to an intermediary between the people and the massive corporations that truly run the country.
“We are in a race to the bottom,” he warned.
Knight and his wife, Penny, philanthropically support Beaverton public schools while insisting on outcome-based education, observed Susan Barrett of Portland. Yet students in Beaverton are packed 60 to a classroom, she added.
“Where’s the same accountability for Nike?” she asked.
That’s another reason Newell said she won’t buy Nike shoes.
“I wouldn’t trust Nike to do anything for schools,” she said.
Mary Thayman of Portland also told the Joint Revenue Committee that the Legislature was acting in undue haste.
“This situation doesn’t seem to be any kind of emergency,” she said. “We need time to look into the claims made by Nike.”
In the flurry of the special session, more than 70 amendments were proposed to the legislation. A number of them, designed to extend a similar tax guarantee to smaller businesses, never got beyond the Joint Revenue Committee.
State Sen. Betsy Close, R-Albany, favored one such amendment.
“It can go from a good deal to a great deal,” she said. “By removing the high threshold, government can offer the same predictability to businesses of all sizes.”

Rep. Vicki Berger, R-Salem, co-chairwoman of the Revenue Committee, agreed.
“Rather than being a special carve-out for a special business, it will be a provision that applies to all,” she said.
Given concerns that lawmakers are already acting too quickly, Sen. Chris Telfer, R-Bend, said the question of expanding the tax guarantee to other businesses should be taken up after the regular legislative session convenes Feb. 4.
Sen. Mark Hass, D-Beaverton, said he doesn’t believe the Legislature acted too quickly when he considers the private citizens who had a chance to testify.
“It feels like Oregon to me,” he said.
Rep. Phil Barnhart, D-Springfield, said the special session was important.
“We’re trying to help a business that needs help now,” he said.
Sen. Ginny Burdick, D-Portland, said this is not favoritism toward Nike.
“We have a wonderful company that will continue to be in Oregon in a big way,” she added.
Berger said lawmakers value all Oregon businesses, large and small. However, she said, it is undeniable the contribution that Nike makes to Oregon.
“Income taxes are what really pay the bills,” she said.