Presenting
Economic Development Bill
(House Bill 4200)

Greetings,

In the midst of working on the Special Session last week we got the terrible news of the shooting in Newtown, CT. I need to understand a lot more before I can propose any solutions. For now I only feel sadness for the victims and the families who will live with great voids in their lives. It happened at Clackamas Town Center a few days before and here, at Thurston High School in 1998. It could happen anywhere.

Other countries have succeeded in reducing murder by gunshot in diametrically opposite ways. Some countries restrict the possession of guns other countries are also heavily armed, yet have almost no gun-related violence. The only thing we know for sure is that our current approach has failed miserably and we will need to learn from those who have curbed gun violence how to devise an American solution. The shooting in the school in Newtown has focused my mind, and I hope yours, on the problem with renewed determination to find solutions that work.

Phil

 

HAPPY HOLIDAYS

I hope that this Holiday Season brings you rest and rejuvenation!


  LEGISLATIVE CALENDAR

  Organization Days:
January 14th to 16th

Last Day to Request a Bill:
January 18th

Session Starts:

February 4th


Grand Opening of Global Hall

Rep. Barnhart attends Grand Opening of Global Hall at University of Oregon


Attorney General Ellen Rosenblum's Report on Oregon's 20 Worst Charities for 2012

In case you missed it, here is a list of 20 charities in Oregon that spend the majority of their donations collected on administrative costs rather than direct charitable programs.  "The Better Business Bureau recommends donors avoid any charity that delivers less than 65 percent of its money to its stated charitable pursuit." To read the full release click here.


Crisis Response Resource Page Created

"After the tragic events of last week, the Addictions and Mental Health Division has created a web page with links to both local and national resources that help children, families and communities respond to crises." Click here to access this resource.


Need a Speaker?

I regularly hold coffees, town halls, and speak to other groups around the district.  If you would like me to meet with your group about Legislative work, you have only to ask.

LEGISLATIVE REPORT

On December 14th the Governor called for a Special Session to review a bill concerning Nike's expansion plans in Oregon. Specifically, the Governor asked for authority to contract with Nike (or other businesses that qualify) to guarantee we wouldn t change the tax apportionment method. The tax apportionment method is very unlikely to change anyway.  And in return, we keep a company in Oregon that will invest at least $150M and create 500 new jobs with expected compensation in the range of $100,000 each. The Legislative Revenue Office estimates that the indirect tax benefit of the expansion Nike is planning will be more than $30M a year because of the taxes paid by Nike's new employees and the general economic growth that will result in Oregon. This revenue can support schools and other core services.

What, exactly, does the bill do? Essentially, it allows the Governor to agree that a corporation's system for allocating income to Oregon will not change for the life of the contract. It will only matter at all from a tax point of view if the legislature decides to change the current allocation formula.

What does the bill NOT do? It does not control tax rates, tax credits, methods of determining overall income, depreciation formulas or anything else about how profits and taxes are determined in Oregon except for the sole item of allocating a contracting corporation's nationwide income for Oregon tax purposes. The legislature could still raise (or lower) taxes by changing rates or changing the way income is determined in the first place. Any such change would apply to a contracting corporation in the same way it would apply to others.

The final draft of House Bill 4200 was much narrower than the Governor had requested. A bipartisan group of legislators on the committee decided to limit the duration of the Governor's authority from ten years to about nine months. That limitation will give the 2013 legislature the opportunity to study the issue and decide whether to modify and extend the authority or end it. There will be time to do a more thorough study and learn more about the pitfalls and ways to support small businesses that also need stability. Additionally, we shortened the maximum term of such an agreement by a decade and tightened up some definitions of cost for investments and new jobs.

I know that many of my constituents are upset about what they see as a special handling of one of Oregon's biggest businesses. So long as states offer special incentives to lure businesses to leave to another state and relocate we will be faced with decisions like this one. As they go, this one is likely to be quite inexpensive (zero dollars) while it gives Nike's financial planners some comfort as they consider the taxes Nike will pay for the term of the contract. I would much prefer a system that did not allow states to compete on tax policy or government incentives to get businesses to move (perhaps a 100 percent federal excise tax on the proceeds of such a maneuver??). For now, we must live within the system we have and do what we can to help Oregon grow so that Oregonians can get good-paying jobs to support their families and help pay for basic services.

Will this approach turn out to be a useful and low cost mechanism to grow Oregon's economy and promote good jobs? Stay Tuned.

Click here to unsubscribe or send an email with the subject line "remove" to rep.philbarnhart@state.or.us. If you have other questions and comments please don't hesitate to send an email to rep.philbarnhart@state.or.us or call us at 541-607-9207.

 

empowered by Salsa