On Measure 67, Steve Duin shows the media how it's done

Kari Chisholm FacebookTwitterWebsite

Name a company that's left Oregon because of 66/67. And tell me where that company landed in search of a better deal. --Steve Duin

When critics of Measures 67 say that it caused or is causing Oregon businesses to flee across state lines, I have - along with many others - been imploring the media to insist: Show us the math.

The critics almost never even point to an actual business that's actually moving. When they do, they never provide the hard numbers. They just wave their arms wildly and expect us to believe that any tax increase at all is enough to drive folks into the waiting arms of Idaho, Nevada, Washington, or California. (And here, I'll offer another plug for the Is the Grass Greener? report that actually answered the question - are taxes on business higher or lower in Oregon than in other states?)

At the O, Steve Duin provides a welcome example of how to handle the critics. Insist on specifics. Insist on the math. In his column a week ago about the "Is the Grass Greener?" report, he engaged with critics in his comment thread - insisting on specifics:

Jimbob: Which company? For all I know, it made sense: This stuff is impacting every company differently. But I'd appreciate a few more details.

And again:

I'll repeat the request. Name a company that's left Oregon because of 66/67. And tell me where that company landed in search of a better deal.

There were, of course, no specific responses. Later, one of his commenters noted that the Governor of Idaho, Butch Otter, has been saying that Oregon businesses have been fleeing there. So, Duin called Gov. Otter. Here's what he found...

So, I called Gov. Otter's office Wednesday and was directed to Don Dietrich, the director of Idaho's Department of Commerce.

And I asked Dietrich if, indeed, 97 Oregon companies were moving to Idaho owing to their owners' unhappiness over Measures 66 and 67?

Uh, no.

How many Oregon companies have crossed the border?

"I can point to two businesses that have made the jump across the line," Dietrich said.

Large businesses?

"Small."

Would he like to name them?

"We simply don't share that information."

As John Calhoun noted to Duin (and to me, in person, over the weekend), one of those companies is a five-employee firearms manufacturer called Next Generation Arms. The owner of that firm says he's moved for all sorts of reasons - including complaints that Oregon is regulating firearms manufacturers, providing health care for children, and just generally becoming a "socialist" state. (Laughable, of course.) But the bottom line is: He's moving for what we'll generously call "lifestyle" reasons, not economic ones. As we now know, business taxes are higher in Idaho than in Oregon.

Back to Duin, he still wants specifics:

If anyone can come up with the name of the second company that decided Idaho was a better place to do business, I'll be happy to list it.

Steve Duin's got the right approach here. Journalism should be about finding and accurately describing the truth -- not the he-said/she-said foodfight. There's plenty about politics that's about the arguments on both sides, but when it's a factual, quantifiable question - how much did your taxes actually go up? - it's the numbers that should carry the day. Every time.

Comments

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    You and Duin are completely correct. Give us facts, not emotional overlay.

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    But will you and Steve care in 2-3 years when we will have had enough time to get some credible data on the subject. My guess is no you won't.

    Even if I wanted to move my business, I can't until May when my lease expires. Don't want reality to get in the way of a good story do we.

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      Typically the costs associated with moving a business and the deep discounts commercial real estate companies will give businesses to remain in their current locations not to mention the hassle of moving a business typically would negate any tax benefits a business would get for moving across state lines if those actually existed. Since the report on Oregon's business climate came out we already know those tax benefits don't actually exist.

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      Tell ya what, Michael. In 2-3 years, when there's data available, you get back to me -- and I'll GLADLY post it, right here at BlueOregon.

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      "Even if I wanted to move my business"

      I take it then that you don't want to move your business? Why not? After all, I keep hearing that the taxes here are awful!

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      So, set aside the lease for the analysis. Assuming that the property owner would let you leave right now, penalty free, show us where you'd go and how much you save.

      Looks to me like the F.U. of "six months" is now a P.U. of "2-3 years".

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    We have been asking the very same question of the resident #orcot crowd on Twitter and no one can answer it either. Not scientific either, but certainly entertaining.

    Coming from California, we have been stunned by how often the media is caught flat-footed up here in Oregon. I appreciate that you guys here dig a little bit and pose a question now and again. The media should be looking for these companies and stating the facts. And Michael, would you prefer no one asks? Because, other than Steve Duin and folks here, no one is.

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    I believe one of the main themes in terms of "business competitiveness" or "tax fairness" that has been left out of this conversation is the overall business climate, which includes more than the above.

    The business climate can be both factual, in terms of real costs, or anecdotal: what people perceive to be a business-friendly environment (or lack thereof) at a local, regional, or state level.

    Corporate and other state taxes aside, many other costs go into a business making a decision to expand, or relocate. One must realize that land costs, building and permit fees, system development charges, utility costs (sewer, water, power), and broadband/internet, all come into play - not to mention workforce and education.

    Facebook, for example, needed to locate in an area with access to power at a reasonable rate; access to dark fiber; ability to use city water and sewer; an available large industrial lot; and a cool, dry climate to use the outside air for cooling the facility. All of these costs are factored into the other fees or taxes that are charged at a local or state level.

    Based on the outcome - especially if several cities are competing for a project - a company will then subtract any incentives or concessions a community is willing to make. From experience, I can tell you that while overall costs may be the final decision maker, that's not always the case. A decision for a business owner to make a move has so many layers to it, that to blame it squarely on 66 & 67 is illogical.

    However, with the said, even business owners can be impacted by political perceptions. Even if a state has an "overall" lower tax burden, but the perception is the state leadership is moving in a direction where fees and taxes will only increase over time, this can impact a decision - fair or not.

    And another aspect that can't be measured is a community's responsiveness to business, and how all business factors are viewed. If a company feels welcomed and that a city/county/state is working to help them overcome roadblocks and find solutions - and actually wants them - that can go a long way in overall competitiveness. A continual move by policy makers at all levels to increase fees or taxes, can play into the perception by business owners that a state or community is more interested in taxes and fees than creating opportunities for employment.

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      One could make this "immeasurable" argument with respect to any policy direction. It could be argued that if the GOP were to regain control of the legislature in Oregon that schools would suffer. Businesses that include "good schools" in their criteria for moving might therefore consider Oregon to be a poor bet if, after November, it looks like we are trending back to GOP control.

      The point is not that there aren't "immeasurable" policy effects. Of course there are. But we can't make decisions based on "immeasurable" effects because, well, they can't be measured so how can they be included in the decision making process?

      If people are philosophically opposed to higher taxes on business I am down with that. I can even understand that point of view. But the opponents of 66/67 keep trying to make the argument that there is a "measurable" impact on the economy. All we are asking is that, if they are going to make that claim, they back it up.

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      "Even if a state has an "overall" lower tax burden, but the perception is the state leadership is moving in a direction where fees and taxes will only increase over time, this can impact a decision - fair or not."

      And when groups like the CoC and AOI set about, deliberately, to create that perception, for partisan purposes, what then?

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    Here's the lesson in how you take down the right wing false talking points. You force them to produce the facts. Kudos to Steve Duin. Real journalism, what a concept! Too bad the rest of the Oregonian doesn't practice that, or for that matter, 90% of the news outlets in the country.

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      Bill, the problem is that once you have made the talking points, it gets into people's brains (often because they want to believe it), and don't care about the facts.

      case in point - how many Americans still think Obama is a Muslim or wasn't born in America? The facts don't matter.

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    Chris,

    I think we're on the same page here; hence, the reason I said: "A decision for a business owner to make a move has so many layers to it, that to blame it squarely on 66 & 67 is illogical."

    I wholeheartedly agree that claims of 66 & 67 leading to a business exodus should be backed up with facts. My post was merely to suggest there are many other factors that are involved in the "business competitiveness" that hasn't been discussed.

    I do, however, stand by my notion that there are immeasurable and intangible impacts to business development that aren't always policy-driven. Relationships and personalities play a big factor in economic development and those aren't measurable impacts, as fees and taxes are.

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    Michael P,

    Unless your claim is that all businesses have the same lease arrangements that you do--that all leases are still in place--then you are wrong.

    Yes, your SPECIFIC case of not moving proves nothing. But that is not what is being asked here. This is, in fact, loading the dice as much in favor of the M66 opponents as possible.

    Show us ONE SINGLE CASE of a business that moved out of state due to M66. We're not asking you to show a pattern, a trend, anything.

    ONE CASE

    And still... the crickets are overwhelming...

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      The only thing I have said here is that it is foolish to draw conclusions about the effects of M66/67 without adequate data and that data will not be available for several years.

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        Fair enough, but the discussion is in refuting those who are claiming that there's a mass exodus. You can't both claim and exodus and also that the effect hasn't kicked in yet. Either businesses are leaving because of M67 now or they're not.

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          The vibe I am getting from this post and others is that just b/c the media hasn't profiled a business that is legitimately moving due to 66/7 that one side is saying "see, we were right." All I am saying is lets wait until we have some credible data before drawing conclusions.

          Do I think businesses will leave over the next few years, maybe a few. Will it be due to M66/7, I doubt it. Those crazy claims made by NO were just overblown hyperbole used to combat the overblown hyperbole of the YES side.

          BTW, I have never claimed "an exodus" at any time. Just b/c I sometimes question the echo chamber and challenge some widely held BO beliefs does not mean I am one of "those people" over on the right.

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    I glad BO is realizing Oregon needs entrepreneurs to create jogs.

    From a owners of small businesses point of view Chris, has it right but he missed many of the taxes and regulation burned we have in Oregon.

    This board would be shocked to learn how ENRAGED and ANGER that many small business have towards our government. You really have no clue!

    I would say small business hate the deep waste of time, money, and energy to deal with endless bureaucratic regulation. It's reg burden has grow rapidly in Oregon

    I'm on a industry board that right now the State has targeted to greatly increasing regulations, so they could greatly increase fees, they look to double is what I understand, the high salaried government official in charge knows almost nothing about the industry (I beleive two months hands on training) and now they're trying to increase regulations for the entire industry, worst yet they're in a hurry to complete it before the November election, because the case for higher fees might be shut due to new elected official.

    Most of the new regulations burden makes no sense, it doesn't even try to improve the standards of the industry, but it greatly improves the government coffers.

    You add these constantly higher fees, with increase employment taxes and insurance cost, my company health care cost just charge me 20% more, our very high state income tax, add property taxes going up in Oregon even when the business property value decreases, and top it off of course with 67.

    Now this board is saying we don't pay enough. Looking at the billions of dollars wasted, that includes fraud, waste, and unaccountability, with Oregon renewable resource department. Billions every year wasted all off balance sheet that many fell is illegal, and most understand off balance sheet is what killed Enron and Worldcom. Yet this board constantly uses Green energy as a poster child for Government success.

    To me this board is amazingly hypocritical. Saying their pro- business pro jobs, then at the same time hammering every single point asking for additional taxes and regulation.

    This is by far the most anti- business anti-job board I've posted on, but the surprise is you also claim your for job growth, more than most boards.

    Get off the fence and admit it BO is against job growth unless Government or Unions are involved.

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    I think this is a silly question. I hope it is clear to everyone that changes in tax rates change behavior. It may not be easy to measure, and it won't be the single issue when making a decision. But it definitely plays a part in business decision-making.

    Increasing taxes takes money away from other activities that could be used to grow the business, hire people, increase wages, etc. To think that it doesn't is illogical.

    I think the wrong question is being asked. Instead, the question should be:

    Have Measures 66 and 67 helped bring businesses and jobs into the state?

    Without a doubt, the answer is no. It has done absolutely nothing to promote business in the state.

    I would rather see our energy focused on how we bring more opportunity into the state instead of figuring out ways to tax those that bring them.

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      Have Measures 66 and 67 helped bring businesses and jobs into the state? Without a doubt, the answer is no.

      I wholeheartedly disagree.

      All you have to do is remember back to the Doonesbury incident to remember what it means for Oregon when our schools are closing in May.

      Intel lost a top recruit as an executive because he refused to put his children in Oregon schools.

      Measures 66 and 67 are helping - in a small way - to provide stability and adequacy to school funding. We have a long way to go, of course, but without 66 & 67, we'd be deeply screwed.

      When it comes to attracting and growing businesses, the quality of the workforce, the school system, the transportation infrastructure, and the court system all matter.

      And those are specifics before we even get into the broader milieu of "quality of life" and the kind of state that we all - including business owners - want to live in.

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      First two paragraphs = Like last four paragraphs = Unlike

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      Should be:

      First two paragraphs = Like

      Last four paragraphs = Unlike

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    Most folks in business make decisions based on a multitude of factors, not just taxes, not just workforce, not just rents. What is not being discussed here is that the decisions good business people make are based on the future more than the present. The business person looks forward and must predict what conditions he/she will face down the road. Most investments take years to pay off. Because of this, you make the decision to invest or not based on your view of what the future will do to or for that investment. Business people making a decision to relocate look forward as far as is needed to amortize that cost of the relocation. In my view, the passage of both 66 and 67 sends a message that this state will increase taxes and spend tax money faster than it did in the past. That is a trend that is not attractive to business. Any business that would move out of Oregon just because of 67 is highly suspect. Any business that considers moving to Oregon and does not consider 67 and the attitude it portrays is similarly suspect. In my view arguing that, for example, "Prop 67 caused six businesses and 42 jobs to leave Oregon last month" is a waste of time. We should spend this time looking at the things that have brought businesses here in the past and focus our energy on those things.

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    Ed, we're spending on BETC what we gained from corporations with Measure 67....and it IS bringing businesses to Oregon. The Governor outlines the moves of EnerG2 from Seattle and and Solexant from San Jose to Oregon in a recent press release. http://www.sustainablebusinessoregon.com/columns/2010/08/catching_the_next_wave_of_business_development.html.

    I've not officially seen any BETC for EnerG2, my guess is they will get $3.3 million, or an Energy Department loan. Solexant will get nearly $19 million, for its first 100MW line of thin film solar.

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      Jody,

      If "we're spending on BETC what we gained from corporations with Measure 67", then:

      1. The Yes campaign was based on a pretty big misstatement. The Yes campaign said that if we didn't pass 67, basic, essential services would be slashed. I am fairly confident 67 would never have been passed if the Yes campaign had been based on the money going to the BETC program.

      2. Taking money from businesses broadly to give to a class of business (the BETC businesses) that are politically favored, but that have not proven their competitiveness in the market, is exactly the wrong policy for building a strong business climate in this state.

      Bob Wiggins

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      So let me get this straight: You are taking money from my business, and giving it to another business. And you think this helps how?

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    How far is the goal post going to be moved back?

    First it was, "M66 and M67 will move businesses out of state."

    Second, "I know a small business in Bend that moved to Idaho because of M66 and M67."

    Third, "There are a lot of factors that go into whether a business decides to relocate including the tax increases from M66 and M67."

    Now, "Lets see the data in 2-3 years"

    2 to 3 years from now it will be, "lets see the data after 5 years."

    Fact is, individuals will find any instance to justify their belief of taxes = job killers. Whether it is Saks Fifth Avenue leaving Pioneer Place Mall in downtown Portland or some 5 employee firearms manufacturer leaving to Idaho, people use outliers to justify their beliefs in face of overwhelming data to the contrary.

    The best evidence opponents to tax increases can use is downtown Portland. Take stock of the businesses that were there in the 1970s, 1980s, 1990s, and 2000s, then correlate it with local tax increases, increases in City leases, increases in rent on City property, and increased regulation. It may not be causally related, but Progressives will have a hard time arguing against the correlation of local tax levies, lease increases, rent increases, and increased regulation = lost business in downtown Portland.

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    Since no credible news report has shown a business leaving the state in the past eight month due to the effects of M6/67, I conclude M66/67 "had no effect on businesses."

    There, is that what you wanted to hear.

    Let's see what other prognostications I can come up with using the same standards of data analysis:

    It is not raining right now, so we will experience a drought this winter.

    It is cooler than normal today, so we are in a period of global cooling.

    I am voting for Dudley, so he will be the next Governor of Oregon.

    Didn't you people take Statistics 101 in college?

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