You don't need an ESI laser or higher ed degree....

Chuck Sheketoff

In today's Oregonian Electro Scientific Industries president and chief executive officer, Nick Konidaris, wrote that Oregon has "two choices" to address the problem that Oregon's universities are producing only half the engineers and technologists that Oregon's industries need each year, "recruit engineers from outside of Oregon or move much of their development to other states or countries." He notes that "[t]he first choice is bad for Oregonians and, considering today's global options for talented engineers, uncertain in its outcome. The second choice is bad for Oregon."

He then offers up a third choice "investing in engineering and technology education." How much does he want to invest? As chair of the Engineering & Technology Industry Council he's calling on the Legislature to invest $34 million over the next two years. He notes that the Governor included only half that in his proposed budget, and that the co-chairs of the Joint Committee on Ways and Means recommended only $10 million, $24 million less than what the Council wanted.

Kondaris wants the additional revenue in the May revenue forecast allocated to cause.

What Konidaris refuses to admit, however, is that the very industries that would benefit most from that public investment in the public structures that provide them with engineers are not paying their fair share of taxes to support that public investment. ESI, Intel, Nike and others successfully changed Oregon's tax law to avoid paying taxes on their profits. The move to single sales factor apportionment is costing Oregon about $70 million in the upcoming biennium. At the Oregon Center for Public Policy, we conservatively estimate that Nike "saved" over $16 million in state taxes on its 2006 profits from "single sales." Intel used to pay over $50 million a year in taxes, and now they are likely a $10 a year taxpayer because of the move to single sales. Konidaris could tell us ESI's "savings."

It doesn't take a higher ed degree or an ESI measurement device to figure out that Oregon could fully fund the investments that the Engineering & Technology Industry Council seek if the companies that would benefit the most would return to paying a reasonable level of corporate taxes on their profits.

  • JMG (unverified)
    (Show?)

    What, you want a business to internalize costs that it could be grabbing from others by playing states and countries off against each other? What kind of a commie pinko are you?

  • krothi (unverified)
    (Show?)

    There's multiple problems with the lack of engineers being "produced" in the state of Oregon. There's also a space problem in the classrooms where that training occurs. As a math instructor at Mt Hood Community College, the word I hear is that many of the engineering programs available around the state are maxed out in terms of capacity. Mt. Hood hasn't built a new building since the 70's. So even if more students suddenly took an interest in engineering there's no gaurantee there would be a seat for them in a nearby school. Here in Gresham, voters have turned down every bond measure for the past 30 years and the school had to take out a loan recently to repair leaks in the roof of one of our buildings, which houses an enormous investment in machine tool technology. The Early Childhood Education program is still housed in the same "portable" buildings that they were moved into decades ago. Throwing money into programs without a corresponding state investment in infrastructure seems like a wasted effort. The local community is not always willing or able to invest in the kinds of capital expenditures required for new buildings. There's got to be a better way to get schools the financial resources they need to develop, grow and maintain programs critical to the state's economy than to make the school's faculty and staff waste thousands of dollars and countless hours campaigning over and over and over again. It's time for the legislature to figure out how to stabilize school funding, K-16, and replace the revenue lost with the collapse of the logging industry.

  • Tom Civiletti (unverified)
    (Show?)

    Oh, Chuck, that kind of reasoning is not welcome whatsoever by the economic powers that be in Oregon. They'd much prefer somebody, anybody, else pay to train their workers, even if that happens in Washington or India.

    And as long as those engineer-employing corporations can make unlimited political campaign contributions, the present situation is not likely to change. Hold on, didn't you oppose Measure 46, which would have established the right of Oregon voters to limit campaign contributions?

  • JB (unverified)
    (Show?)

    OK. If this legislature won't deal with the corporate minimum issue, what kind of ballot measure would be needed to rectify the situation? Would it be a measure to somehow force a return to the good old days when the corporate income tax constituted a significant percentage of the General Fund? How could that be done? Why wouldn't a majority of Oregonians vote for that? The fact that Intel might be paying $10 a year in corporate income tax is absurd. Oregonians should be outraged.

  • Tom Civiletti (unverified)
    (Show?)

    JB,

    The important questions are:

    • Who would pay to collect the needed signatures? [By the way, administering an all-volunteer petition drive is MORE expensive than paying signature gatherers.]

    • How long would it take the Legislature to override the peoples' decision, as has happened more than once when wealthy interests were unhappy with successful ballot measures? [See history of measures prohibiting profit on non-operational electrical power plants.]

  • (Show?)

    Tom, I opposed M46 because of the supermajority provision (see http://www.blueoregon.com/2006/10/why_meek_should.html which is the very reason the Legislature today can't pass meaningful tax reform that would get corporations to start paying a reasonable tax on their profits (and would update the corp minimum tax and eliminate silly tax breaks). Because of the 2/3 requirement the Leg is not even considering using any or all of the $1.222 billion personal kicker (the $1.167 billion plus the interest to pay the loans to send the kicker checks out) to meet the needs of higher education, human services, state police and other public safety. And the 3/5 requirement is what stopped the tobacco tax increase to fund the Healthy Kids plan, and is stopping an effort to modernize the beer and wine tax. Oregon needs to stop giving power to the minority.

  • Tom Civiletti (unverified)
    (Show?)

    Chuck,

    The reason for the super-majority provision was the history of legislatures repealing campaign finance reform enacted by voters [Massachusetts, Colorado, Missouri, and others]. A simple majority could always have referred a measure to the voters. This is substantially different than the situation with tax referrals, which voters are quite unlikely to approve.

    In reformer school I learned these things:

    • Don't make the perfect the enemy of the good. There is unlikely a majority that will agree with every detail of any piece of legislation. You may have noticed that the Legislature has not proposed a substitute constitutional amendment to do what M46 would have done, and neither have any of the progressive groups that supposedly support campaign finance reform but opposed M46 circulating their own CFR initiative petition [of any kind]. M46 was likely our only chance of significant reform for several years to come.

    • It makes more sense in the long-term to eliminate the undue power of wealth over politics than to ask wealthy interests to treat the rest of us better because they should. The poor may sometimes act contrary to their own interest due to lack of good information. The wealthy pay to make sure they have the information needed to always act in their own interest. Why should Intel pay to educate engineers in Oregon when they can import educated engineers or export engineering jobs? As long as Intel ]Nike, PGE, AOI, et al] can make big campaign contributions, it is unlikely that big business will pay its fair share of taxes. Measure 46 would have changed that.

  • (Show?)

    The corporate minimum is not a dead issue for this session, precisely BECAUSE the threat of a ballot measure has been floated in Salem...and they don't want that. Right now, they are debating four different proposals for the corporate minimum. Considering that the three biggest business associations in Oregon have declared support for raising the corporate minimum, I still can't figure out exactly where the opposition is coming from.

  • (Show?)

    Oregonian73 and others:

    While raising the corporate minimum ought to happen, that would not address the problem of profitable corporations not paying a reasonable income tax on their profits. Intel used to pay $50,000,000 a year, and the Leg is looking at capping corporate minimum taxes at $25,000 to $50,000. What's needed is tax reform, not just a fix to the woefully outdated corporate minimum tax.

  • (Show?)

    Chuck, I very much agree. Keeping our heads in the sand over the need for tax reform in this state will only continue to bite us in rude places. I was just pointing out that the corporate minimum conversation was still going.

connect with blueoregon