More Handouts to Big Corporations, Part 2

Corporate HandoutsDespite the overwhelming unpopularity of tax breaks and taxpayer handouts to large corporations, it seems that some Oregon legislators really want to find ways to give away public resources to big businesses that don’t need the help. 

And it’s Oregon’s most struggling communities who’ll pay the price. 

A handful of bills are still alive in the Oregon Senate that would create or expand complicated schemes that resulting in a boon to private corporations at the expense of money still-underfunded senior services.

Here’s Part 2 of our two-part series:

Senate Bill 246A and Senate Bill 253A:

We’ve written about these bills before and they’re still around, having been amended to be even broader. In fact, the Ways and Means Subcommittee on Transportation and Economic Development is holding a hearing on these bills this Monday at 1pm.

What it boils down to is this: SB 246A would give away forgivable loans or subsidies to counties to develop “industrial-ready” lands. The subsidies would cover up to half of the costs for things like land purchase, grading, environmental mitigation, brownfield cleanup, infrastructure, etc.—all things that should be considered a cost of doing business by the corporations who will profit from the land, not covered by taxpayers.

The state can cover these costs either by forgiving half of the loan, or by returning half of the income taxes paid by the company’s employees until 50% of the projects costs have been recouped. If you’re an employee of one of these corporations, you’d pay your full income tax to the state, but then the state would kick back half of it to the project’s sponsor.

Fun Fact! If the business is also in a SIP under Senate Bill 223 (see the previous post), the state would lose 100% of income taxes from the employees.

There are many more problems with the bill. One of the biggest problems is the complete lack of accountability to make sure that jobs are actually being created. In order to qualify for this program, a company is only required to create one (1) job.

And even for the jobs that do get created, the company is only required to pay either the county average or the state average—whichever is less. That means that in Washington County, where most of this benefit would go, companies could pay just $44,000 (the state average), well below the county average of $56,000.

The folks at the Audubon Society of Portland have also come out against this bill (pdf) because it puts taxpayers (you and I) on the hook to pay for the cleanup of environmental damage caused by private industries. If taxpayers pick up the tab for environmental cleanup, it undermines the critical principle of “polluter pays” and does away with the incentive for private industry to limit their ecological damage. After all, if taxpayers are going to come along and clean up their mess, why should any corporation worry about the destruction they’re causing?

A separate bill, SB 253A, would provide grants of $100,000 to these businesses to help them research possible land to develop. This activity is well within the scope of a regular business expense and should be covered by the corporations who stand to make a big profit.

In fact, much of that grant money could just be going to waste, as many of the lands that could be developed have already been surveyed and researched. Using tax dollars to redo that work is wasteful and just another public handout to big private corporations.

The benefits from these bills are primarily going to Washington County. At the same time, we have former timber counties all over the state that are on the brink of collapse, and lives are hanging in the balance. Why should we be handing over millions of taxpayer dollars to subsidize big corporations in well-off counties, and leaving struggling families in rural counties fending for themselves?

The millions of dollars that the state gives away through these handouts would mean fewer dollars going into our classrooms, senior care, and critical community services.

As ever, it’s all a question of whose priorities are being protected. When it comes to Senate Bills 223, 246, and 253, it’s clear that the priorities of corporate lobbyists—not working families—are winning out.

These bills make the state of Oregon a sucker. Taxpayers would provide a windfall for landowners and developers and then potentially not get any income tax revenue in return for the investment.

There are many who say that government should be run like a business. But no credible business would ever shake hands on such a loser deal.

2 Responses to “More Handouts to Big Corporations, Part 2”

  1. Ed

    C’mon now, name the culprits. Who is sponsoring these bills, and who in the Legislature is pushing them?

    Reply
    • Jody Wiser

      Rep. Read and Senator Beyer call Industrial Land Readiness bills theirs. Both are Democrats. It idea is being pushed by the Portland Business Alliance, Metro, the Port of Portland, and many cities and local economic development offices. Why not, they’ll get free money.

      Reply
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