Let’s Fix the Way We Give Away Tax Breaks to Big Corporations

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Tuesday night, the Washington County Commission and the Hillsboro City Council approved a 30-year, $2 billion tax break for Intel in exchange for the company agreeing to bring $100 billion in new investment to the state.

Intel Tax Break HearingIt was the largest deal of its kind in Oregon history, and it hopefully means keeping thousands of Intel jobs here for years to come.

But the deal could’ve been better for our community, and there still are things we can and should do to make this deal and others like it better for our schools and for the working families who will hopefully get these jobs in the future.

Here are four simple things we should do right away to improve the process going forward:

1. Make the whole process more transparent and give the community a greater role.

In general, the public should have a greater opportunity to participate in these discussions. Tuesday night’s public hearing was important to have, but the deal was done and no testimony had a chance to really change that. When something like a $100 billion agreement is happening to a community, we deserve the chance to really participate and shape the bargain to make sure it meets the needs of the community.

The goal should always be to make our community stronger at the end of the deal than when we started. We can meet that goal, but only if the whole community is involved.

2. Clarify the Strategic Investment Program language so that deals can only be for one investment for no more than 15 years.

The Intel deal was the first of its kind to involve multiple SIP investments in one bargain. This locks in all of the agreements for 30 years even though it will involve multiple different SIPs. This is clearly allowable under state law, but it’s not advisable. These tax breaks are massive, and the community deserves a chance to review each one to make sure that the deals are right for our community.

3. Put school money in a lock box.

This Intel SIP bargain leaves school kids empty handed. The way the deal is structured takes millions each year away from schools. If the deal treated schools fairly, classrooms would receive $4 million more per year from taxes and an additional $14-15 million more in income taxes. Instead, the bargain cuts out nearly $20 million from schools annually. Ask any parent: Our schools need those resources. We should change the rules to make sure that school kids are getting their fair share when any tax deal is struck.

4. End Gain Share.

Tuesday night’s testimony reminded me that one thing is definitely true: It’s time to end the controversial Gain Share program. Gain Share takes income dollars from the state budget and gives them to local governments that sign tax break deals. The idea is to replace dollars at the local level for needed infrastructure, but there often is no need. At the hearing Tuesday night, a number of commissioners made it clear that because this Intel agreement promises no new jobs, there were no new infrastructure needs. That’s why, they argued, schools were cut out.

If there’s no new infrastructure, then there should be no need for Gain Share. This program cost school kids, public safety, and health care services nearly $40 million in 2013-14, and the costs with this new deal are only going up.

The good news is that even though this deal is done, we can change the tax break laws we have now so the impact of this deal and others are muted right away. Gain Share isn’t a permanent program; the Legislature can change it. We can pass a law to protect school dollars right away, and it will be effective immediately, even on this Intel deal. We can add in more community involvement in the decision-making right now, and it will also apply for the investments Intel plans to make in the future.

This Intel SIP bargain is a good wake up call: We need to act now to build our community for the future.

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