I testified against the "Intel SIP deal" before the Washington County Board and the Hillsboro City Council. So did Jody Wiser of Tax Fairness Oregon and my friend Dale Feik, WC CAN's emissions committee chair.
What's most disappointing is that the process by which the deal came down was a closed door process from March to just a week ago, driven by "non-disclosure" agreements signed by local government officials at Intel's demand. Transparency is out, open meeting laws are out and accountability is out - the "deal" is virtually signed sealed and delivered.
Intel's tax breaks: Hillsboro City Council hears support and opposition to deal
If you want to speak out against this violation of open government attend next Tuesday's public hearing August 26th at 6:30 p.m. before a joint session of the county board and Hillsboro city council in the Public Services Building in Hillsboro. It will be your last chance to speak out before the skids are greased for Intel for the next 30 years!
Welcome to the "new" Oregon, a wholly owned subsidiary of Intel.
In the wake of the Intel deal for more SIP money, the editors of the Oregonian have the audacity to admit Oregon needs an additional revenue source - their favorite tax - a sales tax. Now Oregonians have voted down a sales tax 9 times, how clearer could it be that this is a road nowhere? This is merely the Oregonian's way of hiding behind the fact that the negotiated Intel deal - which is not consummated yet - is an outrageous shakedown of Oregon and it's voters.
Giving Intel a 30 year deal which relieves them of property taxes by only taxing the first $100 million of the value of what's reported to be over 2 billion in new machinery is a rip off of gargantuan proportions. It will continue to place an unfair burden on those who get no 30 year breaks on their property taxes - renters, home owners and small business. And it will mean over the 30 years there will be less money for schools and other public services but of course not for the TROIKA's pork project - a community center!
This get worse the more you learn about it - check out Mike Rogoway's latest analysis:
As Washington County and Hillsboro officials prepare to vote on that deal late this month, the remarkable duration of Intel's new tax package has become a focal point for those weighing the agreement. The pact, announced last week, would exempt up to $100 billion in equipment from the property taxes that other businesses pay.
The agreement would save Intel something like $2 billion over the life of the deal and effectively lock in the company's tax structure through Super Bowl LXXX. Compensatory payments – minimums Intel agrees to pay to compensate local taxing authorities for the foregone revenue – aren't indexed for inflation, so their value will drop substantially over the years.
When Rogoway, touting the editorial board line, after all they pay his salary - claims that "even critics of this deal are broadly supportive of tax breaks on the monstrously expensive equipment that outfits the chipmaker's multibillion-dollar Washington County factories" who is he talking about? He never asked for my take as WC CAN's VP and Senior Policy Analyst. His reference to Tax Fairness Oregon's position is a slight of hand comment.
"As with previous SIPs, Intel agrees to make an annual payment of $2.87 million, pay a $2 million community service fee and donate $100,000 year to charities selected by local elected officials. The abatements apply only to the value of equipment and machinery beyond $100 million, and will not affect taxes on land and buildings. According to a report by ECONorthwest on Intel's economic impact in Oregon, the company paid $20.8 million in property taxes in 2012 on land and buildings."
Notice the "framing" of the property abatement reference above - "apply only to the value of equipment and machinery beyond $100 million...? Such a deal, Intel is taxed only on the first $100 million but not the rest of the $2 billion.
For a multi-national corporation with a over $9 billion dollar revenue stream this year, the annual payments, community service fee and donations to charities are "chump change" - the latter a slush fund for local officials to divy out - what is termed "pork" in DC. While Intel paid $20.8 million in property taxes - it paid no state income taxes. Forest Grove's School District #15 has a current general fund for 2013-14 of $54.1 million dollars.
What's Intel's contribution to our schools? Oh yeah, Gains Share money which comes from income taxes on their employees... What a trick, Intel pays the $150 minimum state income tax, their employees pay income and property taxes and Intel gets huge property tax breaks.
In 2013-14 Washington County's total budget was over $737 million. If one adds the total budgets of Beaverton and Hillsboro, these local governments added to the county budget come to $1.3 billion. Intel's $20.8 million in property taxes equals 1.6% of these three local governments most impacted by Intel.
This does not factor in the budgets of other local districts to which property tax payers support - local school districts, special districts, Metro, PCC et al. Factoring these into the budget equation lowers Intel's contribution even lower than it's 1.6%.
According to an EcoNorthwest report, the last year Intel paid state income taxes in the mid-90s the price tag was $50 million. Those were the days! Those records are no longer available to the public! Intel's motto - "transparency is not us!" They lie about emissions and they hide what they used to pay in taxes!
If one adds up the school budgets of Washington County's other local school districts - Beaverton, Tigard, Hillsboro, Gaston, Banks, North Plains and Sherwood an additional $20.8 million is a drop in the bucket. Then consider the budget challenges of local cities which are impacted by infrastructure demands placed on them by Intel's 17,000 employees (not to mention NIKE) - it doesn't add up. Intel is not paying its fair share nor is NIKE,
When one looks at the Oregonian editorial board's list of things we need to do to keep Intel and NIKE in Oregon the future demands over the 30 years of this "deal" just zooms like a rocket.
"In Hillsboro, that means continuing to increase the housing and civic options for employees at Intel and other companies who would live closer to work if the amenities they desired were available."
RAD: In Washington County apparently Intel employees are more equal than other employees!
I pay property taxes to support my local schools, my city government, METRO, the county, PCC, the ESD, Clean Water Services, the Port Authority of Portland and special levies for school construction, county roads, public safety, libraries, parks and green spaces. What's Intel's contribution to these taxpayer supported programs? After all "corporations" are legally persons, right, so they should pay like you and I do, right?
We know what happened to the economy when "banks too big to fail" got fat and sassy. As US Senator Elizabeth Warren says "the system is rigged."