Intel Corp.’s announcement that it will invest up to $8 billion in Oregon and Arizona comes as Oregon's gubernatorial candidates spar over how best to restart the state's economic engine, a cornerstone of both campaigns.
“Intel's investment is a sign that Oregon is competitive and remains a good place to do business,” said Democrat John Kitzhaber, in a statement. “It’s also a sign that the tools we developed in the '80s and '90s to help diversify our economy for new jobs, such as business tax reforms and the strategic investment program, still make Oregon an attractive place to do business.”
Ironically, the state’s strategic investment program — which caps business property taxes and was created in 1993 under Gov. Barbara Roberts — was created after Oregon lost an Intel plant to New Mexico. Since then, Intel has received generous tax breaks and is set to receive an estimated $121 million in tax breaks between 1999 and 2014.
While Kitzhaber says no one can argue the incentives offered to Intel “have been a worthwhile investment in Oregon and our economy,” he also supports a measured approach to enticing companies to expand or relocate to Oregon using tax breaks.
“All state incentives should be revisited on a regular basis to ensure that they are continuing to serve their stated purpose and that the benefit is still in the best interest of all taxpayers ... not just the individual or the business receiving the benefit,” Kitzhaber said.
Republican candidate Chris Dudley didn't immediately respond to a request for comment, but he's been critical of Oregon’s business climate.
“We need to restore confidence, competitiveness and capital to the state of Oregon. Our business reputation has been tarnished, to say the least,” Dudley said in a recent interview with the Business Journal.
Dudley said Oregon’s tax climate has hampered the state’s economy. He backs ofering more strategic investment programs like the one that has helped Intel grow in Washington County and cutting the capital gains tax from 11 percent to 3 percent for two years, then resetting it for 5 percent going forward.
“We’re talking about the highest capital gains rate in the nation,” Dudley said. “Across the river, a mile away (in Washington), we have the lowest. To think that doesn’t influence where capital will flow is naive at best and dishonest at worst.”
sstevens@bizjournals.com | 503-219-3480
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