Only 10 new jobs are promised in Google’s new tax deal in The Dalles, prompting complaints from Tax Fairness Oregon that each job is costing taxpayers $700,000 per year.
The criticism misses the point, ignoring the multiple benefits the deal would bring to The Dalles and Wasco County, which are scheduled to consider the proposal early next week.
Google came to The Dalles seven years ago and built two 94,000-square-foot data centers, according to The Oregonian newspaper, with tax breaks worth $100 million, investment of $700 million and about 150 employees and contractors.
Under the original agreement, Google paid $280,000 upfront and $250,000 annually. The Oregonian determined that franchise fees resulting from its electricity use sent $340,000 annually to The Dalles, which constituted 7 percent of the city’s general fund revenue.
The new deal would require a $1.2 million initial payment, and $800,000 a year thereafter, split among the city, county and schools. In addition to 10 jobs paying more than $50,000 each, Google agrees to invest at least $200 million. In return, the company is exempted from property taxes on its new building and equipment, with the amount saved varying depending on how much it invests. Plans are for a larger building of 164,000 square feet.
Data centers have also come to Central Oregon, where Facebook and Apple have invested in Prineville and received significant tax breaks. The Oregonian reports that a project is planned at the Port of Morrow by Rackspace, a data- hosting company.
The tax breaks granted to Google and these other companies don’t represent lost revenue to local governments, because the development wouldn’t happen without them. Plenty of other communities are prepared to offer similar deals. Evaluating these agreements, therefore, requires looking at the totality of the benefits gained.
Ten good jobs, plus the temporary ones for construction, are no small matter. But they’re only one piece of the package, which has multiple benefits for the community. If critics seek to stop them, they need better arguments than a small number of jobs created.