Editorial: Focus on stable business-friendly environment

Published Dec 26, 2013 at 12:01AM

When Nike decided last year it needed tax stability to justify expansion in Oregon, it quickly got the governor’s attention and the Legislature’s approval.

But some legislators complained that their district’s small businesses were left out in the Nike deal. Why did the big company get a break that small ones didn’t? Why did one part of the state benefit and the rest didn’t?

It’s time for the state to focus on the needs of rural Oregon, but that doesn’t mean giving small business the same deal Nike got, because the needs are different. The focus should be on effectiveness, not a simplistic concept of fairness to small vs. big business or rural vs. urban regions.

Nike sought and received a 30-year commitment that it won’t be affected by possible changes in the so-called single sales factor in state tax law. It means the company will continue to be taxed only on sales within Oregon. In exchange, Nike promised to create 500 new jobs and invest $150 million in the state.

The state’s rural areas are in trouble, with high unemployment and stagnant economies. State economist Mark McMullen recently warned the problems could worsen if young people give up and move away. The answer doesn’t depend simply on a single type of tax structure.

Solutions involve traditional issues such as logging, tourism and agriculture, as well as broadening the economic base with new types of business.

One issue, though, is the same everywhere: A thriving economy depends on business development, which in turn depends on predictable taxes and regulations. A business-friendly environment is a stable one that allows companies to plan effectively.

Nike’s focus was a particular narrow piece of tax law that may be less important to smaller companies. The key to effective legislative action at this point is determining how to create conditions that will allow private investment to invigorate rural Oregon.