Just when Oregon should be trying to encourage economic development, an ill-conceived bill threatens to make it harder for businesses to invest in the state.
Business Oregon, the state’s economic development agency, tries to sell businesses on coming to or expanding in Oregon by pushing the advantages of what are called enterprise zones.
In an enterprise zone, new or expanding businesses can get total exemptions from property taxes or equipment for usually three to five years. There are a number of requirements for a business to qualify, including creating new jobs.
Many Oregon communities have the zones. They get them for good reason. An area must be suffering from some sort of economic hardship to get one, such as a relatively high unemployment rate. If there was no enterprise zone in Prineville, it may never have been able to lure Facebook and Apple to locate and expand big multimillion-dollar operations there.
But House Bill 2408 is out to cut the legs out from under Oregon’s enterprise zones. It would redefine private construction in an enterprise zone of more than $20 million as a “public works” project if there is a property tax exemption. That means any contractors on a qualifying private construction project would have to pay jacked up wages — called prevailing wages — as if it were a public project.
First of all, it’s just silly to redefine a private construction project as a public project. It’s not.
Second, it will intentionally make construction more expensive and, thus, Oregon’s enterprise zones less attractive.
In Central Oregon, there are about 10 projects that would likely be undermined by HB 2408. If it kills them, the region could lose more than 500 good jobs and some $400 million in new property tax base, according to Roger Lee, CEO of Economic Development for Central Oregon.
Want to make Oregon less attractive to business? Want to hurt the ability of Oregon businesses to expand? House Bill 2408 is a poison pill for enterprise zones and the state’s economic development.