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Jobs Watch: The phantom exodus

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Ben Jacklet
Wednesday, March 24, 2010

The Oregonian took the unusual step this morning of running a front-page business story about an unnamed executive, CEO of “a successful technology company southwest of Portland employing hundreds and boasting a bright future.”

Was he unnamed because he is participating in the witness protection program?

Hardly. He’s thinking of skipping town.

The gist of the story is that this phantom executive is considering gathering up his highly successful company and leaving Oregon, leading a devastating mass exodus of talent and capital, all because of the tax increases passed by the voters with Measures 66 and 67.

Well, here’s my own personal message to Mr. Phantom CEO: Don’t let the door hit you on the butt on the way out.

It’s not that I don’t care. I care deeply about the state of Oregon’s economy and would hate to see our job market deteriorate further. But the votes are in and the law is the law. And guess what? Oregon’s tax burden on businesses is far from the worst. It’s right there in the middle of the pack. Personal income tax is high, but that’s because Oregon has no sales tax. The end result is an imperfect but admirably progressive tax structure.

But it’s not the objective numbers that matter, apparently. “The far greater damage,” investor David Chen told the Oregonian, “is in how it disenfranchised business.”

Disenfranchised? Really? Did someone lose the right to vote?

Hardly. They just lost the vote. That doesn’t make you disenfranchised.

Now the states of Idaho, Utah, Montana and Ohio are joining our scavenger-like neighbors in Clark County and the grandstanding mayor of Chicago in welcoming Oregon businesses to move to greener pastures. The only problem is, their pastures aren’t greener, and their cities aren’t better for business. Anyone considering a move to any of those locations should consider the old adage that you get what you pay for. The winery tours aren't quite the same in Utah, and the Ohio Coast doesn't really compete with Oregon's.

My qualm with all of this after-the-vote crying of wolf is this: It does not help. As anyone who tracks real estate or the stock market understands, perception matters. Sending out apocalyptic messages that Oregon businesses are so fed up that they might even move to Idaho is not helpful. Vowing to take your hundreds of jobs and abandon the community that helped you build your company is not helpful either.

Especially if you don’t have the guts to sign your name to it.

Ben Jacklet is mangaging editor of Oregon Business.



0 #1 The Exodus Already OccurredLisa 2010-03-24 11:52:48
Mr Jacklet is closing the door after the horse left the barn. As Phil Knight noted, many businesses fled long ago and the few that held on are probably wondering why.

As to staying in a state that is hostile to business for sake of trips to the coast or wine tours, you can pound sand but you can't eat it.

The issue isn't simply the additional tax burden but the deception used to sell it. Claiming that companies "only paid $10" in taxes doesn't tell the whole story. Businesses that do not have income are paying employees and owner who DO pay taxes! And at a higher rate than paid by corporations. So now the high paid executive is going to take his tax dollars and leave. Great thinking Oregon!

I was born in this state and I love many things about it but when the economy improves enough to sell my house you can count me gone too.
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Novella Swisher
0 #2 Phantom ExodusNovella Swisher 2010-03-24 11:59:07
FYI ... Steve
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0 #3 just waiting for the right timeAly 2010-03-24 12:00:12
I have a feeling that the managing editor has never owned a business and actually been responsible for other people's pay checks. When you penalize hard work and advanced education as we do in Oregon now with a tax on the "rich" you dissuade those with innovation and vision from setting up shop here. As far as wineries and the ocean go, I can take a plane any where I want. I was just in Napa and we also have a place in Kansas that is a quick three hour flight to the coast. As soon we as our next one graduates high school we are looking for a state which appreciates the risk that entreprenuers take. The other clincher for us has been the incredibly high unfunded pension liability for PERS that we will all have to pay for the ridiculous state exhortion contracts that SEIU has wrangled from our legislators. Apparently we are the cash cow.
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0 #4 Don't lit the door know punk you on the way outcadgbd 2010-03-24 12:12:48
When OregonBusiness goes south and Ben Jacklet falls into the pit that he has smugly dug for others, don't let the door know punk you on the way out...no wait...he'd like that.

The Portland progressives will be pay some heavy karma
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0 #5 Let me guess..sandy 2010-03-24 12:27:39
Ben, do you live in East Multnomah County by chance? And does your spouse benefit from PERS? Hmmm.... thought so.
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0 #6 PresidentJon 2010-03-24 12:35:56
I would like to make a comment on the idiotic comments that are shown here by the unaware people that seem to think that Oregon is 'great for business'.

As an entrepreneur for the last 25 years that has started several businesses in several states I can most certainly state that Oregon, while not 'the worst' state to have a business in, certainly is not a favorable one for business.

Wouldn't it be best to stop defending a bad business incubation status and start figuring out a way to be more progressive to bring businesses into the state? The liberal state seems to think that money grows on trees! Let's be honest. It does not!! Unless the liberal, tax and spend government of the state and the cities figure out this simple fact they will continue to tax those 'rich people' (who by the way love this state and are willing to start businesses here as long as the state has favorable incentives) and those rich folks will go across the river or to other states that 'get it'.
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Kelly Sills, Economic Development Manager, Clark County
0 #7 We Welcome BusinessesKelly Sills, Economic Development Manager, Clark County 2010-03-24 13:02:01
Dear Mr. Jacklet --

Just thought I'd confirm for you what so many business leaders already know, that Clark County heartily welcomes businesses on the other side of that door which, as you indicated, is hitting butts as they exit Oregon. If Clark County’s welcoming attitude makes us a "scavenger-like neighbor", well that's okay, because business success is the bottom line. Business leaders are rational people, and when they relocate their business to Clark County they do so for rational, success-oriente d reasons. When businesses unhappy in Oregon choose to relocate to Clark County, that is a better outcome for both sides of the Portland-Vancou ver region because at least then we don’t lose them to Montana, Nevada, or Idaho. And as you indicated, perception matters. Perception can often trump facts when it comes to business location decisions. In that regard, I was saddened to see that your missive did not serve to strengthen business perceptions about Oregon. I hope in the future you will share more positive, supportive perceptions about businesses in both Oregon and Clark County.

Kelly Sills, Economic Development Manager, Clark County
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John A. Ward
0 #8 Job WatchJohn A. Ward 2010-03-24 13:05:02
Oregon is more like 36-38th out of 50 states, which is NOT in the middle, try bottom quarter. There are more taxes and expenses than sales tax and income tax, even states with no income tax do have taxes that affect business, to be so far down the list isn't a benefit. Also the taxes Oregon does have hit the small business particularly hard, good place to retire, NOT a good place for a growing business.
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0 #9 Small business ownerSterling 2010-03-24 14:06:47
Unfortunately attitudes like the author's are only too prevalent in the pages of the Oregon Business Magazine. Why is this guy still associated with the organization? I own a small business and have brought out of state money to one of the rural parts of this state for over 20 years now, and no thanks to attitudes like Jacklet's, many small business entrepeneurs like myself will be either closing business, downscaling or moving out of state. He does not have a clue what he is talking about. I pay taxes in another state as well, and Oregon's taxes are off the wall.
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0 #10 Last Person Out, Plese Shut Off The LightsDRC 2010-03-24 14:12:44
Mr. Jacklet: How many Fortune 500 Companies are left? Remember Georgia-Pacific , Evans Products, Willamette Industries, among others? This Robinhood nonsence has been rampant for way too long in Oregon and the Northwest and the results are becomming all too evident. Many who are threatenting to leave WILL leave and I don't see many waiting impatiently to either move their company in or start-up a new company. Too many business are weary of being the water carriers as those who want only to "drink" the water sit back and dictate how the richie-rich will pay their way. Unless it changes, you may be the last one standing to flick off the lights!
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Ken H
0 #11 Leaving OregonKen H 2010-03-24 14:57:25
You know.....
They passed the corporate tax. Gives the State more money.
They raise they minimum wage each year. Gives the state more more.
They raise the Auto Property Liability from $ 10,000.00 to $ 20,000.00. Most don't know but the State gets there little cut. More money for them.
Lets see, my property values dropped but my property tax went up. Dahhhhhh.
It goes on and on.
We are not making any more. We are making less in this economy. Maybe its time to start cutting some of the high cost State Employees.
Maybe its time to fire the one that says Don't let it hit you in the Butt. Not a good attitude to have in the business world. Maybe you should fire him........and get someone that is on the small business side.
Don't think I am going to re-subscribe to this magazine.
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0 #12 This guy works for a BUSINESS mag?Annette 2010-03-25 12:22:54
You're kidding me, right? These comments from the editor of a magazine that supposedly discusses and understands business climate? It's particularly troubling that when business owners express their opinions and personal accounts of how a deleterious new tax affects their businesses, Mr. Jacklet responds with, "it does not help." The inference here is that business owners should either shut up and suffer in silence or leave the state. This thinking is flawed on so many arrogant levels, I couldn't even begin to address them all - but what I CAN do is guarantee at least two subsciptions that won't be renewed.
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0 #13 Don't let the turkeys get you downSteve 2010-03-25 14:36:02
Mr. Jacklet, keep pointing out the fallacies of the anti-government crowd, which seems to have stormed the comment line here. The folks above don't seem to understand the facts - that Oregon continues to have low total taxes for both businesses and wealthy individuals, and that talking down your own state is like fouling your nest. They have fallen for the phony propaganda funded by the anti-government , anti-tax and mega-corporate crowd opposing the ballot measures.
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0 #14 About time!maxgramm 2010-03-25 15:37:17
I've looked at the corporate tax rates in Idaho, Illinois and Clark County. And its pretty clear that businesses here are paying less than they would in those three states overall.

Jacklet expressed frustration that the Oregnian wrote a story about a phantom executive who refuses to be named and says he may or may not be leaving. On the same day they put that specious story on their front page, they put the story about NOAA going to Newport and the economic benefits that brings on the Metro page.

Where is the front page story on Ferrotec coming to Oregon, Facebook to Prineville or the Bend call center announcing 200 new jobs? Truth is we've had more business expansion since the measures passed than businesses leaving Oregon.

Look, the global economy is in trouble. But Oregon is actually faring better than most other states. Daley and Otter would stop with this nonsense of trying to recruit here if they didn't get a sympathetic ear and this continued cacophony of chatter coming from those who opposed the measures. Because the truth is those states have got nothing better to offer.

The Oregonian said Idaho has reported that all of ten businesses had called to inquire. TEN!

It's time to put the campaign behind us.
It's time to work together to get out of this economic mess.
It's time to stop blaming the state for the global recession.

Anybody notice our unemployment rate keeps ticking down, a little at a time?

We are recovering from the recession and we will recover even faster when we put Measures 66 and 67 behind us.

Thanks for saying what a lot of us have been thinking, Ben.
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Exit Oregon
0 #15 Don't let the door hit you on the butt on the way out.Exit Oregon 2010-03-26 10:24:18
Mr. Jacklet's take on the businesses thinking of leaving for more business friendly states? "Don't let the door hit you on the butt on the way out."

That's a pretty surprising sentiment from a business magazine. But it's not all that surprising from Oregon Business magazine.

Over the years, Oregon Business has been the model of milquetoast reporting. Everything is awesome in Oregon and business is booming! Green! Sustainable! Wine! Streetcars! Windmills! It's all awesome! Taxes are low! Children are smart! Government is savvy!

I have long since given up on Oregon Business to report on Oregon's business environment. Maybe that's why the only place I see the magazine is in the doctor's office nestled between Highlights for Children and the AARP magazine.
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0 #16 Data, please, not spleenssomo 2010-03-27 09:19:01
Same comment I made on the Oregonian article...

"Tax Foundation ranks Oregon #14 out of 50 for its business tax climate: http://www.taxfoundation.org/taxdata/show/22661.html

Which means Oregon is still ranked better than Idaho & Illinois."

I'm surprised that the caliber of comments here is not much better than at the Oregonian site. Too much spleen, too little data.

The main complaint I hear from my business-owner friends is not tax rates but how fragmented & hidden the red tape is for business.
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0 #17 Red tape, indeed.pacnwjay 2010-03-27 16:26:04
As a small business owner in Oregon, I have no problem with the taxes in our fair state. But the regulatory hurdles, paperwork and constant "hoop jumping" is ridiculous.

Oregon could easily incentivize doing business here by taking their cut -- THEN GETTING OUT OF THE WAY.
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0 #18 Thanks the the editorialKen 2010-03-28 06:41:26
Thanks for having the courage to call out so-called business leaders who are not willing to pay their fair share of the costs of running government.

How do they think their workforce gets educated? Who maintains the roads they and their employees drive to work on, and that transport their goods if they provide a physical product?

When these "rugged individualists" build their own schools, their own roads, take care of old people with their own private money etc. etc. I will start taking them a little more seriously.

I'm also tired of hearing that Oregon's economic challenges are caused by high-taxes. I believe that California and New York are fairly high-tax states, yet they are home to large numbers of major companies, and are global leaders in some industries.

Oregon's real problem is that historically the state has been dependent on resource extraction, and has not made the leap to the modern world in which human capital is the largest determinant of economic success.
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0 #19 Taxes-easy excuseJasonnotJayson 2010-03-30 17:27:19
Claiming you are taking your business to another state because of taxes is a convenient excuse, especially now.

Why doesn't the nameless business leader say why he really wants to leave Oregon? Put the word "taxes" in a newspaper headline or quote and it will generate everlasting pr, even if it's baseless.
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