The NY Times reports that city councils and county commissions that are “short on tools to fact-check what companies tell them” are nevertheless cutting deals with multinational corporations in a desperate bid to create jobs. These companies exploit fears held by our own local leaders that without tax incentives, they will locate elsewhere and in Oregon poor communities like Coos Bay are giving away a staggering $665 million annually in property tax abatement alone with no method of tracking the payoff to the taxpayer.

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.

“How can you even talk about rationalizing what you’re doing when you don’t even know what you’re doing?” said Timothy J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.

US taxpayers finance companies to the tune of $80 billion annually and in Oregon we pay $226 per person to fund property tax exemptions, $190 million in corporate tax credits and $7 million in cash grants for a total $865 million annually in the name of economic development and job creation. Oregon actually receives more revenue from lottery funds than corporate income tax.

Texas, number one on Al Pettit’s list of business friendly states, gives away $19.1 billion each year but has a higher poverty rate and more dismal jobs record than Oregon. States with high incentive programs simply do not show the results to justify their continued existence and yet the mythos that jobs are created through this type of taxpayer investment continues and no where stronger than in Coos County.

ORC is one of those companies that promised long term jobs in exchange for tax benefits. According to the Coos County Assessors office, the Oregon Department of Revenue assigned a real market value to the processing equipment, that multistory structure on Mullen Lane, of $65,429,860 but because of an enterprise zone tax exemption the company only paid taxes on $422,710. The company was billed $4,354.45 or $10.30 per $1,000 and using that same valuation on the actual value of the equipment should have paid $674,011 just for 2012. That is almost $15K apiece taxpayers contributed to the 45 jobs the company just terminated due to cash flow problems.

ORC_Tax_2012_equipment
ORC_Tax_assessment_equipment

A The World editorial yesterday discussing the surface use lease that allows ORC access to 459 acres of county forest valued at over $1 million for a yearly rent of $2 per acre, finished with this line. “Even if the company eventually fails, the county won’t have lost anything by signing”. That remains to be seen but I would argue that Coos County taxpayers have already lost.