Hypocrisy: The Nike Bill and the Oregon House Democrats

by NW Spotlight

Over at Blue Oregon, new House Majority Leader Val Hoyle (D-Eugene) and Rep. Jules Bailey (D-Portland) offer liberal readers an awkward defense of Friday’s Special Session to pass the “Nike bill.” They painfully assure fellow Democrats the bill isn’t a “tax giveaway,” and that action is needed immediately to prevent an arcane constitutional rule from delaying Nike’s expansion plans.

Why would these Democratic leaders rush to defend the Nike bill, as well as the special session when they are less than a month away from regaining full control of the Oregon House of Representatives?  It’s questionable whether the bill would even pass through a Democratic House.  But the answer may also lie in their campaign strategy and the political coalition that ultimately helped them pick up four seats from the Republicans.

During the campaign Ben Unger, Shemia Fagan, Joe Gallegos, Chris Gorsek and other Democratic candidates didn’t hide their opposition to policies that benefit corporations. They relentlessly attacked their Republican opponents for supporting tax policies that benefit “millionaires and corporations” at the expense of public school teachers.  The public employee unions themselves spent millions to deliver this message into competitive House districts. The strategy worked. The anti-corporate message ignited the base, turned out liberal voters and secured a new House Democratic Majority.

Perhaps the new House leadership then found itself in an uncomfortable position when Gov. John Kitzhaber insisted on a pre-2013 special session to pass his “Economic Impact Investment Act.” The bill would allow the Governor to enter into “qualifying investment contracts” with any company committing to a minimum of 500 jobs and $150 million in capital investment over five years. The new law will allow Kitzhaber to promise Nike that Oregon will maintain its corporate-friendly “single sales factor” when the company expands operation within the state.

Over the past few days, liberal activists have refused to hide their ideological disgust at developments in Salem. In his own Blue Oregon post, progressive pundit Chuck Sheketoff writes that the single-sales factor allows Nike to “escape paying millions each year in taxes on its profits.” Another liberal commentator labels Kitzhaber’s proposal as “bogus” and suggests the whole effort is a “secretly and undemocratically negotiated compromise between a major corporation and government.” With this kind of criticism, who knows how rank-and-file members of the House Democratic Caucus feel about the measure?

There is plenty for both liberals and conservatives to debate about the Nike bill. But there’s no debate about the economic benefits about Nike’s potential plans in Oregon.  Even Kitzhaber understands this private-sector expansion would generate thousands of new jobs, and that providing “tax certainty” is an effective way to retain and attract major employers to Oregon.  Republican legislators understood the benefits of these policies and four ultimately paid the price in losing their seats.

Maybe Democratic leaders are secretly supportive of supply-side economics.  Or maybe they despise the bill, but couldn’t afford to publicly defy Kitzhaber.  In their defense of the bill and the special session, Reps. Hoyle and Bailey clearly understand the need to immediately quash any rebellion among liberals, public employee unions and left-wing House Democratic members. Passing the bill now also spares Unger, Fagan, Gallegos, Gorsek and other Democrats the clear hypocrisy of supporting a tax policy that benefits a large corporation.

These Democrats have been silent on this issue, and have released no statements about how they would have supported the bill. If they still think that state government shouldn’t pass this kind of policy, where is their outrage?

One thing is certain.  Democrats do not hide their desire for more revenue.  Maybe a majority of House Democrats will likely support the Nike bill now, just so they’ll feel even better about raising taxes on everybody else later.