Welcome to Oregon…Give Me Some More Money

Michael McBride
|
Posted: Jan 19, 2007 11:19 AM

The Oregonian’s Steve Duin, has yet to meet a profitable company that he likes. In an inane, painfully shallow, and vitriolically sarcastic "commentary" he lambastes Nike; who last week gave over $9M to local schools, and who happens to be the Oregonian’s number one target for its State fundraising "commentaries," for having successfully lobbied the State legislature (along with other Oregon companies) to change the basis for the calculation of their corporate income taxes.

Nike (along with other Oregon companies that Duin fails to mention by name) successfully lobbied to have the basis of their State income taxes determined by their in-state sales, vice total company sales revenue. This is known as the single-sales factor. And it indeed, lowered Nike’s income taxes from $16 million to slightly over $1M…according to Duin…I’ll accept that as fact.

In the interest of full disclosure I am a Nike stockholder, and I was a Nike employee for five years. I was the Facilities Operations and Property Manager for the Nike World Headquarters from 2000 to 2005. I have some knowledge of Nike and its practices. And so that I am not taken as a shill for Nike, I did not leave on the best of terms with my boss, which should go a long way in clearing up any misconceptions on why I would go to bat for the Goliath of sports companies. Regardless of my disputes with my superiors, Nike is a decent company that gives back far more than the $16M that Mr. Duin is crying over.

But before we get to that, Mr. Duin needs a schooling.

First and foremost he needs to be taken to task for his math skills. Any “journalist,” “commentator,” critic, should be able to divide the $16M that Duin weeps for, by the massive State budget of over $15 billion…billion with a “B”… and figure out, in the two thousand words or so he spewed onto page B1, that the resultant would comprise a whopping .10666% of the total budget. I guess they don’t have calculators at the Oregonian.

Additionally, any superior journalist type should be able also calculate that Nike’s stinginess is costing school districts a gargantuan $28 per student, per year. I am certain, in light of the nearly $10,000 per student the state will spend next year per student, that Nike’s miserliness will cause the demise of each and every student in the State of Oregon. No wonder Duin is apoplectic.

Duin singularly claims that Nike is to blame for these tax changes because they… “…lobbied viciously and successfully for the single-sales factor…” Guess he is also taking a swipe at Nike’s free speech rights, and the independent nature of the Salem legislature. Duin certainly doesn’t take narrow aim when he writes a “hit” piece.

Furthermore Duin’s myopia, centered simply on the figure of $16M, fails to consider the enormity of the economic impact that having Nike headquartered in the greater Portland area. Of course, that would take some in-depth analysis, some actual digging for something more than one dimensional facts, and coming to some alternative conclusions based on the whole picture, not just a single pixel in the left margin of a snapshot. His shallow and vacuous “analysis” is well below journalistic standards, and hits far below the belt.

I am not privy to the actual figures, but I will not be far off, and I will certainly not be exaggerating. Consider for a moment that the average salary for the 6000 Nike employees in Oregon, is likely around $40,000…average…don’t get excited. Add in about 50% for their generous fringe benefits, and Nike puts about $360M into the local economies via employee salaries and fringe benefits. Nike salaries bring in additional doctors to service these employees. Additionally, these 6000 employees require dentists, supermarkets, gas stations,

schools, houses, banks, credit unions, teachers…all the goods and services that 6000 people use in the course of their daily lives. The $360M that Nike employees earn and distribute within our communities is multiplied across the families that are supported in the spending of those wages. Is

it possible that Nike is already doing its part in generating revenue for the State of Oregon? Those same Nike employees likely contribute about $12M, or more, to local property taxes (if you average a low estimate of $2K per year), and likely another $21M, or more, in state income taxes (Oregon rate of 9%). How is it possible that a simple History major can figure this out, but a professional journalist can choose to ignore this kind of analysis when writing a scathing rip on a responsible corporate citizen?

What else did Duin miss?

One of my additional duties while at Nike was to manage Business Energy Tax Credit Pass Through Program. Nike was approached by the State to be the first company that would directly sponsor school energy projects, in return for equivalent tax credits taken over five years. In the three years that I managed the program, Nike invested $2M directly into school districts and their physical improvements. Of course this was essentially a revenue neutral proposition for Nike, but by investing in energy efficient projects, though an outlet not previously available, school districts could reduce their operating costs year-to-year…returning dollars directly to the districts’ operating budgets. I personally delivered those checks to School District Board meetings in Gervais, Douglas, David Douglas, Klamath Falls, Lane County, Astoria, and a half a dozen more. Those districts were not full of Duin’s venom, they were appropriately grateful and appreciative. On more than one occasion, I got re-thanked for the districts’ new Nike track, although that wasn’t my program.

Nike’s leadership eventually brought more businesses into the BETC Pass Through Program, including US Bank that committed over $40M in Pass Through dollars. The energy savings garnered by this direct infusion of money into the districts, bypassing the State’s inefficient monolithic monetary system, returns millions of dollars to the classrooms through reduced operating expenses. The State’s own figures estimate that over $215M a year is being saved by schools. Many other companies had the opportunity to participate, but declined. Nike’s leadership in this program is more than making up for the $16M that Duin is missing from his wallet. How selfish of Nike.

Nike enthusiastically participates in myriad of popular Oregon endeavors…SOLV, Hood to Coast (sponsoring over 50 teams, including car rentals…etc., etc.), matching volunteer hours with dollars, youth fitness programs, and school and community sports facilities upgrades.

Nike paid matching dollars for my volunteer hours on the Beaverton School District Long Range Plan Committee, even though I am not a resident of that district. They matched my participation as a Board Member on the Oregon Trail Chapter American Red Cross Board of Directors, and supported my efforts while serving on the State Buildings and Codes Structures Board. All endeavors that required time away from my position at Nike, time they never seemed eager to recover. These hours were gift from Nike to this State, and its local entities, which was given without the expectation of re-payment. Duin misses this by a mile. Oh, and by Nike employee standards, I am probably a slacker when it comes to volunteering my time.

He fails to consider the millions the headquarters brings to the community in dollars spent on sales meetings and other extravagant events.

He fails to consider the prestige the area is lent, by having a world class campus within a stones’ throw.

He fails to mention that Nike was stiffed by the City of Beaverton in over $300,000 in legal fees, by an overly generous judge who took mercy on the taxpayers of Beaverton and refused to punish them for the misdeeds of their city leadership. At Nike’s expense.

He fails to consider that Nike, as a publicly traded company is expected to return as much value to its shareholders as possible, within the confines of all corporate governance requirements. Lowering your tax payments is considered one of those proper business objectives.

He fails to mention that Nike is one of a handful of companies that has been sincerely working with the World Wildlife Foundation, through the Climate Savers program, at a considerable corporate expense, to reduce its overall impact on the earth’s environment. This is an onerous commitment to reduce their greenhouse gas emissions to pre-1998 levels…independent of growth, and since Nike’s presence in Oregon has grown about 20% over the last seven years, this is no cheap commitment.

Duin simply fails to do a journalist’s job in finding a righteous platform from which to deliver his sanctimonious sermon.

Duin represents all that is wrong with the left and with journalism these days…they take an ounce of fact, mix it with a gallon of prejudices, and spew their over-baked conclusions onto the pages of a non-thinking paper. Nike, nor any other company, is on this planet to be the cash cow for the myriad of liberal causes dreamt up by the left and espoused by the leftie MSM. They are simply another business trying to do business in the increasingly, business unfriendly, liberal world.

Lay off.