September 11, 2003
Business Gets 'Good Faith' Break, Manufacturer Moves Headquarters To Portland
"This is a good news day," a staffer for Mayor Katz said just before this past Tuesday's news conference got underway.
"We want to support the Mayor," replied Kim Kimbrough, head of the Portland Business Alliance.
Here's how it was reported by KGW, who I turn to because, despite being at the news conference, describing financials is not quite my strong suit:
Portland Mayor Vera Katz on Tuesday proposed reducing a business license fee surcharge imposed last spring for schools and other local government services after the city scraped together an $11.4 million budget surplus at the end of the last fiscal year.
Katz will propose to Portland city commissioners that the business surcharge at .76 percent be cut for the next three years to .30 percent. The change could take effect starting in the next calendar year.
"With these one-time funds, the right thing to do is to give it back, as much as we can, to reduce business' obligations," Katz said.
You'll recall that the City imposed these surcharges as part of the package put together to rescue the local school district. Read the full report for the details of just how this happened.
Here's how the Mayor described the estimated impact for local businesses:
A large manufacturing or retail corporation with approximately 250 employees and a net income of $50 million which would have been paying a sucharge rate for schools of an estimated $5,000 ... will now pay an estimated $1,500 -- a savings of $3,500.
A small restaurant or retailer with 5-15 employees and a net income of $30,000 would have paid a surcharge of approximately $75 ... now will pay $23 -- or a savings of $52.
A large financial service institution or stock brokerage with 75 employees and a net income of $500 million would have paid $16,528 and ... would pay $4,958 -- a realized savings of $11,570.
For those wondering about whether individual tax payers would receive a break as well, you'll have to talk to the County, since the City doesn't control the income tax. But it's been speculated that should the State of Oregon intended education funding survive the referendum challenge against tax increases, the County could relieve individual taxpayers of the County levy.
As The Oregonian today editorializes, "Mayor Vera Katz could have found any number of rationalizations to justify funneling this money back into city services, but she wisely resisted this temptation."
Meanwhile, the City's Bureau of Development Services today announced (pdf) another small bit of good news:
King Cycle Group, manufacturers of Chris King Precision Bicycle Components, announced the relocation of its headquarters in Shasta Lake, California to Portland, Oregon on Wednesday. The expanding company will bring more than 50 new jobs to Portland's economy and will be a welcome addition to Portland's bicycle-oriented culture.
"Portland has successfully attracted an industry leader and more than 50 jobs with the promise of significant growth," the news releases quotes Commissioner Randy Leonard. "This is a huge win for Portland."
BDS reports that it is "working feverishly" with King Cycle Group to have things in place for the company to move to NW Portland by the end of the year.
Comments (1)
Dave Lister on 11 Sep 2003
Just a quick note. The roll back was on a business tax surcharge. This surcharge was applied retroactively to 2002. When the council approved the tax surcharge, local businesses were sent invoices in the mail. The same week the invoices were being received by local businesses, the City Council approved themselves a pay increase. It was, if I recall correctly, 1.6% for the council members and 2.0% for the mayor. By e mail, I questioned the council members concerning the timing of this increase and how it would be perceived by the business owners. I received a response from Saltzman's senior advisor. He explained that the raise was for all non union represented city employees. He maintained that it was only fair that since the union employees got an automatic cost of living adjustment the non union employees should receive one also.
I also received a response from Commissioner Francesconi. It simply read "very valid point".