Benton County billed Hewlett-Packard, or HP, for $898,876 in property taxes last year – and the company, like many of us taxpayers, would rather use those dollars for other things.
So, last month, HP executive James Thom appeared in front of our county’s commissioners and started talking new local semiconductor jobs and tax breaks from the county. The idea being that a property tax reducing enterprise zone designation for the company’s local campus would help HP compete for federal CHIPS Act dollars, and in turn, the company would then add high wage jobs at its Corvallis facilities.
On the surface, it’s a compelling argument, but it doesn’t hold up when looked at through the lens of its local impact, or through another lens, how it will make any difference in what HP does here in Corvallis, regardless.
Local Impacts
Thought of another way, it stretches credulity to think that some hundreds of thousands of dollars of tax savings in Benton County will make a hairs-width difference in HP’s pursuit of billions in federal CHIPS Act dollars. However, those property taxes make a significant difference for our local community.
For perspective, Benton County calculates their annual property tax revenue by the millions and HP counts their income in billions – that’s $180 million for the county, $63 billion for HP, respectively.
Both the city and county do have some other sources of revenue, but they’re mainly dependent on local taxpayers – and HP’s outpost in Corvallis does benefit from infrastructure we’re all paying for.
And then there is the timing. The county is currently asking property owners, even those with low income rental properties, to take on $110 million in new taxes to replace outdated law enforcement facilities. Beyond this, we can see aging city infrastructure that will also need considerable dollars in the not too distant future – water mains don’t last forever, after all.
But, What About Those Local HP Jobs
Firstly, the company is going to want to put their semiconductor work in Corvallis, even without any tax incentives. Notably, Thom informed the commissioners that, “The Corvallis site is HP’s only semiconductor processing and assembly facility in the U.S.”
Heaping onto that already existing incentive that we Corvallisites needn’t pay a penny for, Oregon State University announced last year they’d be building a new $200 million semiconductor research center. None of that money is coming from HP, but we’re imagining they’d benefit. Just last month, when Gov. Kotek had lunch with Benton County’s HP execs and County Commissioner Xan Augerot, Oregon State University President Jayathi Y. Murthy was also at the table.
In other words, HP already has plenty of incentive to put new semiconductor jobs into Corvallis, and that alone is enough reason to deny them a request for a tax reducing enterprise zone. To be explicit, the county would simply be giving them money to do what’s already in their best business interests anyhow.
Secondly, when Thom presented to the commissioners, he told them HP was anticipating the jobs created would amount to 150% of locally prevailing wages. This sounds like a good thing, but it’s problematic.
Benton County’s current unemployment rate is already well below 4% – and city studies have shown a number of our workers, even at middle or upper-middle incomes, can’t find a home here.
We’re trying to imagine schoolteachers and hospital nurses competing for housing with a bunch of new HP hires moving into town, and it’s not a pretty picture. We see some prospective value in the new jobs, but in the main, we’re thinking they’re not best for our community right now.
However, we also believe those jobs are coming here regardless – and there is simply no reason to offer HP a tax incentive on top of that reality.
Enterprise Zones, HP Transparency Problem
We don’t blame HP for requesting a tax break, they’re in business to make money, and they saw an opportunity to ask for some savings.
If the circumstances were different, we could see being supportive of a property tax reduced enterprise zone for a local startup, or where there’s good evidence that a meaningful community-wide benefit would occur that otherwise wouldn’t. But neither of these conditions are met in this instance – the jobs are coming either way, and some of us believe we may be better off without them for the moment.
Also, and this is only a small aside, HP has historically been unwilling to respond to requests for employment numbers at their Corvallis campus – which may be fine for a private company, but what they’re asking Benton County residents for is a public subsidy.
Do you have a story for The Advocate? Email editor@corvallisadvocate.com