A Fair Tax System that Matches Oregon Values...
By Mike Leachman
This tax season, a minimum wage worker who was employed full-time last year and raising one child will pay about $321 in state income taxes. That’s equivalent to the cost of about a month’s worth of food based on Bureau of Labor Statistics data.
For a single parent working at minimum wage $321 is a lot of money, especially when you compare it to the income tax bill that Intel Corporation, with $9 billion in profits, likely paid last year: 10 bucks. Why is Intel, with $9 billion in profits, probably paying only 10 bucks? Because over the last decade the actions of Oregon’s legislature have not matched the values of Oregonians.
Intel hasn’t always paid a pittance in state income taxes. In 1997, the company paid over $50 million in income taxes to Oregon. The company boasted at the time that it was the state’s best corporate income taxpayer.
Today, though, thanks to huge corporate tax breaks handed to it by the Oregon legislature, Intel likely has joined the ranks of the majority of Oregon’s corporations, who get off paying just 10 bucks a year in income taxes on their profits. That’s right, Intel, with $9 billion in profits, probably paid about three pennies for every dollar in state income taxes paid by a young working mother trying to raise a child on an annual income of about $16,200.
The story doesn’t stop with Intel, either. Most corporations operating in Oregon pay three cents for every dollar paid in taxes by a minimum wage worker. Two-thirds of the corporations operating in Oregon, including 20 corporations with profits of $1 million or more, get away with paying just 10 bucks a year in state income taxes. It would take 32 of those corporations to match the income taxes we ask that young mother working at minimum wage to pay.
It’s time for Oregon legislators to establish a new set of priorities for Oregon, priorities that better match the values of Oregonians. Oregon legislators wrongly shifted more of the costs of public structures away from big corporations and onto minimum wage workers and the rest of us. Let’s build a tax system that better matches Oregon values.
Oregon could eliminate income taxes on the minimum wage working mother by increasing the state Earned Income Credit. Such an increase would help that mother keep food on her family’s table, instead of sending a month’s worth of her family’s food budget to Salem to help pay for public structures — universities and state police, for instance — that Intel and other corporations operating in this state rely upon every day and get essentially for free. What would it cost to eliminate the income tax on the minimum wage family? A little less than $50 million a year, or roughly the amount that Intel proudly paid in state income taxes a decade ago.
Oregonians believe hard-working families deserve food on the table. Next year, the legislature should better match its actions with Oregon values by increasing the state Earned Income Credit and raising the minimum corporate income tax so that corporations like Intel pay something similar to what they used to pay.
Think about it. Profitable Intel could once again proudly proclaim itself to be the state’s best taxpayer, and families struggling to make ends meet by working at a minimum wage job could open their cupboards and find that Salem had decided to leave them a little more to eat.
Penny Wise Or Pound? Oregon Health Authority uses purchasing power to save on questionable prescription drugs...
The Oregon Health Authority takes another huge step today in saving money for Oregonians. Under a newly negotiated contract with health insurer ODS, the state’s prescription drug program will even more dramatically lower the cost of prescription medications for hundreds of thousands of Oregonians.
There are currently more than 345,000 Oregonians enrolled in the Oregon Prescription Drug Program (OPDP), administered by ODS. Since it launched in 2005, Oregonians have saved more than $30 million, an average of 45 percent per prescription. Under the terms of the new contract, Oregonians can expect, on average, an additional 10 percent reduction in prescription costs, generating an estimated additional $4 million in annual savings.
“Reducing the high cost of prescription medications is one essential step in lowering and containing the cost of health care,” said Tom Burns, Oregon Health Authority Pharmacy Programs director. “This is one of many steps we’re taking at the Oregon Health Authority to save money for consumers, employers and the state.”
“We’re honored to continue this partnership. We respect and embrace the responsibility we have to deliver high-quality programs and affordable pharmaceutical services deserved by all Oregonians,” says Chandra Wahrgren, vice president of pharmaceutical programs at ODS. “We’re committed to extending our reach, forging new ground and putting forth the energy and effort necessary to assist the Oregon Health Authority in delivering value and raising awareness of the benefits offered through the Oregon Prescription Drug Program.”
In 2006, the Oregon Prescription Drug Program joined the Washington Prescription Drug Program to combine purchasing power, forming the Northwest Prescription Drug Consortium. Its group program is open to all public and private sector businesses that offer group health benefits to their employees. The individual side of the OPDP is a prescription discount program open to all Oregonians who are uninsured or underinsured. There is no membership fee to join. Enrolling is easy: Call 1-800-913-4146 or go to www.opdp.org.
Debt Doomsday: Coming in May 2011...
America's debt ceiling currently stands at $14.3 trillion. This is the level that, by law, the government's debt is not allowed to exceed. Trouble is, the government's present debt has swelled to $13.7 trillion.
This means that at the current rate, we're on course to smash through that $14.3 trillion ceiling around May 2011 (although it might happen a month or two later, depending on what budget cuts are enacted in the next few months and how quickly they're implemented).
So what will the government do about this? Same thing it's done almost every year since 1962: Raise the debt ceiling so America can pay its bills. Congress really has no choice in the matter either. If the ceiling isn't raised, we've got a problem. A very big one.
A Fistful of Dominos...
Without Congressional approval for additional debt, the U.S government cannot pay its bills - most notably, interest payments on treasury bonds, bills and notes. If America defaults on those payments, or even misses them by just one day, the domino effect would be brutal...
~ Domino #1: The country would lose its AAA credit
rating and those bonds, bills and notes would no longer enjoy their status as the safest investments on the planet.
~ Domino #2: In turn, a lower credit rating would mean
that the United States would pay higher interest on its bonds in order to attract investors. Result?
~ Domino #3: A tidal wave of selling through fixed income markets, driving interest rates higher still.
~ Domino #4: Social Security would be hit hard, as its funds are invested in Treasuries. Suddenly, Social Security would have far less resources than just a day or two earlier.
~ Domino #5: If money is pouring out of so-called "safe" investments, you can bet that in that kind of environment, the demand for riskier investments would be next to nil. Stocks and financial markets around the globe would plummet. So why is this year's Congressional raising of the debt limit different than every other?
To Raise or Not to Raise?
Simple: This year, some members of Congress have said they won't vote to raise the debt ceiling. And they may be serious this time.
Intel confirms it'll invest billions in new Hillsboro plants...
Gov. Ted Kulongoski called Intel's planned expansion in Hillsboro "an investment in the citizens of this state." He joined Bill Holt, an Intel executive, for Tuesday's announcement at Ronler Acres campus. Intel renewed its long relationship with Oregon on Tuesday, unveiling plans for a new research factory that will inject thousands of jobs and billions of dollars into the state's besieged economy. Moreover, the company held out the prospect of further expansion, suggesting Oregon will remain home to Intel's most advanced research for a decade or more to come.
A few thousand construction workers will begin descending on Intel's Ronler Acres campus early next year to start on D1X. Two years later those temporary jobs will give way to hundreds of researchers and factory technicians.
Economists have cautioned that Intel's pending investment -- likely the biggest capital project in state history -- won't solve Oregon's economic and fiscal woes. But an array of relieved politicians lined up Tuesday morning to sing Intel's praises and enjoy a rare moment of good news.
By the numbers... $4 billion: What industry experts say D1X will cost to build and equip. (Intel didn't specify.) It's likely the largest capital project in Oregon's history.
$3.6 billion... The budget for a new Interstate 5 bridge, by comparison, 1.8 million Square footage of D1X and new support buildings 200,000 Square footage of D1X clean room -- as big as the largest Costco. 2013... Due date for D1X; upgrades to D1C and D1D wrap up late 2011. 1994... Year D1X (then called D1E) first appeared on Intel's plans. $1.8 billion 2009 payroll and benefits for Intel's 15,000 Oregon employees
800+... Number of researchers and factory technicians poised to join payroll (in Oregon and Arizona, though most will be in Hillsboro).
6,000+... Number of construction jobs being created over two years (again, split between Oregon and Arizona but weighted heavily toward Oregon)."It is an investment in Oregon, it is an investment in the citizens of this state," enthused Gov. Ted Kulongoski, in the last months of his final term. "Thank you all very much for believing in us."
Though Intel's headquarters are in California's Silicon Valley, the company's largest and most sophisticated operations are in Washington County. Intel employs 15,000 in the state, more than any other business, and those workers' payroll and benefits totaled $1.8 billion last year. "This is the best day of my career," Deanna Palm, executive director of the Greater Hillsboro Chamber of Commerce, exclaimed Tuesday. "When you've had such a difficult economy, to have something this phenomenal, an announcement of this magnitude, it's fabulous to be right here, right now in Hillsboro."
Intel's announcement isn't a surprise -- plans for a new Washington County factory have been on the books since 1994, and The Oregonian reported in August that Intel was ready to proceed. Details were elusive, though, until Tuesday. Intel will spend as much as $8 billion to upgrade four factories -- two in Oregon and two in Arizona -- and build D1X. Most of those dollars will go toward expensive chipmaking equipment, most of which will head to Oregon.
The projects will create 6,000 to 8,000 construction jobs, according to Intel, as well as 800 to 1,000 long-term factory jobs. The bulk of those jobs will be in Oregon, too, where Intel's wages and benefits average $120,000 a year. The pending upgrades will prepare the four existing factories to manufacture Intel's next generation of microprocessor, which uses smaller, 22-nanometer circuitry. Production on that class of chips is due to begin in Hillsboro late next year as part of Intel's regular two-year upgrade cycle.
D1X will provide additional capacity for processor research and manufacturing. "We will need space in order to continue our development model, and for that space to be online in time, we need to start building it this next year," said Bill Holt, an Intel vice president and manager of its technology and manufacturing group. "There's certainly room on the site for extending this building, whether you call it D1X or you call it another building," Holt said.
Intel gave no timetable for that expansion, and said little about what, exactly, D1X will be doing when it opens in three years. "They just don't want to pinpoint specifics because it gives them much more flexibility in terms of when they roll things out," said Joanne Itow managing director for Semico Research in Arizona. Intel controls 80 percent of the market for computer microprocessors, the brains inside PCs, laptops and corporate servers. While sales are at record levels, the company faces growing pressure from Apple, Google and others that use low-powered processors from rival ARM Holdings to drive mobile tablet computers and smartphones.
D1X at a Glance...
Timetable: Site prep has begun at Intel's Ronler Acres campus near Hillsboro Stadium. Dirt work begins in March, and building construction starts in the second half of next year. The facility will open in 2013.
Schedule: Construction generally will occur five or six days a week, with occasional Sunday work. Work will generally run from 6 a.m. to 9 p.m., with some round-the-clock projects when concrete is poured.
Cost: $4 billion (industry estimate)
Size: 1.8 million square feet, including a 200,000-square-foot clean room
Employees: As many as 800
Construction jobs:
As many as 6,000 over the three-year projectRonler Acres directly adjoins residential neighborhoods, with Hillsboro Stadium, shopping centers and other accouterments of everyday living all around. If Intel's proximity bothers any of them, they're keeping it to themselves. "Intel, from my point of view, has been a very good neighbor," said Bill Metzker, president of the Orenco Station Homeowners Association.
His neighborhood looks out on Intel's huge campus, about a quarter mile to the north. Metzker said he's never heard environmental complaints from his neighbors, most of whom are retired. "Given that they're doing an expansion there, I would have to say everybody's happy," he said. "It means maybe our real estate values won't keep dropping." Indeed, Intel is one of the state's sturdiest economic pillars. The California-based company has 15,000 employees in Oregon, more than any other business. Inevitably, operations of that scale have an enormous impact. Each day, Ronler Acres uses as much water as all the homes in a city the size of Pendleton. Its annual water bill: $2.4 million.
When D1X opens, it will produce 40 percent more wastewater from the site, according to Bob Baumgartner, regulatory affairs manager for Clean Water Services, which handles Washington County's sewage.
Water treatment:
Intel treats its waste before it leaves the site, he said, removing lead and copper, and neutralizing acids. Sulfur, copper and lead show up nonetheless, according to Baumgartner, in proportions similar to what turns up in household waste. Ammonia, a byproduct of Intel acid neutralization, also turns up in high quantities. Again, Baumgartner said, it's comparable to household concentrations.
Regional water officials, environmental regulators, state health regulators and others say they've seen nothing that would make them believe the operation poses any threat. The Department of Environmental Quality has fielded just four complaints since 1997. State fire marshal records list only two environmental incidents at Intel's Oregon facilities in the past 25 years, neither of which resulted in major injury.
And neighbors are convinced Intel is a safe, desirable employer. Its wages and benefits top $120,000 annually, on average. And it operates within Washington County's urban growth boundary, adding density without gobbling up farmland. "Our feelings are that Intel building its new fab is exactly what we want to encourage," said Cherry Amabisca, director of the Helvetia Community Association, across U.S. 26 from Ronler Acres. Environmental concerns are unknown among her neighbors, Amabisca said. "I haven't seen that surface here."
Intel's factory in New Mexico has been a source of community concern since the 1980s. Intel denies there are any health hazards but acknowledges it could have done a better job connecting with its neighbors.
New Mexico critics:
Some in New Mexico suspect Oregonians are feeling Intel's effects but have never asked why. "I have a hard time believing there's no one around the Intel plant in Oregon who is sick," said Marcy Brandenburg, a New Mexico real estate agent who used to own a coffee shop near Fab 11X. "I think they just don't know what's wrong with them."
Intel's critics in New Mexico are a mix of environmental activists, neighborhood organizers and scientists. For well over two decades, they have lodged a growing list of complaints against Intel. In addition to the suspected irritants, they accuse Intel of generating long-term health hazards. "If a semiconductor manufacturer builds a new plant, they shouldn't be anywhere near a residential area, or an area where there are very old or very young people," said Steven Martinez, an aerospace engineer who used to live near the fab.
On Memorial Day 2004, Martinez said, his family returned home to begin coughing and choking. Their eyes were watering, he recounts, and simply being in the house became unbearable. Comparing notes with his neighbors, tracking the wind blowing from Intel's fab and investigating its emissions, Martinez grew convinced the chip maker was responsible. Ultimately, he moved away. "I couldn't justify exposing my kids to that kind of pollution any longer," Martinez said. Many of Intel's critics in the state have similar tales, and they fault a breakdown in government regulation.
Because Intel monitors its own emissions, they say, they have no assurance the data are accurate. The company's environmental permit limits annual emissions but allows occasional emission spikes that could cause respiratory ailments. Their most alarming claim is that the plant has triggered an unusually high rate of pulmonary fibrosis, a deadly lung disease often associated with asbestos. Some New Mexico residents contend that crystalline silica, a silicon compound, has triggered several cases of the disease.
Oregon embraces Intel, but in New Mexico environmental doubts persist...
Intel's manufacturing campus near Hillsboro Stadium is so enormous that, on frosty mornings, water vapor from its cooling towers dusts something like snow on roads and rooftops for a mile around. The factories swallow 3.7 million of gallons of water a day and then spit most of it back into the city's water-treatment system, which ultimately feeds into the Tualatin River.
Because Intel makes its chips inside clean rooms, where sophisticated filters eliminate even microscopic contamination, it might appear the semiconductor industry is equally pristine. In fact, computer chips are made with potentially hazardous metals and toxic chemicals. But despite Intel's scale and those possible perils, Oregon seems at peace with the tech giant as the company prepares a multibillion-dollar expansion of its Ronler Acres campus.
Not so in New Mexico, where suspicion and accusations have dogged Intel for more than two decades. Residents near Intel's factory outside Albuquerque, a facility identical in many ways to its Oregon operations, complain that Intel emissions poison their air. They blame Fab 11X for everything from bad smells to fatal lung diseases, and their concerns are attracting scrutiny from federal regulators.
Intel concedes it has been ineffective in addressing fears in New Mexico. But though it acknowledges that it may have contributed to an atmosphere of mistrust, Intel is emphatic that it has done nothing to make the atmosphere unsafe. And few complaints have surfaced in Oregon. "We are extremely proud of our EHS -- environmental, health and safety -- results," said Todd Brady, Intel's global environmental manager.
Making the chips:
Intel's microprocessors provide the brains for 80 percent of computers worldwide. They're tiny, embedded deep inside our PCs and laptops; we don't see them and don't spend a lot of time thinking about where they come from. They're made using an elaborate layering process, in which metal is etched away by acid to form the chips' circuitry. Tremendous volumes of water wash each layer clean. Other steps implant new properties and insulating materials. The process employs a rogues' gallery of metals, acids, flammable gases and, in regulatory terms, other "acute health hazards." Acids must be neutralized before they return to the water system. Atmospheric emissions pass through "scrubbers" designed to absorb airborne chemicals in water. Solid waste is taken away for recycling or disposal.
Intel's new Hillsboro factory, dubbed D1X, will prepare the company for classes of technology still on the drawing board that employ new tools, production techniques and designs. It almost certainly will be the largest capital project in Oregon's history, with a price tag that could reach $4 billion. Intel will summon thousands of workers to build the factory, called a fab in industry parlance. Construction will run five, six or seven days a week, starting early in the morning and sometimes running late into the night.
Conscious decisions play a major role in how healthy we are...
Conscious decisions play a major role in how healthy we are 0 comments With all of the talk about health care costs, we hope the most obvious answer isn't overlooked by Americans - making the right choices in how you live your life.It requires people to be informed and make conscious decisions about how to avoid things like high blood pressure, obesity and cancer.
There are a lot of highly trained health care professionals and plenty of information in the media about how to avoid health-threatening activities, but people still have to be willing to put aside destructive behavior such as smoking that's a matter of voluntary choice. The subject, which comes up repeatedly in Klamath County health issues, appeared again in a Nov. 30 news story, which said Klamath County had an above-average rate of lung cancer.
Included were comments from doctors at the Cancer Treatment Center at Sky Lakes Medical Center who said that, while air pollution can be a factor, the overwhelming cause of lung cancer is smoking, with one doctor saying it was the main cause of 90 percent of the lung cancer cases he sees. A couple of weeks later, Dr. John Saultz, chair of the Oregon Health Sciences University, said during a presentation in Klamath Falls about a range of health issues that the United States should shift some of its medical spending from care and put more on education.
"Literally," he said, "we are getting less healthy the more we spend." That inverse relationship shouldn't exist, but does and, as people struggle over health care and its cost, they should think about how much of their own health problems could be solved - or could have been avoided - if they'd made the most sensible decisions.
OFFICE OF THE ATTORNEY GENERAL...
In the midst of a major recession, with thousands of Oregonians out of work, giving to charitable organizations is more important than ever. The overwhelming majority of charities do amazing work, but some are little more than scams. Last week, I announced a list of the 20 Worst Charities that solicit donations from Oregonians. Many of these charities sound good, claimingto support children, veterans, or law enforcement but they waste the vast majorityof the donations they receive on their own salaries, telemarketing, and overhead.As a result, they accomplish very little for the cause they are purporting to help. When the 2011 legislative session convenes in the new year, I will be asking state legislators to help kick sham charities out of Oregon. If successful, Oregon will be the first state in the country to use the tax code to fight charities that spend more than 70% of the money they raise on fundraising and administration. Until then, if you are planning to give to your favorite cause, please read DOJ's wise giving tips so you can be sure your donation will serve those in need.
