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HB4200A-PhotoIt was a very rare event indeed last week.

A single corporate employer caused the Governor to require the state’s 90 Legislators to leave their cozy homes to attend a Special Legislative Session, all for the purpose of making a 30 year, no-new-taxes pledge on non-Oregon income.

Yes, it was a special day for Nike, Inc.

First off, a big shout out to the Nike, Inc. team for agreeing to invest in Oregon at least $150 million in new money and hiring an additional 500 Oregon workers over the next 5-years.  Somewhere on a Facebook page is a photo of champagne corks popping as the Nike negotiators celebrated.  Although, it’s shameful that the same pledge of no-new-taxes for the next 30 years was not extended to all Oregon corporations willing to expand in Oregon and hire more Oregon workers.

The Special Session referenced was about one item:  HB 4200A — “The Nike Bill.”

HB 4200A passed the House by a vote of 50 to 5, and the Senate, 22 to 6.  There was both support and opposition to the bill on both sides of the aisle.  The legislative members who voted against it thought it appeared to them to be a “corporate give-away”.   (I might be off-base, but isn’t it a little disingenuous for liberals who campaigned only weeks ago on the evils of big corporations to be rushing a bill through in a Special Session that pledges to protect one of Oregon’s largest corporations from any corporate tax increase on the main source of its income for the next 30-years?)

Speaking of the Occupy Portland movement… where did they go?

At anyrate, the Governor and a majority of the Legislators who passed HB 4200A acknowledged and reinforced a behavior that if successful Oregon businesses do not get assurances that their taxes will not be raised, they will threaten to move future job-creating investments to states that offer more favorable tax policies.

Conclusion?  Head west Harley-Davidson.  Oregon is nurturing its big businesses and making deals because profitable companies need not fret about their tax burdens.

Just imagine the job growth if every Oregon business employer could benefit from such a pledge.

Photo courtesy of Oregon State Legislature.

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If you’re a numbers person there is plenty to analyze about the 2010 Sturgis Motorcycle Rally.

Even more so if you’re somehow impacted by the largest death tally in over 10 years.  These tragedies will reverberate throughout the tri-state area for months, and will undoubtedly affect future events.  My sympathies go out to the friends and families.   Even the Cowboy State (WY) has lawmakers reviewing the lack of a helmet law and are considering revisions based on this year’s tally which reversed a downward trend in that state.

Unknown Wedding Couple at Broken Spoke Saloon

Whether you have interest in the amount of tax revenue, the number of weddings, the number of drug arrests, the number of Regional Health System emergency department visits or the amount of trash the rally produced, there are stat’s for everyone.

First off is the tax revenue; the South Dakota Department of Revenue and Regulation stated that revenues at the 2010 Rally increased ($127,804) from last year. Sales and tourism taxes collected so far from temporary vendors totaled $989,911 in the northern Black Hills, which includes Sturgis and communities in Meade and Lawrence counties.  There were 1,207 vendors at the 2010 rally and the gross vendor sales totaled $13.6 MILLION in the Northern Hills, $1.7M more than last year. In the Southern Hills, which includes Pennington County and Rapid City, Custer, Hill City and Keystone, sales were $2.8 MILLION, up from last year’s $2.5M.  Another indicator of attendance came from the city of Sturgis public works director, Randy Nohava, who stated that the rally generated nearly 9-tons of trash per day!

But, there is one stat we won’t get and that is the exact number of law enforcement agents who worked the rally or the costs.  It’s double-top secret.  However, law enforcement is quick to point to the: 1,442 citations issued, including 209 arrests for driving under the influence; 46 felony drug arrests and 183 misdemeanor drug arrests as a result of their extensive presence.

And while I’m on the law enforcement topic, there is one statistic which was very odd. The arrival of a Blackhawk helicopter, courtesy of the U.S. Immigration and Customs Enforcement along with their extensive support team. Supposedly the Blackhawk was there to provide additional surveillance of criminals and better mobility for ICE agents.  There has been NO word yet on how many illegal immigrants were apprehended at the 2010 rally.  It turns out that the Blackhawk support was never requested according to local law enforcement and in fact their arrival created almost as much controversy as the May 2010 incident where 3-Blackhawks from the Colorado National Guard descended over Wounded Knee and touch off a flurry of protests.

In terms of attendance, the methodology suggests that estimates are always inflated.  In fact, an article in the Rapid City Journal stated that 2009 numbers were rounded down to 477,000 and that the early estimate number for 2010 is 450,000.  The exact number doesn’t really matter as the bean counters really focus on the tax revenue data as a key indicator.

There were some other interesting capitalism mass-marketing stats.  Ford used the Rally to launch its new 2011 H-D “bling” filled F-150 truck and the U.S. Postal Service unveiled the “American Motorcycles” commemorative set of four stamps featuring classic motorcycles and a 1970’s era chopper.  And there are statistics for a good cause too; the 50-mile Legends Ride which raised $52,000, and was split by the Sky Ranch for Boys and the Sturgis Motorcycle Hall of Fame and Museum. And finally were the Hamsters MC, who helped raise more than $257,000 for therapies and services at the Rapid City Children’s Care Hospital for children who couldn’t otherwise afford treatment there.

Yep, the rally has lots of protestations and an industry trumpeting its success…

Statistics courtesy of Rapid City Journal.  Photos courtesy of Army/web.

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Out Of Busines

Harley-Davidson has undergone a grueling restructuring over the last year to better compete amid less demand.

The economy and housing bubble depleted consumers’ wealth and left a lot of folks unwilling to spend on Harley’s high-end bikes.  I anticipate that Harley will remain at least three quarters away from achieving positive retail sales trends in the U.S., especially given the companies lapse of a successful promotion in the first quarter.

I’m genuinely concerned.   More so about the decay of prosperity in the local motorcycle shops, parts suppliers, and dealers.  Be it routine service or customization, the local shops most often operate on their ability to make sure YOU are happy. They know if you leave satisfied, you will tell your friends about your experience with the shop.  Word of mouth is an integral part of a shops reputation in the local area and carries a lot of weight in generating new business.  “Giving” local shops rebuild, repair, or service work on your bike, while appreciated, is not going to keep a shop in business.   The industry at large will need sales to rebound or the local motorcycle businesses will lay-off their skilled workers or worse – close down operations.

Unless you own or work in a local shop, you have no idea of what it takes to stay in business.  Facility overhead, staff salaries, phones, heat/electricity and advertising are things everybody thinks of.  But what about insurance, hazmat costs, licensing fees and money paid to local city and state governments for all the TAXES they require?

And speaking of taxes, I’m very skeptical of government spending our way to prosperity.  Increasing the tax liability on small business owners does nothing to encourage businesses to take care of their employees.  In fact, in Oregon there is a special ballot measure on personal and corporate tax increases.  In my opinion this one-size-fits-all legislation may well force motorcycle shops to shut down.  You’ve heard of Measures 66 and 67 and read more about net profits and corporate structures to last a life time so I’ll avoid explaining the details.  Instead, let me ask a simple question.  Did you get a raise last year?  I know I didn’t.  And if you’re lucky enough to still have a job, I’m willing to bet that you didn’t either.  Most likely you took a pay cut.  Or had your hours reduced.  Or were required to pay a larger share of your health insurance coverage.

At the same time you and I were taking cuts the Oregon Legislature voted to increase the tax burden on higher incomes and businesses by $750 million dollars, it also authorized $248 million in pay raises for state employees.  Yep, that’s right.  State workers got raises during the worst economy we’ve been through since the Great Depression.

Still don’t care?  Then how about this.  The legislature approved a budget that increased state spending by 9%.  If I was operating a motorcycle shop I can assure you that if my business increased 9% over the past two years I’d be most happy.  The legislature increase is about $4.7 billion more than the previous two years.  Time for another question.  Do you think state services have improved as spending has increased?  Are the schools better? Is our infrastructure better?  At a time when Oregon has lost over 120,000 private-sector jobs in the past 18 months the state has added 10,000.  It would seem that in Oregon, government has become the ONLY growth industry!

I’m not sure about where you live, but in Oregon during the winter many think about what customization you can do to your bike in the off-season.  Before long you’ll be sitting at your MacBook, surfing the web looking to make some modification dreams come true.  You’ll likely have questions and find yourself on the phone calling the local motorcycle shop trying to get all those questions answered.  Before long you’ll have spent most of an hour discussing scenarios, getting advice and prices from the local shop expert.

What if they don’t answer your call because the parts expert is no longer employed?  What if they’ve gone out of business?

We’re told by the “spinsters” in Salem that the state is making “budget cuts.” Huh?  In fact it means simply they can’t have as much of an increase as legislators would like.  A 9% increase is NOT a cut!  It’s my opinion that the private sector creates wealth.  Government does not.  I hope you’ll join me in voting NO on Measures 66 and 67 to send a clear message to the Oregon legislators that a CUT means CUT.   

Increasing taxes on motorcycle shop owners means more will go out of business.

Source: Statistics from The Oregonian

Photo courtesy of Flickr.

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red_bike_roadI believe that people work harder and invest more when they can keep a larger portion of what they earn.  I don’t believe this concept is unique to the left or right.  I also believe government should promote work; savings and private investment; and stable sensible policies to facilitate the efficient exchange of goods and services.  Good tax policy promotes balance between livability and livelihood.

In Oregon the gas tax revenue maintains the state highway system. Because it’s getting squeezed by rising cost of materials and labor along with a decline in revenues due to improved fuel efficiency and people driving less due to the economy the frantic lawmakers are proposing a mileage-based tax system.  You’ll be required to attach a GPS to your motorcycle and it will track miles traveled in Oregon.  Service station pumps will have electronic reading devices to collect mileage data from the motorcycle and you’ll receive a tax bill in the mail.  Never mind privacy issues.

This from a state where voters couldn’t pass the “no brainer” measure 59 which would allow a taxpayer to deduct from Oregon taxable income the entire amount of federal income taxes the taxpayer paid on the income subject to Oregon income tax.  At the same time there was pure genius from the Oregon Zoo management who paraded out an endearing baby elephant just as voters were being ask to pay more property taxes via a $125M bond measure to enlarge the elephant reserve.  I’m not anti-zoo, but paying more $$ to make an inadequate elephant exhibit a litter bigger in the middle of the Portland metro area seems anti “peta-ish.”

If that wasn’t enough elephant Haathi Chap for you there is the Oregon governor, Ted “Sleepy” Kulongoski.  He seems to be clueless in coming up with one idea after 6 years in office other than to propose building a 2000-room hotel by the convention center and open it as a state-owned casino.  How ironic because Kulongoski was the most vocal opponent of video poker back when the state economy and budget wasn’t in free fall.  If this is his best idea of dramatic state government restructuring and leading Oregonians through a recession that has forced over 12% of the residents out of their jobs — then Ted your cheese has slid off your cracker!  All he talks about is raising taxes (property, mileage, lotto, cigarettes, gas, sales, and the list goes on) — gimme, gimme, gimme and nothing about downsizing incompetent government.  In a very recent interview Kulongoski said,

“When you do not have enough revenue,… a lot of the fun leaves.” 

A true mark of a real loser is to whine when the going gets tough!

There are TEA Parties and tax revolts being held all over the state.  Join in and have a voice.

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