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UNLUCKY BREAKS.

Article Excerpt
Byline: Sherri Buri McDonald The Register-Guard

Sony's sudden closure in April of its Springfield CD factory didn't just deal a blow to the plant's 277 workers, who all lost their jobs. It also gave a black eye to the enterprise-zone tax-break system - the corporate incentive program that's a centerpiece of Oregon's economic development strategy.

Since Sony opened in Springfield 1996, it had been held as a model enterprise-zone company. From 1996 to 2000, Sony was largely exempt from paying property taxes on its 365,000-square-foot Springfield factory and equipment.

Elected officials reasoned that the five-year waiver would pay off in the long run because Sony was bringing good jobs to the area, and the factory eventually would come onto the tax rolls and begin paying its fair share of local government and school costs.

But after less than three years fully on the rolls, Sony shut the plant.

The closure stunned many. But perhaps it shouldn't have.

In Lane County, the performance of big companies that got big tax breaks has been questionable, a Register-Guard examination of the program shows.

Many of the largest companies that have gotten the biggest breaks in the past 12 years have closed factories or cut back jobs, either while receiving the tax breaks or soon after the breaks expired, the newspaper found.

This pattern appears to conflict with a key argument of tax-waiver advocates: that the breaks bring big companies to town that will stick around and strengthen the long-term jobs base.

Sony's high-profile closure is prompting some critics to urge more restrictions on granting the breaks.

Communities should require that companies keep tax-exempted factories open for a number of years beyond the waiver period or pay "restitution" if they shut them, said former Sony shipping worker Ellen Columbo of Junction City. Under current state rules, once a company stops claiming the breaks, it can cut jobs with impunity - as Sony did.

The tax-break system needs to be fixed to produce "a long-term benefit to the community, not just a short-term Band-Aid," Columbo said.

Columbo, 60, had worked at the Sony factory since construction began in 1995. After being laid off at the closure, Columbo spent four months out of work, and this month starts a new job as a circulation coordinator at magazine publisher Advanstar...

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