Board vote gives Hynix tax break for three years.

Byline: JOE MOSLEY The Register-Guard

Lane County commissioners sealed the deal Wednesday on a three-year property tax break for the Hynix computer chip plant in west Eugene.

Rather than paying taxes totaling $4.8 million on a $156 million upgrade of its facility, Hynix will pay $1.1 million in taxes over the next three years and donate $1.5 million to local schools.

Commissioner Bill Dwyer said the company should be rewarded for spending money to maintain its local work force. "I think there's messages in this that we are trying to send," he said. "They chose to make a humongous investment."

Commissioners voted 4-1 in favor of the tax break, with Peter Sorenson opposed.

The Eugene City Council had already approved the package on a 5-4 vote. The city and county are joint sponsors of the west Eugene enterprise zone, which includes the Hynix campus.

Sorenson criticized the tax break package that will give all of the school contributions to the Eugene and Bethel school districts, the Lane Education Service District and Lane Community College - leaving Springfield and the county's rural communities out of the equation.

He also pointed out that Hynix's work force has dropped to 650 from a high of close to 900 in the past year, and that the company has pledged only to maintain the current number of employees.

"The purpose of the tax exemption is to encourage employment," Sorenson said.

Companies retooling factories located in enterprise zones aren't required to pay taxes on the new equipment, provided they increase employment by 10 percent from normal levels - which would be 986 employees, in the case of Hynix.

However, the company laid off 600 workers last July in reaction to poor worldwide market conditions. It has since rehired 450 employees, for a total work force of about 650.

Hynix's contribution to local schools will fall outside the state school-funding equalization law, which channels local property tax revenue for schools through the state Department of Education to be distributed equally to districts throughout the state.