We are sending this message (without the action buttons) to every member of the House, and we are asking you to send your own, shorter message, to your representative. It was also published on Thursday in The Oregon Way.

Gain Share is a boon to Washington County—and a bane to the rest of the state 

Gain Share sends $16 million a year to Washington County, Oregon’s richest county, and almost nothing     to the rest of the state. Procedurally its advocates are pushing the renewal of Gain Share ahead of sunset review next session.

With the early renewal in SB 1524A, Gain Share would avoid legislative scrutiny for 14 years and be extended until 2030.

The six-year extension of Gain Share is a provision in the omnibus tax bill, SB 1524A, which is moving out of the Senate Finance Committee.  We need to stop it in the House by getting legislators to strip it out of the bill.
What is Gain Share? It is the payment of General Fund revenue to cities and counties that have granted     15-year partial exemptions from property taxes (primarily on equipment) to businesses like wind farms, data centers—and Intel. These exemptions are granted under the state’s Strategic Investment Program (SIP). The theory is that employees of SIP companies pay a lot in state income taxes, and so the state should “share” some of its “gain” with the jurisdictions that granted the property tax reductions.

 

Gain Share is calculated as 50% of new employees’ income tax and 20% of retained employees’ income tax. Those tax receipts are funneled from the state back to the county of the employer. After Washington County’s take rose to $40 million a year in 2015, Gain Share’s maximum payout to a county was limited to $16 million. The program’s total cost is $16.8 million per year; seven counties divide the $800,000 Washington doesn’t get, and 28 counties get nothing.

 

Advocates of Gain Share say counties receiving Gain Share should be compensated for the property tax breaks they give to businesses. Their argument ignores other factors:

 

  • Property taxes fund K-12, and because of the way the school funding formula works, property tax exemptions harm school districts across the state;
  • Counties collect from SIP businesses Community Service Fees to offset some of the foregone  property tax revenue;
  • Counties collect property taxes from the homes of these generally well-paid employees.
Is Gain Share justified? Local governments have produced no documentation of their costs serving SIP businesses. That’s the kind of information one would expect in a review of the Gain Share program.

The Legislature should review Gain Share in 2023 and consider whether its benefits outweigh the costs.