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OUR VIEW Our View: State income tax sharing run amok Comment MailTribune.com Writer Posted Apr. 5, 2015 at 12:01 AM Posted Apr. 5, 2015 at 12:01 AM » Social News Lawmakers in Salem are grappling with a well-intentioned program that has grown out of control, but the city and county that benefit from it are pushing back hard. Legislators should stand firm and do what needs to be done. The program's very name — "Gain Share" — is confusing, and the details are eye-glazing, which may help explain why nothing has been done about it yet. Under the state Strategic Investment Program, enacted in 1993, cities and counties can grant huge property tax breaks to attract new businesses or encourage them to expand. In 2007, lawmakers enacted gain share to help compensate those local governments for lost property tax revenue that resulted in new jobs. Gain share returns 50 percent of the income tax generated by those jobs to the local governments. Initial estimates were that the program would cost the state budget $5.1 million in the first biennium. Instead, the bill was $36 million, nearly all of which went to Washington County and Hillsboro, home of Intel, beneficiary of the property tax breaks. In the first three years, Washington County got 99 percent of the money returned statewide under Gain Share. Payments to Washington County local governments are projected to total $94.2 million in the 2015-2017 biennium. The rest of the Gain Share payments — $700,000 — will be divided among Clatsop County and five Eastern Oregon counties. Part of the reason for the huge payments is that, despite the initial intent, Gain Share pays counties not just for new jobs but also for "retained" jobs. State Sen. Ginny Burdick, D-Portland, who supported the 2007 bill, is sponsoring SB 848 to eliminate payments for retained jobs and cap payments to counties at 40 percent of the taxes paid by workers in new jobs. Another 40 percent would go into the State School Fund and 30 percent into a fund to help distressed counties. For Washington County, that would mean a payment of only $5.6 million in the next biennium instead of $94.2 million. Rep. Peter Buckley, D-Ashland, has signed on to Burdick's bill as a co-sponsor. A competing measure, SB 129, would also reduce the payments to Washington County, but not by nearly as much. Needless to say, Washington County is pushing for the more lenient reform. The Gain Share program is scheduled to sunset in 2019. Both Senate bills would extend the program for 10 years. Another bill would allow it to expire. This is a classic case of unintended consequences, and of the downside to offering huge tax breaks to lure industry. Washington County gave up millions in property taxes, but its economy is doing much better than that of most counties, especially those in rural areas. Meanwhile, public schools across the state struggle, while Hillsboro and Washington County share their Gain Share dollars with local schools — dollars that don't count as "local revenue" in the state school funding formula. It's clear that Washington County signed off on some tax breaks because of Gain Share, so phasing out those payments gradually makes sense. But ultimately, counties and cities that want to lure industry with tax breaks should calculate whether the benefits exceed the cost — without any extra help from the state.   MailTribune.com Writer Posted Apr. 5, 2015 at 12:01 AM » Comment or view comments Reader Reaction » STAY INFORMED Email NewsLetter Sign Up Today Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. Southern Oregon Directory Featured Businesses Loading... 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