Legislators right to leave Gain Share alone
As appealing as it was to think Washington County schools could get a needed funding boost from an unexpected source, there was good reason to be cautious about now-defunct efforts to have the Oregon Legislature direct Gain Share dollars to schools.
The Gain Share program, which has been the topic of much debate in recent weeks, provides a way for the state to reimburse cities and counties for revenues they lose when they defer property taxes for new or expanding industries. In simple terms, the state calculates what it is gaining in new income taxes from people working in these new or expanded industries, and then shares half of those income taxes with the city or county that has deferred property taxes through the Strategic Investment Program.
Because Hillsboro and Washington County have been so successful in attracting these industrial investments, the funds being shared locally are increasing and are expected to exceed $50 million in the next biennium. This growing pot of money was a tempting source of revenue for legislators who want to see more dollars for schools. State Reps. Joe Gallegos and Ben Unger suggested that 40 percent of Gain Share money be reallocated to Washington County school districts, instead of being returned to cities and the county government.
In theory, we would support almost anything that improves the school-funding outlook for the next two years. In practice, though, proposed changes in the Gain Share program could have backfired on Washington County, causing dollars to be redirected from this area to other school districts around Oregon.
For more than two decades now, Oregon has allocated school funding equally across the state. No matter where school taxes are collected, they are redistributed on a more-or-less equitable basis. The only permanent exception to this practice is the local-option levy, which allows communities to vote to tax themselves within limits beyond the level of basic school support.
Otherwise, there is scant precedent to support the state collecting and then shipping additional dollars to a specific school district or districts. That would violate the idea of school-funding equalization. There are examples, however, of cities or counties as opposed to the state stepping up, often on a temporary basis, to help school districts in distress.
Because of Oregons school-funding practices, the recent attempts to restructure Gain Share at the state level could have been fraught with peril for Washington County. If the Legislature decided to change the program to require that a portion of the money go to K-12 education, it would be bound by precedent to put those dollars not directly into Washington County schools, but into the statewide school-funding formula. That means Washington County schools would have realized only a small portion of the windfall.
Now that state Sen. Ginny Burdick and others have wisely decided against a legislative change in the Gain Share program this year, a proposal by Hillsboro Mayor Jerry Willey and county Chairman Andy Duyck looks quite appealing for schools. Willey and Duyck have offered voluntarily to give Washington County school districts $10 million in Gain Share proceeds for the next two years to help schools with facility needs.
Legislators and school advocates can quibble with the mayor and county chairman about the amount of money to be shared and the limitations on its use. But the approach taken by these two officials is the safer route for those who want to see Washington County schools as opposed to all Oregon schools benefit from tax dollars generated close to home. It will be far preferable to work out an agreement among a handful of local officials than to hammer this out among 90 lawmakers in Salem who all will want a piece of the action for their own schools and communities.