Legislative committee split on reducing state's economic development commitment to local, regional governments

A delegation of Washington County and Hillsboro officials urged a legislative panel to continue the state's commitment to an economic development program that shares income taxes with local governments on Friday.

"We entered into this program as a partner with the state and want to continue that way," said Washington County Chair Andy Duyck.

Also appearing before the Senate Interim Finance and Revenue Committee were Hillsboro City Council Chair Aron Carleson, Tualatin Valley Fire & Rescue Chief Mike Duyck, and a number of county and city administrators. They all urged the committee to fix an apparent legal glitch in the Gain Share program that has prevented local and regional governments in Washington County from receiving approximately $12 million in state income taxes for waiving almost $83 million in property taxes to attract new jobs.

The delegation also urged the committee to keep the state's commitment at 50 percent of the income taxes generated by the new jobs created because of the property tax waivers.

Despite the united front, committee members sent mixed signals to the delegation, however.

State Sen. Ginny Burdick (D-Dist. 18), who chairs the committee, said the legislature is committed to fixing the legal glitch next session if it cannot be resolved sooner. But she also suggested the 50 percent figure was too high, noting the 2007 Oregon Legislature that created the program only expected to return $4.5 million to local and regional governments in the 2011-2013 biennium.

"That's less than half of what we're looking at," Burdick said.

But State Sen. Mark Hass (D-Dist. 14) said he was committed to preserving the program in its current form. He praised the contributions to the state of biggest beneficiary of the program, the Intel semiconductor manufacturing company, saying it was vital to the economy and also supported the schools and other local programs.

The split suggests the issue of the distribution formula is likely to be considered by the 2013 Oregon Legislature, even if the legal glitch is solved before it convenes. The committee has requested a "placeholder" for a bill to be introduced next session regarding the program.

Washington County Chair Duyck argued the higher-than-expected figure was not a problem, however, because the state also receive more income taxes than expected.

"This is something to be celebrated. The program works," Duyck said.

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