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Legislators say Gain Share revival due in 2014

Hillsboro state Rep. Ben Unger (D-Hillsboro) hasn’t given up on trying to change the Gain Share program before the 2013 Oregon Legislature adjourns, even though he is running out of options and time.

Unger is one of several legislators arguing that the program, which is resulting in tens of millions of state income tax dollars being returned to Washington County and the city of Hillsboro, has grown so large that it is draining needed money away from other state programs, such as education. He and fellow Hillsboro state Rep. Joe Gallegos have been pushing to change the law to require that 40 percent of the Gain Share funds be dedicated to school districts.

But the two Oregon House freshmen lost a key ally when veteran Portland area state Sen. Ginny Burdick gave up on trying to change the program last week. Burdick, chair of the Senate Finance and Revenue Committee, had been working to reduce the amount of state funds scheduled to be returned to local governments. She argued the cost of the program is growing much faster than previously estimated, reducing money for other state services.

Burdick pulled the plug, however, after realizing her efforts were getting lost in the crush of business as the session nears its end. By law, the session must end in mid-July.

“I still believe the program needs to be changed, but it’s just too late in the session to have that conversation. People are just too tired and stressed out,” said Burdick.

Unless Burdick changes her mind, the Gain Share bill in her committee, SB 314, will die when the session adjourns. However, Burdick said she is committed to trying again during the 2014 session of the Oregon Legislature.

Beaverton-area state Sen. Mark Hass, who also serves on the committee, understands Burdick’s decision. He said the committee is now charged with putting together the grand deal that will balance the budget and end the session.

“Gain Share was just this slippery squirrel running around the committee room that nobody can catch. It’s incredibly complicated and there are a lot of competing interests,” said Hass.

Unger does not believe it is too late to change the program this session, however. But he does not know exactly where to focus or how many votes he can round up without Burdick’s help.

“I was counting on Burdick offering us a choice of options,” Unger explained.

Washington County Chairman Andy Duyck and Hillsboro Mayor Jerry Willey took some of the urgency away from Unger’s case two weeks ago, however, when they agreed to voluntarily give $10 million in Gain Share funds to Washington County school districts over the next two years.

“Washington County schools are the fastest growing (in the state),” Duyck said at the press conference where he and Willey announced their proposal. “We believe schools deserve additional money.”

Unger called the commitment a “generous good faith effort,” but noted it represents only around 20 percent of the Gain Share money expected to be sent to the county over the next two years. He would also prefer to see the school’s share written into state law.

“There needs to be certainty,” Unger said.

Like Burdick, Unger promised to revisit the issue next session if he cannot change the program this year. And he noted that Washington County and Hillsboro must eventually reach an agreement with the Legislature if they want Gain Share to continue. Gain Share is scheduled to sunset in 2019 if it is not renewed by lawmakers.

Gain Share was created by the 2007 Oregon Legislature to split additional income taxes generated by new and retained jobs created when local governments forgo certain property taxes to attract businesses that create jobs.

The jobs generate income taxes that go to the state, not the local governments. Legislators agreed to split the additional income taxes with local jurisdictions on a 50/50 basis when they approved the Gain Share program.

According to reports released earlier this year, Intel saved a little more than $62.6 million in property taxes and retained or created 7,701 jobs in Washington County in 2012. That same year, Genentech saved $3.8 million in property taxes and created 324 jobs.



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