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State finally pays Washington County $11.5 million

After more than six months of delays and confusion, Washington County has finally received a $11.5 million check from the State of Oregon.

The check, which was received on Jan. 24, is the first payment due to the county under an economic development intended to create new jobs. It partly reimburses local governments for waiving property taxes for 15 years to attract new businesses or encourage existing ones to expand.

The so-called Gain Share payment represents 50 percent of the state income taxes generated by the new jobs created through Oregon’s Strategic Investment Program.

“This is the first dividend check earned by Washington County citizens who have forgone payment of property taxes through Strategic Investment Program (SIP) agreements to attract and retain world-class, traded-sector employers like Intel and Genentech,” Washington County Chair Andy Dyuck said in a prepared statement.

According to figures provided to the state by the county, the property tax waivers resulted in substantial private invention and job creation, even during the height of the Great Recession, whose effects are still being felt.

“Our most recent 15-year tax abatement agreement with Intel allowed this employer to invest $4.4 billion so far, investment that has occurred in the depths of the recession when Oregon needed it most. Our SIP agreement with Genentech has resulted in investment of $250 million so far. Local governments with SIP agreements elsewhere in Oregon have foregone property taxes — at a smaller scale — to successfully recruit employers in industries such as paper product manufacturing and wind power generation,” said Dyuck.

The county had expected to receive the payment before the start of the current fiscal year, which began on July 1. It was delayed, however, because of legal questions and technical problems. The Oregon Governor’s Office had to get involved in straightening out the issues, and then the Emergency Board of the Oregon Legislature finally authorized the payment last December.

Duyck and the other county commissioners are pleased the state finally upheld their end of the agreement, which was first authorized by the 2007 Oregon Legislature.

“The Gain Share program addresses a question of fairness among state and local governments involved in these partnerships. SIP and Gain Share are great examples of how the State of Oregon and local governments jointly use their tax revenue to create jobs,” Duyck said.

The $11.5 million will be split between a number of local governments that waived property taxes collections under the SIP program. In addition to the county, they include the City of Hillsboro, Tualatin Valley Fire and Rescue, Metro and the Port of Portland. The county is currently working with the administrative rules issued by the state to determine how much money each of the governments will receive.

Some legislators have said they believe the 50 percent share is too high. State Sen. Ginny Burdick, a Portland-area Democrat, has said she will push the 2013 Oregon Legislature to reduce the percent that is sent to the local governments. State Sen. Mark Hass, a Beaverton-area Democrat, says he will fight to retain the current split, however, arguing that the additional income taxes would not have been collected if the local governments did not agree to waive their property tax collections in the first place.

Washington County has not decided exactly how to spend its share of the $11.5 million payment yet. According to county spokesman Philip Bransford, “Discussions with the Washington County Board of Commissioners and Budget Committee about the use of the County’s Gain Share funds have focused on technology network improvements, financial- and tax-system replacements, capital projects and other one-time expenditures.”