SALEM -- Washington County and Hillsboro have used much of their Gain Share money to support services traditionally funded by property taxes, an analysis by The Oregonian/OregonLive shows.
The two jurisdictions have dedicated more than 40 percent of their nearly $72 million in Gain Share dollars to local school districts, upgrades to the county's internal computer networks and projects for cyclists and pedestrians.
Washington County schools received $13 million. Information technology upgrades cost the county $8.4 million. And the city and county together spent another $8.4 million on sidewalks and other bicycle and pedestrian infrastructure.
Other significant Gain Share commitments over the last three years included Hillsboro's $5 million deposit into its general fund reserve, a $4 million training center for the city's police and fire departments and $3.7 million worth of capital improvements, mainly seismic retrofitting, to county facilities.
Meanwhile, $16.3 million remains uncommitted or unspent. Nearly $15 million of that total belongs to the county. Spokesman Philip Bransford said much of it would likely fund more seismic upgrades.
Lawmakers who want to stick a needle in the ballooning Gain Share program have repeatedly told their opponents that in 2007, when the Oregon Legislature approved the initiative, forecasters severely underestimated the impact to the state's general fund.
Nearly 99 percent of the spoils went to Hillsboro and Washington County because of their Strategic Investment Program deals with Intel and Genentech.
Advocates for Gain Share say the program fairly reimburses local governments for signing SIP deals, which sacrifice local property tax revenue for the benefit of the entire state. An Intel-commissioned study found in 2013 that the company has a $26.7 billion annual impact on Oregon's economy.
Gain Share dollars, supporters have argued, can help fund the infrastructure required to support Intel, its many employees and their families - projects that otherwise might have been paid for with the forgone property taxes. Under current law, the program returns to local municipalities half of the income taxes created or retained by SIP deals.
To catch up on two state bills that would reform Gain Share, read our previous coverage:
- With Gain Share program under fire, Washington County bill makes concessions
- House Speaker Tina Kotek pushing alternate Gain Share bill to fight Washington County-backed proposal
Not all of Intel's property tax money is given away. In fact, the tech giant is still the largest property taxpayer in Washington County. But millions of dollars in property taxes on the company's land and buildings are paid in the form of discretionary SIP fees, which are not budgeted in the general fund like regular property taxes. Hillsboro has mainly used its SIP dollars to pay down debt on projects like Ron Tonkin Field, the Hillsboro Civic Center, the Hillsboro Main Library and a pair of fire stations.
Gain Share money is discretionary, as well, and sometimes has been used to shore up local budgets.
For instance, the city made the $5 million deposit to its general fund reserve to allay the impact of Genentech's successful property tax appeal in 2012.
"[The police and fire training center], funding for local school districts, economic development infrastructure, and general fund reserves that replace lost property taxes are among the largest uses of Gain Share funding to date," said Hillsboro spokesman Patrick Preston earlier this month.
But other expenditures have sparked controversy. Hillsboro's $2.5 million two-way street conversion gridlocked the City Council and was even taken to court. A $2 million plan to build an RV park at the county fairgrounds led the president of the Fair Boosters to accuse the agencies of "not being transparent at all." And after Washington County earmarked funds for the IT upgrades in 2013, former Rep. Ben Unger (D-Hillsboro) challenged the Board of Commissioners at a public meeting.
Sen. Chuck Riley (D-Hillsboro) has a unique vantage point. He publicly said that "Gain Share is way too big" despite his district's benefiting from the program more than any other. In an interview on Tuesday, he said, "It's quite reasonable for the counties to get some money back, but it was never envisioned to be the very large sums."
Riley said that while he was campaigning, he heard from Washington County citizens who wished elected officials used Gain Share money "for things that we think we need instead of things they think they need."
He suggested that the city and county could have used Gain Share to help mitigate for inadequate transportation funding instead of raising street fees or proposing vehicle registration fees. Riley also pointed to a controversial Washington County plan to close two health clinics in favor of partnerships with existing medical providers as another example of an area worthy of the money.
His top preference, though, is for Gain Share to supplement funding for schools.
Riley, who barely unseated incumbent Republican Bruce Starr in November, has faced local backlash for his position on Gain Share. Hillsboro mayoral candidate and former City Council President Aron Carleson accused him on Twitter of "not repping his district."
But Riley doesn't seem to mind.
"I represent the people of the district, not the electeds," Riley said.
-- Luke Hammill
lhammill@oregonian.com
503-294-4029
@HlsboroReporter