Despite the overwhelming unpopularity of tax breaks and taxpayer handouts to large corporations, it seems that some Oregon legislators really want to find ways to give away public resources to big businesses that don’t need the help.
And it’s Oregon’s most struggling communities who’ll pay the price.
A handful of bills are still alive in the Oregon Senate that would create or expand complicated schemes that resulting in a boon to private corporations at the expense of money still-underfunded senior services.
Here’s Part 1 of a two-part series:
Senate Bill 223 – “Gain Share”:
Some background: The state adopted a program allowing businesses and local governments to form agreements that cut participating businesses’ property taxes on equipment by 75%. That Strategic Investment Program (SIP) in itself is a major tax break that primarily benefits very large corporations.
But since the Strategic Investment Program inevitably cuts critical tax revenue away from counties and local school districts, the state tried to make up for that lost tax money with the “Gain Share” program. Gain Share sends half of the income tax revenue generated by the employees of these SIP businesses back to the affected local governments as a way of offsetting the revenue lost through the SIP program.
You probably won’t be surprised to find out that this big tax break has grown much bigger, much faster than legislators originally intended—much like the controversial Business Energy Tax Credit (BETC) program that ballooned out of control over the span of just a few short years before it was finally ended.
The Gain Share program was estimated to cost $4.5 million per year—instead, it cost $12 million in its first year. In the next two years, it’s projected to cost $56 million. If it’s not ended or reformed, by 2019-21 it is projected to cost the state $91 million. That’s the equivalent of nearly a week of school for every K-12 student in the state, all to benefit big corporations.
While we still have overcrowded classrooms and shortened school years, legislators should be reining in out-of-control spending on tax breaks (like they did with the BETC), not just “letting it ride.”
Senate Bill 223 would expand this program by pushing out the sunset date to 2029. What could possibly go wrong?