End or Fix GainShare -- amend SB 223
The Legislature passed SB 954 in 2007. It gives 50% of employee’s income taxes back to local taxing
jurisdictions, if they work in facilities that have a Strategic Investment Program (SIP) agreement limiting the
property taxes for the facility. Next biennium it will take $56 million from the General Fund.
Under SIP agreements, local counties agree to cap the assessed value at $100 million ($25 million for an
agreement in a rural area), for a company investing in a new facility. In addition to paying the property taxes on
no more than $100 million of value (even if it is worth $3 B), the company also pays a “Community Service Fee”
equal to 25% of the property tax savings (with an annual cap of $2 million or $500K in a rural area).
GainShare assumes that this hurts local taxing districts.
Is GainShare actually needed? Local Jurisdictions get significant new revenue from:
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System Development Charges
5 years of back taxes for land used for industry rather than farming
Farm land values increased to industrial land values
SIP Property Taxes assessed on the first $100 million in value ($25M in a rural SIP)
SIP required Community Service Fees capped at $2 million per year ($500K in a rural SIP)
Property taxes from the homes of the new employees at the SIP businesses who live in their county
Property taxes from the “stimulated growth” of the other businesses and their employees’ homes.
Washington County (which is getting virtually all the benefit from GainShare) successfully
experienced significant growth over the last three decades -- without GainShare.
SB223, the current bill addressing GainShare doesn’t fix it.
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It extends the sunset from 2019 to 2029! That is 16 years hence.
It continues to give away 50% of the state’s revenue from the new and retained employees working in
the facilities.
It remains silent on the allocation of the money the state contributes back to counties. Washington
County gives none of its money to schools.
Recommendations: End or restrain GainShare -- via amendments to SB 223.
Option One:
 End the program. Call it a mistake.
 Change SIPs by increasing the caps.
Option Two:
 Require that schools get their share of the money which is passed back to local taxing districts and,
 Continue the GainShare program but change the formula::
 Count only the NEW jobs generated each year, or
 Limit it to the annual $4.5 million both sides expected when GainShare was passed and/or
 Reduce the percentage 10, 15, or 20% rather than 50% of employee’s taxes.
SIPs worked without GainShare for over a decade. GainShare’s cost is projected to escalate to $91m
by 2019-21—without considering any new businesses or new wind farms for which SIPs provide
lowered property taxes.