Senate bill aims to give rural counties more tax revenue

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Sen. Ferrioli proposes income taxes of public employees in certain counties go to county of employees' residence

A new proposal introduced in the Oregon Legislature seeks to provide rural counties more income tax revenue from its public employees.

Senate Republican Leader Ted Ferrioli, of John Day, recently testified on a proposal he introduced to distribute income tax attributable to state and federal employees back to the counties in which they live. Currently, all personal income tax revenue is deposited into the state's general fund. 

Senate Bill 391 is intended to help rural Oregonians fund essential services, such as police, fire and schools. The proposal applies to counties in which more than 50 percent of the land base is government-owned, or where more than 50 percent of employment is in the government sector.

According to Ferrioli, nearly 33 million acres — or 53 percent of the state's 62 million acres of total land — is owned by the federal government. About 60 percent of Crook County land is federally owned, which would make the community eligible for the proposal.

Ferrioli says the bill will strengthen rural Oregon by helping counties invest in essential infrastructure, and create jobs by infusing rural communities with capital. 

"We can innovate with public policy and with Senate Bill 391 we are creating more opportunity for a struggling population. You will see a close correlation between counties with low employment rates and high federal land ownership," he said. "Senate Bill 391 helps counties sustain their communities, especially in Eastern Oregon and Southern Oregon."

While the federal lands are not subject to property taxes, Ferrioli points out that they create a high demand for services such as fire protection, public safety and roads. He therefore believes the costs of these services place a burden on local areas and the amount of foregone property tax revenue as a result of these tax-exempt land parcels is significant.

Crook County Judge Seth Crawford said that more revenue for infrastructure and emergency services would help the community.

"All of those are integral parts of our community and we need to fund them to the best of our ability," he said. "The state is constantly adding unfunded mandates to county government, so any way that we can find to give counties additional funds without raising taxes on local businesses and citizens is a win to me."