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Department of Revenue outlines new cost‑allocation plan; committee forwards report to full Ways and Means
Summary
The Department of Revenue presented a proposed, updated cost‑allocation methodology to the Joint Committee on Ways and Means Subcommittee on General Government and provided examples showing winners and losers across revenue streams; the subcommittee moved the report to the full committee with the Legislative Fiscal Office recommendation to acknowledge receipt.
SALEM, Ore. — The Department of Revenue on Feb. 4 told a legislative subcommittee it has developed a modernized method for dividing administrative costs among the 64 revenue streams it administers, a change officials say will produce more accurate, data‑based allocations and require ongoing updates as programs and statutes evolve.
David Gerstenfeld, director of the Department of Revenue, described the work as the culmination of a third‑party review and multiyear stakeholder engagement prompted by a budget note in Senate Bill 5536. "Cost allocation is kind of how you divide up the pie," Gerstenfeld said, adding that the agency had not updated its methodology in more than a decade and had since taken on 17 additional revenue streams.
The proposed methodology distinguishes direct and indirect costs and uses program‑level measures — for example, charging human resources overhead by proportion of full‑time equivalent staff and allocating accounting costs by number of transactions. For complex collections work that touches multiple debts, the department proposes…
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