The district was formed by the Clackamas County Board of Commissioners in 1989, originally as the Molalla Transportation District (and later renamed South Clackamas Transportation District), to replace TriMet service. Molalla withdrew from the TriMet district on January 1, 1989. In the 2001 Fiscal Year (which started on July 1, 2000), the district's budget was approximately $700,000 ($935,000 2015). SCTD is funded by an employer payroll tax levied on employers within the district's boundaries. As of 2000, the tax rate was three-tenths of a percent. The current rate is five-tenths of one percent (0.5 percent).