Dialing For Dollars

[February 22nd, 2006] With Portland's leaders seemingly astonished that legislators left them to solve another school-funding crisis, the idea of a local tax on cell phones to raise money is resurfacing at City Hall.

At a hastily arranged education summit last week of business leaders, schools boosters and elected officials, City Commissioner Randy Leonard proposed resurrecting the idea of a 5 percent tax on Portlanders' cell-phone bill.

Pitch one for the proposal is straightforward: Hundreds of other cities levy such a tax. Pitch two has a bit more of a curve: With teenagers among the biggest users of cell phones, their gift for gab would indirectly help to raise cash for their schools.

"I ride the bus back and forth to work, and I go by Cleveland High," Leonard says. "There's a bunch of kids that get on, and half of them have cell phones on the whole time. Now, it's a little irritating. If we pass a cell-phone tax, it's, 'OK, yeah, keep talking. Is there somebody else you can call?'"

The cell-phone tax concept collapsed last year at City Council amid infighting. But Leonard says it's worth another look given that a summit task force has until March 9 to turn over cushions looking for coin to replace the expiring Multnomah County income tax.

The end of that three-year tax means budget cuts of about 12 percent for schools in the county. The hit lands hardest on Portland Public Schools, which as the largest district faces a $50 million cut next year from the lost tax.

At last Thursday's summit, Mayor Tom Potter was prepared to captain a poll-defying campaign for a city-wide income tax referral to raise the replacement cash. But his call got a resounding shrug from the roundtable, no doubt persuaded by political consultant Mark Wiener, who cited polls and focus groups showing most voters oppose a new income tax.

Even with city and county officials each pledging a few million dollars apiece for schools from their own budgets, Portland Public Schools and the five other districts within city limits would still fall a combined $90 million short next year without a new income tax.

Leonard says a 5 percent tax on cell phones could generate at least $20 million of that shortfall.

The original idea for a cell-phone tax came from Leonard in 2004, but the notion of dedicating that money for schools arose last spring from Commissioner Dan Saltzman.

At the time, Leonard and Saltzman squabbled when Leonard said the money should go to services like police and fire where the city has responsibility. But Leonard, a former state lawmaker, now says he agrees with Saltzman's earlier view until the Legislature provides long-term stable funding for Oregon schools.

With commissioners Saltzman and Sam Adams on board to consider Leonard's idea and Commissioner Erik Sten saying he would support the phone tax as part of a package, it seems the proposal has new legs on the five-member council.

And it's not as odd an idea as some might think.

Among the hundreds of local jurisdictions levying a tax on cell phones are San Francisco, Los Angeles, Seattle and, across the river, Vancouver, all at higher rates than Leonard's proposed 5 percent.

Of course, the industry will rise in opposition—the day after Leonard broached the idea, City Hall phones buzzed with unhappy calls from telecom lobbyists.

And they'll have their megaphone in conservative naysayers like Lars Larson. The radio resentment-rouser set up a table directly outside the summit at the Convention Center, all the better to catch pols live with questions such as "Erik Sten, could you take a moment to explain to voters how much you're going to raise their taxes?"

Leonard realizes a cell-phone tax would still leave a long way to go to fill the budget hole. And despite Potter spending months on fruitless talks with suburban schools on a regional solution to the school-funding crisis, much of the ultimate responsibility for the education debacle rests with the Legislature.

The three-year, county income tax was meant to serve as a bridge, forestalling budget cuts until the Legislature could deliver on its 16-year-old promise of adequate and stable long-term funding for schools.

While the cell-phone tax isn't a panacea in itself, Leonard says a local phone tax at least "should be a large part of any solution."