Portland Business Alliance, Commissioner Sam Adams

[March 22nd, 2006] Among the bailout ideas popping up for Portland schools like spring crocuses is a Roguish notion from the folks at the Portland Business Alliance that's got Commissioner Sam Adams cheering them on.

Last week, PBA chairman Scott Andrews offered to pony up $9 million for schools by agreeing to extend an otherwise-expiring 3-year-old surcharge on the license fee that businesses pay the city.

But even a $9 million gift horse should get looked in the mouth.

PBA support for extending the surcharge over two years depends on the City Council agreeing to increase the personal deduction business owners can take on their license fee. The proposed increase of the deduction from $60,000 to $125,000 is similar to what Adams proposed, unsuccessfully, last spring.

According to the city's Office of Management and Finance, that increase in the deduction would cost the city up to $5 million per year.

Thus, the PBA offers up to $9 million over the next two years for schools, but demands the city give up as much as $10 million of tax revenue in exchange, and presumably another $5 mil or so every subsequent year. Talk about the gift that keeps giving.

The PBA's argument that doubling the deduction will help small business may make sense, but that's a separate debate from what should be done to raise money for schools during a crisis.

Commissioner Erik Sten calls the PBA's offer to support financially strapped schools in exchange for an immediate tax break "a cheap tactic."

As for Adams, he's urging colleagues to approve the increase and lauding business for being "a financial partner" in addressing schools' needs. He tells WW that raising the owner's deduction is long overdue to help small business.

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