Portland State University Abandons Payroll Tax Ballot Measure

School strikes a deal with the Portland Business Alliance and other business groups to end the measure campaign.

Portland State University is abandoning a November ballot initiative that would have raised upwards of $35 million a year for scholarships through a payroll tax on metro-area businesses.

PSU President Wim Wiewel held a press conference this morning to announce he had struck a deal with the Portland Business Alliance and other business groups to end the measure campaign—after the business community pledged to raise $25 million a year for scholarships.

"The agreement is a very important breakthrough for the university and the region," said Wiewel. "We need a long-term solution, and today is a step toward that goal."

Backers of the initiative claimed polls showed rising support for the payroll tax, but did not disclose the polling numbers.

Both PSU and business groups said they wanted to avoid a costly and counterproductive showdown in November.

"It might have been possible to win the battle, but it might have resulted in the loss of the war, and that's what we want to avoid," said Greg Ness, chairman, president and chief executive officer of The Standard and board chair of the Oregon Business Council.

The PSU Foundation, which is the private nonprofit that serves as the university's fund-raising arm, has spent a remarkable amount of money on a ballot measure that had just reached the signature-gathering stage a week ago.

It had donated a total of $375,000, representing all but $140 of total donations to the initiative. The campaign has already spent $280,149. The campaign consulting firm Winning Mark, run by consultant Mark Wiener, received $137,302 of that.

Today's deal promises that the business community and PSU will work together to raise money by some other means. Possibilities including philanthropic donations, a future tax, lobbying the legislature for increases to student funding or incentives for donations to the university.

The tax's backers tried to paint the deal as a win for scholarship funding.

"A victory party is a little more fun," said Peter Zuckerman, co-chief petitioner for the ballot measure. "But on the other hand, our goal going into improve the lot for students, we did that a lot sooner than we ever thought we would."

The PBA released a statement celebrating its deal to end the measure—and pledged to help PSU find scholarship cash.

"The Alliance has agreed to work with PSU on a strategy to address the issues the ballot measure effort legitimately identified, and that is student access to college affordability in Oregon overall," the statement says.

The campaign had already gathered thousands of signatures in less than a week, Zuckerman said. But the initiative faced an uphill battle for support. The November ballot is crowded with four measures asking Portland voters to raise taxes, and PSU quickly encountered fierce opposition.

Backers of Portland Public Schools, which is seeking increased property taxes for a bond, had voiced opposition to the PSU measure, which was seen as the latecomer to the ballot.

Unions, which are backing IP-28, the statewide corporate sales tax, withheld support. And Portland businesses, which included some of PSU's donors, had fought the ballot measure in court—and lost.

Funds that remain from the campaign will be returned after an accounting is complete, said PSU Foundation board chair Marc Rosenbaum.