Portland Commissioner Steve Novick wants the city to tax public companies that pay big salaries to their CEOs, WW has learned.
Novick's populist proposal, which is taking shape as he tries to thwart a re-election challenge on the left from first-time candidate Chloe Eudaly, would impose a surcharge on corporations that pay CEOs in excess of 100 times what they pay average employees.
The surcharge would be on top of the business license taxes that companies already pay the city and would be calculated using salary records newly disclosed to the public under federal reforms by the U.S. Securities and Exchange Commission.
The proposal, sources tell WW, calls for imposing a 10 percent surcharge on corporations that pay their CEOs 100 to 250 times what they pay a typical employee, and a 25 percent surcharge on companies that pay their CEOs more than 250 times what they pay a typical employee.
Novick's latest tax proposal piggybacks on a change from the Securities and Exchange Commission that will require public corporations to disclose information about their CEOs' salaries starting in 2017.
It also comes on the heels of a rancorous public debate over Mayor Charlie Hales' failed attempt in May to raise the city's business license tax .3 percentage points to 2.5 percent, an idea that would have generated an additional $8 million a year at a time when Portland already enjoyed record tax revenue.
Novick joined a majority of colleagues in nixing the idea, saying Hales' proposal threatened to undermine support for his 10-cents-per-gallon gas tax then heading to a vote. (Portlanders went on to approve the gas tax to support road improvements on May 17.)
Despite record revenue, Portland is in need of additional money to fund a joint office with Multnomah County to combat homelessness. Although the city has committed to funding the office with $15 million a year, it has so far set aside just $11.5 million.
Novick's proposal could generate about $2.5 million a year and could be earmarked for the homelessness office. A work session to discuss the city's efforts with the county is scheduled for Sept. 22, when Novick is expected to address his proposal.
Novick faces a serious challenge in the November general election in part because of his botched attempt in 2014 to pass a so-called street fee—a tax on most all Portland residents and businesses to pay for road improvements. It proved deeply unpopular and would have hit most voters.
A tax on wealthy CEOs could prove more popular with the voters Novick is trying to court in his November re-election battle. It may also take steam out of Eudaly's campaign, which has charged for months that Novick has done nothing to combat Portland's affordability crisis.
Novick was not immediately available Monday to comment on his proposal. But in an email he wrote that he first considered the idea after reading a 2014 article in The Washington Post about a similar proposal in the California Senate.
The newspaper issued the following clarification: "Steve Novick says he appreciates and celebrates the civic value of taxes. A Page One profile of Novick on Monday overstated his fondness for taxes, according to Novick."