Portland Business Alliance Says if Street Fee Includes Income Tax, They'll Likely Refer It to Voters

Portland Business Alliance president Sandra McDonough tells WW that unless Portland City Hall removes a personal income tax from the street fee, the business lobby will probably help refer the $46 million proposal to voters.

"It's down to this one detail—and we don't understand why they won't move on that," says McDonough. "We are talking to the folks who are looking at a referral. If we don't see a substantive change, we are likely to be part of it."

PBA officials have met with Mayor Charlie Hales since he and City Commissioner Steve Novick revealed their latest street funding proposal on Nov. 11. The new plan, expected to raise $46 million a year, includes a steeply graded income tax that starts at $60 a year and goes up to $900 a year. 

McDonough tells WW the income tax is a deal-breaker.

"We have really set out to work with City Hall on this, and we're ready to agree to a fee on business, which is not something we do every day," McDonough says. "We're not comfortable with the city establishing an income tax—period. That's a whole new taxing mechanism for the city of Portland."

McDonough first expressed opposition to the income tax component of the street fee on Monday, warning on her OregonLive.com blog that the city would lose PBA support if the income tax wasn't removed. That position has now intensified to the level of discussing voter referral, she says.

"We had a board meeting this week that solidified our position," McDonough tells WW.

Hales and Novick do not appear to have budged. The street fee is scheduled for a Dec. 3 vote, the Portland council clerk's office confirmed this morning it had received ordinance filings on the proposal.

UPDATE, 1:35 pm: City Commissioner Steve Novick says that there's reason to believe voters would support an income tax.

"I'll say this," Novick tells WW. "The people speaking out against our proposal seem to be the same people who opposed Measure 66. Measure 66 got 70 percent of the vote in Multnomah County as a whole, and I'm sure it didn't do any worse than that in the City of Portland."

Novick, who first proposed an income tax in July, says that he doesn't understand the opposition from wealthy Portlanders.

"I will also say," Novick adds, "that I'm puzzled by the idea that some people making $500,000 a year or so are mad about the idea of having to spend a fraction of one percent of their income to have a functioning local transportation system. My wife and I would pay $32 a month under our proposal, and that seems fair to me. Heck, we spend $80 a month on DirecTV.

"I would also ask Sandy: under our proposal, couples making $55,000 a year pay $5 a month. How much does she think they should pay?"

UPDATE, 4:45 pm: Jonathan Ostar, the executive director of advocacy nonprofit OPAL Environmental Justice Oregon, says business groups including the PBA received numerous concessions as the street fee was developed over the summer—and are still trying to "hold the process hostage."

"Over my objections, the City has made numerous additional concessions to the business stakeholders," Ostar tells WW. "For the business community to now try to hold the process hostage for further concessions, after the City has already bent over backwards to meet virtually all of their demands, calls into question their good faith."

Ostar says he objected this past week when city officials agreed to cap the highest income tax at $900 a year instead of $2,400 a year—pushing more tax burden on middle-class households. He says that change was made at the request of business groups.

"Millionaires will now be assessed a lower tax rate than those making $30,000 per year," Ostar says. "Is this progressive? Of course not. But given the relative progressivity overall—both in terms of revenue and distribution of investments—we're supporting this. We hope our City Council will show the courage to press forward in spite of the business community's incalcitrance."

WWeek 2015