Portland State University's private fundraising foundation and the Portland Business Alliance agreed to a deal to end the PSU's proposed payroll tax because wanted to avoid an expensive fight over the ballot initiative, representatives from both sides say.

Portland State University Foundation board chair Mark Rosenbaum and Portland Business Alliance president and CEO Sandra McDonough both tell WW that the threat of a costly ballot battle helped motivate the two sides to hash out a deal: a promise for the business community help to raise $25 million a year by 2019.

Both say they were part of meetings to hash out a deal, but both declined to say if others—including PSU president Wim Wiewel—joined them at the table.

Those talks got serious three weeks ago.

"Frankly, the decision point was the foundation and other contributors would have to put in substantial additional funding," said Rosenbaum, noting the thinking was "if we're going to stop this, we had better stop this here, because it's all this money on both sides."

McDonough agreed.

"I think people were considering money being spent and didn't want any more than was necessary. They were going into an expensive phase. We were all aware that," said McDonough, noting that some of her members are some of PSU's biggest backers.

McDonough said PBA had asked for the meeting but "both sides came together."

The PBA was a key opponent to the measure, applying public pressure beginning in December.

When the foundation, which is PSU's fundraising arm, began making a series of donations to the campaign, McDonough told WW donors were opposed to dollars being spent on the campaign and were rethinking whether to donate in the future. (The foundation ultimately donated $375,000.)

"It was a consideration," acknowledged Rosenbaum, who countered, "We also had donors that said bravo."

Oregon has seen ballot initiatives used as a political bargaining chip, then abandoned. In this year's session, the Legislature reached a deal on raising the minimum wage under pressure from advocates who then abandoned a $15-an-hour campaign.

But at a press conference on Friday morning, PSU president Wiewel denied that he'd gone to the ballot as part of a strategy.

"I'm not that smart," he said jokingly.

Wiewel has been pursuing the idea of a payroll tax for years, and the decision to break up the university system in 2014 opened up fundraising opportunities.

"I've been thinking about a regional approach for many, many years," said Wiewel, noting he talked to then-governor John Kitzhaber about the idea four years ago.

A new tax isn't completely off the table. It's one of the approaches that the business community will consider.