A Quick Fix to the Portland Street Fee

By Jamie Woods of Portland, Oregon. Jamie is an economics professor and former school board member from East Portland.

Now that the decision about the residential part of the street fee is pushed back to November, it gives us some time for a cooler and more considered assessment of what can be accomplished.

Yes, the proposal, in spite of the reduction for lower income Portlanders, is regressive. The fees are regressive because we were all going to be charged the same price for different services. People that live on well paved roads, with safe intersections, in walkable neighborhoods will pay the same as those on a gravel road, near an intersection that kills a few people every year.

This focus on transportation service where folks live is different than what the city council has been considering. They have been focused on trips traveled and heavy vehicles. People value what they see every day, not abstract transportation services, but the physical items near them and their property.

Start with the current, postage stamp fee, and then give a household a discount if they front on an unpaved road. Give them another discount based on how many people are injured at local intersections. Give them another discount if their neighborhood is not walkable. Give them a discount if their street has less than five years of useful life.

You get the idea.

On top of that, give them a discount for being low income. If we do it right, a low-income person living on a bad road with dangerous intersections will get a check from the city -- along with an apology.

This small change addresses a lot of the criticism directed at the current plan.

This system has the advantage of aligning revenue collection with services provided. If the bureau of transportation wants more revenue for a bridge and other project, they don't go to the city council, they improve walkability in East Portland or pave a road. If they want more revenue for a public transit related project -- they fix a dangerous intersection. Traffic related deaths in the neighborhood bring down neighborhood fees and will be more quickly addressed.

For the economists reading this, I'm making an emotional appeal for an incentive compatible contract, between the citizens and the city, for services.

Linking the fees to performance also address the fears expressed in the survey that the fees can be siphoned off for other purposes.

The performance linked fees will supplement an advisory board, something the current proposal lacks, is advisable, but advisory boards come with risks. Advisory boards depend on outside, well-motivated, knowledgeable individuals to participate. East Portland and other underserved areas don't have those kinds of experts to advocate for them. That is why these mechanisms work well for well-educated and well-served communities but fail for others. The revenue costs of parochial decisions will put a damper on some of the worst aspects of an advisory board.

I say, keep the fee, but make a few adjustments to how it is paid.

June 25, 2014 Posted in guest column.