Portland Business Alliance "Cannot Support" Revised Street Fee Unless Income Tax Dies

Portland Mercury:

The Portland Business Alliance says it "cannot support" the revised $46 million Portland Street Fund unveiled today by Mayor Charlie Hales and Commissioner Steve Novick—mostly over Hales and Novick's bid to raise half that cash through an income tax without asking voters' permission first. "Unfortunately, the plan issued by city leaders on Monday falls short of the Alliance’s goals for this program, particularly in terms of the city’s long-term accountability for the program and acknowledgement that all Portlanders benefit from a well-maintained transportation system," PBA president Sandra McDonough has written in a draft blog post obtained by the Mercury. McDonough goes on to list four main issues, starting with the income tax and winding up with concerns over how the revenue will be spent, on maintenance vs. safety. The PBA, in a letter in October, had demanded 75 percent whatever's raised be spent on paving maintenance. This morning, Novick and Hales said 56 percent would be spent on maintenance, with about $15 million a year devoted to paving over the next three years. • The proposal calls for a new city income tax, the first in Portland’s history without voter approval. The Alliance opposes a city income tax and has urged the city to reconsider a user-fee structure. • Under this new plan, almost half of Portland taxpayers will be exempt from paying even a modest amount, contrary to the long-standing tradition of a user-pay system for street maintenance. This is a result of the structure of the proposed new income tax and the city’s inability to tax public retirement incomes (although private retirement income would be taxable). She's also not happy there's not going to be a sunset built into the plan or any timetable for a referral in several years. Hales specifically said he didn't support things, in part because he doesn't think it's right to tie the hands of a future council—but also because he doesn't envision a world where the city won't need this money to keep fixing its transportation system. The city needs $91 million a year to catch up just on paving needs—this would only provide some of that money. Hales is hoping to pressure the Legislature this year into raising the state's gas tax, which would give ODOT more money for projects in Portland and increase the city's cut of the gas tax. The proposal includes no sunset date, which means the taxes and fees could continue beyond the point at which the backlog is fully addressed without reconsideration of the need. Finally, it is not clear that a preponderance of the newly raised revenue would go toward paving maintenance, which was the initial impetus for creating this new program. McDonough nods to changes this summer meant to try to ease the PBA's (and others') indigestion. But she closes her piece by tying the PBA's support to the demise of the income tax—urging instead a flat fee paid by additional low-income Portlanders. Almost half of the city's income earners would be exempt in the current proposal. That's a tough offer. Without the tax, Novick and Hales might wind up losing any hope of getting a third vote Commissioner Amanda Fritz. And Hales and Novick are loath to consider a public vote, something else the PBA wants—even if that might buy support from Commissioners Nick Fish and Dan Saltzman. The Alliance has always supported the notion that residents and businesses should share equally the cost of maintaining the city’s transportation system, and we have steadfastly argued that the package as a whole should move forward in one piece. Therefore, we cannot support the package until the city addresses the issues in the residential component of the overall revenue plan, as well as the other problems we have identified. Read the full piece after the jump. Portland Business Alliance Urges Amendments to “Our Streets” ProposalBy Sandra McDonough, President & CEO Portland Business Alliance The Portland Business Alliance has consistently supported a well-maintained and safe transportation system. Since May, the Alliance has worked constructively to fashion a transportation revenue proposal that seeks to make progress on the $91 million backlog in deferred pavement maintenance identified by the city. The Alliance has acknowledged that additional revenue may be warranted to address the maintenance backlog and has negotiated in good faith toward a plan that included both new revenue and adequate assurance that a preponderance of the new dollars would be used to address the maintenance backlog. Unfortunately, the plan issued by city leaders on Monday falls short of the Alliance’s goals for this program, particularly in terms of the city’s long-term accountability for the program and acknowledgement that all Portlanders benefit from a well-maintained transportation system. Specifically, • The proposal calls for a new city income tax, the first in Portland’s history, without voter approval. The Alliance opposes a city income tax and has urged the city to reconsider a user-fee structure. • Under this new plan, almost half of Portland taxpayers will be exempt from paying even a modest amount, contrary to the long-standing tradition of a user-pay system for street maintenance. This is a result of the structure of the proposed new income tax and the city’s inability to tax public retirement incomes (although private retirement income would be taxable). • The proposal includes no sunset date, which means the taxes and fees could continue beyond the point at which the backlog is fully addressed without reconsideration of the need.• Finally, it is not clear that a preponderance of the newly raised revenue would go toward paving maintenance, which was the initial impetus for creating this new program. Over the course of the summer, significant progress was made in the structure of the proposed business fee, which would raise half the new revenue projected for this program. While we appreciate those changes, we remain very concerned about the proposed income tax for the residential side and the potential impact on people who live in Portland. The Alliance has always supported the notion that residents and businesses should share equally the cost of maintaining the city’s transportation system, and we have steadfastly argued that the package as a whole should move forward in one piece. Therefore, we cannot support the package until the city addresses the issues in the residential component of the overall revenue plan, as well as the other problems we have identified. [ Subscribe to the comments on this story ]

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