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Our Opinion: Business tax increase a bad idea


Portland Mayor Charlie Hales’ proposed 14 percent increase in the business license tax is an affront to commonsense and fiscally unnecessary. The four city commissioners — Nick Fish, Amanda Fritz, Steve Novick and Dan Saltzman — should reject it out of hand and let the mayor know his proposal is ill-timed and illogical.

Normally, we would be sympathetic to the causes Hales says his tax increase would support: homelessness and public safety programs. However, Hales’ suggestion to increase the city’s tax from 2.2 percent of a business’s profits to 2.5 percent isn’t coming at a typical time.

Consider these factors:

• The city just reported it has a surplus of $25.6 million in its coming fiscal year budget. This is the second year in a row that the city has taken in more money — and spent less — than projected.

• Portlanders are voting in the May 17 election on a proposed 10-cent per gallon city gas tax, which will be dedicated to safety and road improvements. Certainly, businesses will pay their share. Plus, Novick, the transportation commissioner, is following up with a plan for an additional tax on the trucks and “heavy use” vehicles that businesses utilize.

• Businesses in Portland already are trying to figure out how they will absorb a legislatively mandated 59 percent increase in the minimum wage over the next several years. By the time the wage hikes are fully implemented in 2022, the minimum wage in Portland will be $5.50 an hour higher than it is today.

• Businesses also saw their costs increased when the city mandated paid sick leave for employees in Portland who didn’t have that benefit already.

• The city also has changed the way it assesses systems development fees when new projects are built. This means developers will pay a higher fee on most new construction, with the additional revenue going to parks.

• TriMet just increased its payroll tax on businesses.

• Portland State University is proposing to levy its own payroll tax on businesses via a November ballot measure.

On top of all the above, Portlanders have increased their property taxes to pay for park maintenance and to pay for school construction and remodeling — and they will be asked again in November to approve additional school bonds. Businesses — like residences — get hit with these new charges.

So, to summarize: Portland’s city government has more money than it ever has before — and more than it anticipated for the next fiscal year. The city’s small businesses already are facing higher costs, due to actions taken by the City Council, the Legislature and other local government agencies.You would think Hales would be sensitive to the new tax burden that businesses have recently been asked to carry, but he did not even seek their input on his plan to raise their taxes yet again.

It’s worth noting that many members of the business community — including the Portland Business Alliance — were willing to compromise and work with policymakers on the minimum wage plan and the gas tax. Now, Hales has cooked up a whole new way of raising money without consulting the people who would have to pay it.

So much for consensus building and cooperation. Hales should withdraw his proposal, or his fellow city commissioners should reject it. Two — Dan Saltzman and Steve Novick — have already indicated plans to do just that. We trust they will pick up a third vote.

There may come a day when incremental increases in the business license tax are needed, but this is not the time.