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Battle lines drawn in street fee fight

Novick, Hales don't want plan on ballot; referral drive planned

Businesses squared off against unions and liberal advocacy organizations over the street fee at last week’s City Council hearing, revealing how the two sides could line up if it’s referred to the ballot.

One wild card is the city’s neighborhood associations, however. Several of their representatives raised numerous questions about the proposal during the hearing.

The revised fee presented by Mayor Charlie Hales and Commissioner Steve Novick now includes a progressive personal income tax and a sliding scale for businesses, governments and nonprofit organizations. Renamed the Portland Street Fund, it is intended to raise $46 million a year for maintenance and safety projects, minus administrative costs.

Hales and Novick are refusing to refer their proposal to voters. Commissioner Amanda Fritz, the potential third vote, expressed interest in attaching a sunset clause to the proposal, meaning it would expire after a set number of years if it is not renewed.

But lobbyist Paul Romain testified he and others are prepared to help refer the proposal to the ballot if the council approves the current version without a public vote. Romain says he and others in the business community have solicited bids from professional petition signature-gathering firms, and are discussing raising money for the signature drive and subsequent campaign to repeal the proposal.

“We’ll be ready to go if the council approves it without putting it on the ballot,” said Romain, whose clients include the Oregon Fuels Association, which represents fuel and heating oil distributors, retailers and marketers.

If the referral drive is successful, the proposal could appear on the same May 2016 primary election ballot where Hales and Novick will be up for re-election. Romain says Novick is framing the fight as a dispute between the rich and the poor.

“Novick is an avowed wealth distributor. His goal is to take money from the haves and give it those who don’t have as much,” Romain said.

Although that strategy could appeal to Portland liberals, Romain believes the current proposal is so flawed that most voters will reject it, especially if the council doesn’t refer it to the ballot.

“Then they’ve got to deal with issues like arrogance of power and creating two new taxes without asking voter approval. Raising an existing tax is one thing, but creating a new income tax and a new business tax is totally different,” Romain said.

Proposal has backers, foes

Testimony at last week’s hearing was polarized around several elements in the proposal, with supporters and opponents falling into similar camps on each one. For example, the Portland Business Alliance said it could not support the proposal because of the income tax. A member of the East Portland Chamber of Commerce agreed. But Paul Cone, representing City of Portland Professional Employees Association Local 17, said his union supported the proposal. And Oregon AFL-CIO President Tom Chamberlain said organized labor supports progressive taxes, even though his organization has not yet taken a stand on the proposal.

Some business owners opposed the proposal for other reasons, however. They said the proposal potentially could tax them three times — once as city residents subject to the income tax, once more as business owners subject to the nonresidential fee, and once again as business property renters whose payments will increase when landlords pass on their nonresidential fees.

Not all businesses opposed the proposal, however. A NW Grocers representative testified in support of the nonresidential fee. That’s a switch from when the original proposal was released in May, and something of a surprise since the Kroger grocery chain would pay the second-highest amount, $4,200 a month.

The idea of spending 46 percent of the available revenue on safety projects also split the crowd. Such projects, including more sidewalks and street crossing in East Portland, helped win the support of advocates for the poor, the elderly and the environment, including AARP, OPAL Environmental Justice, and the Coalition for a Livable Future. But a representative of BOMA, the commercial real estate owners association, said maintenance should be the top priority because of the deteriorating condition of so many Portland streets. The PBA agreed.

Several neighborhood leaders complained the nonresidential fees were not well thought out. They included two members of the board of Southeast Uplift, the influential neighborhood coalition office. President Robert McCollough and Vice Chairman Don Gardner questioned the fairness of the nonresidential fees, saying it lets large road users, such as the Port of Portland and the Union Pacific Rail Road Brooklyn Yard, pay less than some smaller ones.

Even exempting lower-income Portlanders from paying the income tax proved divisive. About 40 percent of residents would pay nothing under the proposed tax brackets. That pleased a number of liberal advocacy groups. But resident Inga Fisher Williams described it as a divide-and-conquer strategy.

The proposal is divided into two ordinances, one creating the residential income tax and the other creating the nonresidential fees. The council could pass them as early as Dec. 3. If the council does not place them on the ballot, opponents will have 30 days to collect signatures from 20,897 registered Portland voters for each one of them — a total of 41,794 valid signatures. If enough valid signatures are collected and submitted to city elections officials, the proposal will not take effect unless it is approved by the voters.