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Will street fee include new city income tax?

As the City Council prepares to discuss the controversial street fee proposal on Monday, support is growing for it to include a progressive city income tax to fund maintenance and safety project.

Representatives of several organizations recently endorsed the concept of a progressive income as part of the final street fee proposal. They include 1000 Friends of Oregon, the Bicycle Transportation Alliance, the Coalition for a Livable Future, the Community Alliance of Tenants, the Community Cycling Center, Elders in Action, OPAL Environmental Justice Oregon, AARP Oregon, the Oregon Environmental Council, Oregon Food Bank, the Oregon Opportunity Network, Oregon Walks, the Safe Routes to Schools National Partnership, and Upstream Public Health.

"We strongly support a progressive revenue structure with adequate discounts for low-income members of our community. Portland is experiencing an affordability crisis and growing income inequality, with rising transportation costs a major factor," reads part of an Oct. 8 letter to the City Council signed by most of the representatives.

The letter says tax payments should be capped at $200 a month -- or $2,400 a year -- for those earning the most money.

"This proposal helps move us towards a city where everyone can prosper," the letter says.

The letter also says several issues must still be addressed in the final proposal for their organizations to support it, however. They include whether the fee will raise enough money to make a significant difference, and whether it will be evenly split between maintenance and safety projects.

The letter also says the fee sunset after 10 years, although the council could decide whether to continue it. The letter did not specifically say whether or not the fee should be approved by the voters before it is enacted.

No such proposal has actually been introduced for the City Council to consider, but it will be discussed as one of several options during a work session scheduled for Monday afternoon. It is scheduled to begin at 3 p.m. in the Council Chambers at City Hall.

A council vote on a final proposal is tentatively scheduled for Nov. 12.

Commissioner Steve Novick says he prefers a progressive income tax to a flat fee on households, which was included in the original street fee he proposed with Mayor Charlie Hales in May. Novick has not yet endorsed a new proposal, however, and will not until after the work session.

"Well, I've made it clear that I prefer something income-based, so naturally I would look more favorably on something where higher income people pay significantly more than middle-income people," Novick says.

"But we'll see how things shake out."

A progressive income tax is among the options considered by three work groups appointed by Hales and Novick to help draft a new fee proposal that responds to criticisms of the original one. Making poor and rich residents pay the same for street-related projects was one of the criticisms.

Also discussed was assessing a fee on businesses that varies according to their size and category. It would replace the business fee in the original proposal, which was based on the number of motor vehicle trips that are estimated to generate.

Allowing discounts or exceptions for governments and nonprofit organizations was also discussed.

The street fee originally proposed by Hales and Novick was intended to raise around $53 million for maintenance and safety projects. It was designed to raise the revenue 50/50 from residents and businesses, and to spend the funds 50/50 on maintenance and safety projects. The Oct. 8 letter says those principles should apply to the final proposal.

"Applying these principles and our on-going support for building a livable, engaged community for all ages, AARP Oregon supports the passage of a revenue proposal that includes a 50/50 expenditure split between safety and maintenance projects and a taxation that is progressive, preferably with a $200 cap for those with highest wealth and income," AARP Oregon Director Gerald Cohen wrote in a separate Oct. 9 letter.

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