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Hearing set for latest street fee proposal

Progressive income tax may be included in revised plan


The first City Council hearing on the revised Portland street fee is set for 2 p.m. on Nov. 20 at City Hall.

Although Mayor Charlie Hales and Commissioner Steve Novick have not released a final version of their proposal, it apparently will include a progressive personal income tax for the residential portion. Novick recently noted that local income taxes can be deducted from federal taxes, potentially reducing the impact on those with higher taxes who would pay the most.

“So if we have a transportation income tax, people who itemize will actually be out of pocket less than the face amount,” Novick wrote in an Oct. 31 email.

Representatives from more than a dozen advocacy organizations, including AARP and the Coalition for a Livable Future, say they are willing to considering supporting a progressive income tax for maintenance and safety projects, with some suggesting a cap of $200 a month for the wealthiest Portlanders. In his email, Novick noted that city residents whose payments are capped at $200 a month could end up paying $120.80 a month if they itemize their taxes.

It is unclear whether Hales and Novick have agreed to cap the monthly payments at $200, however. During an Oct. 13 council work session on the evolving proposal, Hales said he supports capping the payments at $50 a month. Novick notes that would increase the tax on people with less money if the proposal is still intended to raise $20 million or so from city residents, which is what the council was told.

“Reducing the cap at the top increases the payments in the middle,” Novick says.

When Hales and Novick unveiled the fee in May, they proposed to assess all households $144 a year to pay for maintenance and safety projects. That proposal was criticized by advocates for low-income families as hurting those who could least afford it. Commissioner Amanda Fritz, who was considered the most likely third vote on the council for the fee, said that concerned her as well.

Hales and Novick apparently are substituting a progressive income tax to address those concerns. Lower-income individuals will be except from the tax, and those earning the most will pay the most. State law also prohibits cities from taxing Public Employees Retirement System payments. That is also true of the city’s $35-a-year arts tax, which does not apply to people living in households with incomes below the poverty line.

Exactly where the tax would kick in and how it would progress to the highest income levels may not be revealed for another week. The final proposal will have to be filed with the City Auditor’s Office by Nov. 13 if the first hearing is Nov. 20. The date for the vote has not yet been scheduled.

Details on property fees unknown

Hales and Novick also have yet to detail the other half of the fee — the portion imposed on nonresidential properties. But it appears to have changed as much as the residential portion.

The original proposals would have assessed nonresidential properties a fee based on how many motor vehicles they generate, as estimated by a formula developed by the Institute of Transportation Engineers. It would have applied to businesses, nonprofit organizations and government agencies.

That idea also ran into resistance, and Hales and Novick now appear to have substituted a formula based on such factors as the business classifications and sizes. Nonprofits and government agencies could get discounts or be entirely exempt. The exact details have not been released yet, although one estimate says businesses could pay between $2.50 and $120 a month.

The potential charges apparently are reducing the amount the revised fee will collect. The original proposal was estimated to bring in $53 million a year. At the Oct. 13 council work session, Hales and Novick talked about $40 million a year. The revenue still would be divided between maintenance and safety projects, however, which was the original goal. The final percentages have not been announced.

The changes have not silenced all the original critics. Grassroots opponents are criticizing every twist and turn on a Facebook page called Stop Portland Street Fee. “Property tax, leaf tax, water tax, art tax and now yet another tax? When will it stop?” according to one recent post.

Many of those on the page also insist the council must refer the fee to the ballot for approval before it is enacted. Hales and Novick still oppose that, but have suggested it could be placed on the ballot after Portlanders have seen how it works for a few years.

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