East Multnomah County businesses and education leaders are concerned about a new payroll tax proposed for all Metro district businesses that would fund Portland State University.

The PSU-backed citizen campaign would levy a 0.1 percent payroll tax on employers in the Metro district, which includes most of the tri-county urban Portland area. Half the money would go to scholarships, according to a story in the Portland Tribune.

“It will definitely provide significant financial support for Portland State students. However, between all the Metro area community colleges, we serve more students. I do have a concern about that,” said Debra Derr, president of Mt. Hood Community College.

“This is passing the burden to a lot of businesses that won't get anything out of it,” said Dan Corcoran, chief financial officer of McDonald & Wetle Inc. roofing company. “That doesn't pay back in benefits to the community, where a community college has programs that are designed to pay back in a relatively short time frame.”

Matt Miller, director at Gresham Sanitary, said he is not in favor of the proposed tax.

“It sounds like it's minimal, but I'm becoming more frustrated because everyone is piling on business with things like the minimum wage and gross receipts tax. I'm a fan of local community colleges and the universities in the state, and I do support those, but this is not the way to go about it.”

Chief petitioner Peter Zuckerman said the $35 million to $40 million expected to be generated from the proposed tax is desperately needed to offset lagging and insufficient state funding, said a story in the Portland Tribune, and Outlook news partner.

Under the tax proposal, a company that employs a worker at $50,000 a year would pay $50 to PSU. Likewise, if you employed 10 people, each paid $20,000 a year, you would owe $200 to PSU. The payroll tax would apply to all businesses within the Metro regional government boundaries.

The initiative petition to raise the new taxes was filed Friday, Jan. 29.

“College affordability matters to everybody in the tri-county region,” Zuckerman argued. “It means skilled and capable co-workers, a more resilient economy, money for vital services ... Investing in our workforce protects our jobs and our property values,” he told the Tribune.

“Education in Oregon has very definitive and very difficult funding issues, and I appreciate that Portland State is looking for a solution to that, but this solution doesn't include the community colleges,” Derr said.

Zuckerman heads a nascent citizen committee called Affordable College Now, which will spearhead the effort to get around 40,000 signatures to qualify the measure for the November ballot.

Known as the Local College Affordability Measure, the payroll tax would not lower tuition in general. However, at least 50 percent of the revenues would go to scholarships to residents of the Metro district. Supporters estimate this would benefit approximately 8,000 students. PSU currently has about 28,000 students.

About a quarter of the revenues would be dedicated to boosting the number and quality of teachers and class offerings. Another quarter would go to counselors and tutors trained in lowering dropout rates. Somewhere in there, a final 3 percent would go to emergency situations, such as students who have a sudden and documented shift in financial fortunes.

The payroll tax would sunset in eight years if not renewed by voters.

Zuckerman said accountability measures, such as annual graduation rate reports, are also in the measure. PSU estimates most of its 30 to 40 percent dropout rate is due to financial reasons, he told the Tribune.

“PSU is facing a college affordability crisis,” Zuckerman said. “People who work hard and want a better life used to be able to attend college, but now it’s much more expensive.”

PSU's average tuition for undergraduate Oregon residents is $6,741, with the additional costs of attendance estimated to bring the total annual cost to $23,349.

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