By Don MacGillivray
Portland’s Street Funding proposal has undergone much review by both business people and residents and it still remains a question in the minds of the public.
The Fund is intended to address the five high crash corridors in SE Portland and many neighborhood streets in poor condition. Currently Portland has 4,827 lane miles of roadway and they have not received proper maintenance for over twenty years.
The new Street Fund is expected to raise $46 million annually, and will positively impact street maintenance, repair, and safety over the next ten years.
The funding conversation began in January of this year and preliminary proposals were reviewed at hearings held last May. Over the summer, three committees representing both business people and residents met to improve the proposals.
After months of public discussion, many improvements were suggested, but it was impossible to reach a decision that pleased everyone. It is agreed that the Street Fund proposal is much improved, but there seem to be more critics than supporters.
The calculation of the business fee went from using 11,000 accounts to generate $26 million to 120,000 accounts generating $23 million. This new approach resulted in decreased fees to most businesses.
The second change involved combining business categories from over 100 groups into only five. This simplifies both the administration and calculation of the fee.
The Street Fund proposal for businesses will charge between $3 and $144 per month based on the business type, the number of employees, the gross revenue, and the business’ developed square footage.
For non-profit organizations the business fee will be one-half of the charge for a profit- making business. Government entities will pay the full amount.
The discount for small business owners who are Portland residents is no longer part of the proposal and the previous sunset provision is removed.
Residents will pay a graduated, deductible income tax with a $5,000 credit for children. This will shift the burden away from low-income residents.
Joint filers with an annual income less than $35,000 a year will be exempt from the tax. A couple making $65,000 a year with two children would have an adjusted income of $55,000 and will pay $5 per month. The cap on the residential fee will be $75 per month for couples with a combined income of $350,000 per year and above.
The fee is a progressive personal income tax for the residential community and a sliding fee for businesses. 56% of the street fee will be used to preserve and repair the road surfaces and 44% will be used to make the roads safer.
The Fund hopes to provide $45 million in the first three years for preventive maintenance and street paving. After 10 years, more than $650 million in more expensive road rebuilds will be saved.
Just under 40% of the first three years of safety improvements will be made in E. Portland.
The Revenue Bureau estimates the cost of collecting fees for the first year will be about $4.6 million and decrease to $3.3 million in subsequent years. The Bureau also anticipates a 63% compliance rate in the first year which will increase to 85% by the third year.
Together, neighborhood business districts contain 19,000 businesses and provide 250,000 jobs. Neighborhood businesses are the driving force behind Portland’s economy.
Mayor Hales and Commissioner Novick believe the council must adopt the fees as soon as possible. Commissioners Dan Saltzman and Nick Fish have said that they will oppose Street Fees unless they are voted on by the public, while Commissioner Amanda Fritz has not expressed a firm opinion.
A coalition of non-profit organizations is willing to work in support of the new street fee.
A concern has been that major users of the roads will not pay their fair share. Heavy vehicles and trucks cause more damage to the roadways than cars, bicycles, and pedestrians.
Portland serves a major seaport, twelve rail yards, an international airport, and a host of truck depots. Heavy vehicles use 40% of all the petroleum consumed in the City of Portland and it is expected that the large trucking companies, corporations, and hospitals will pay a very small percentage of the total street fee.
Others believe the Oregon state weight-mile tax is enough of a burden for trucks. A 20 ton truck pays a $515 a year weight tax and a tax of 6.5 cents per mile.
An idea that has not surfaced yet is using the existing electronic toll collection technology and variable pricing to collect a road tax for maintenance. This is being used in several cities in the United States and is said to be the fairest, most sustainable replacement for a gasoline tax.
The State of Oregon has adopted a Road Usage Charge test program where vehicles will pay 1.5 cents per mile by equipping each vehicle with a meter to report their mileage.
The program will begin in July, 2015 and money collected from the test period will be distributed as follows: 50% to the state, 30% to the counties and 20% to the cities.
If the current Portland Street Fund proposal is not the right one what will the right one be? City Council is expected to vote on the fee no earlier than December 3, but results of the November 20 hearing may affect the decision.
The PBOT website has links to allow everyone to calculate business and residential rates for their unique circumstances: portlandoregon.gov/transportation/64188
If you have questions, contact project staff at email@example.com.