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LINDA CARGILL
THE MID-COUNTY MEMO
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| If new city Commissioner Steve Novick has his way, every residential property and business owner will be paying a monthly street maintenance fee in the near future. Ross William Hamilton/The Oregonian |
The proposed tax is based on the size of the business and the number of monthly vehicle trips to each location. Venture Portland, a nonprofit umbrella group for Portland's business associations that gives grants and other help to business associations, organized the April 16 workshop for businesses at the Portland Building. Mayor Charlie Hales, City Commissioner Steve Novick and other city officials from the city's transportation bureau outlined the new plan. After hearing the speeches, some business owners in the audience complained the new tax would burden businesses unfairly, some of the larger ones paying as much as one or two thousand dollars per month in fees.
Hales told the gathering that the city's usual resources for street maintenance have dried up in recent years. The federal government has not kept the gas tax up with the rise of inflation over the years. “It was never indexed,” Hales said. “It's been at 18 cents a gallon for a long time.” He added that state funding for street maintenance has not trickled down enough to the city level adequately to maintain streets. “We own these streets; we're responsible for them, and we should step up and figure out a way to take care of them,” Hales said.
The city attempted to use current resources to focus them even more closely on catching up partially to that giant backlog, he said. “Before we took office, the city was paving about 30-lane miles of streets each year, and we made a commitment to take that up to 100 miles.”
He noted the city will meet or exceed that goal this year, thanks to Leah Treat, the new director of the city's Bureau of Transportation and her staff.
Heather Hoell, director of Venture Portland, said she was pleased the Mayor and city officials said “they really wanted to hear from business” and it was a “testament to how important all of you, as neighborhood businesses, are to the city.”
Novick, who oversees the Transportation Department, told the assembled, “We need an adequate transportation system so that your customers can show up and buy stuff and so that freight trucks can show up and drop stuff off. We need your colleagues to know that, we need your customers to know that.”
Novick said some of the concepts-first envisioned seven years ago when the city worked with businesses-are outdated, and now the city needs more money than it did then. “Roads are like teeth,” he said. “If you don't do regular brushing and flossing and cleaning, then you get into extractions and root canals. And that's more expensive so we are in a more expensive place than we were seven years ago.”
Mark Lear, a traffic safety programs manager with the Portland Bureau of Transportation, said the city hopes to have a funding proposal to present to the public by May and to the City Council by June for a vote. The first phase of the funding research involved town meetings and a telephone survey of 800 city residents.
The public's priorities include “the maintenance of our streets, especially our busiest streets, and dealing with our critical safety issues, both on our busiest streets and around schools and neighborhoods,” Lear said.
The public would like the city to collaborate with the Oregon Department of Transportation and TriMet to work on projects. Their highest priorities are maintaining seismically sound bridges in the central city core and dealing with transit issues along 122nd Avenue. He noted that 28 Oregon cities have adopted street user fees to solve the street maintenance problem. When asked in the survey, most people supported the street maintenance and safety fee over other funding models, such as a property tax bond, a city sales tax or a state income tax.
The first-time surveyors asked residents if they would support an $8-per-month household fee; 49 percent opposed it and 47 percent supported it. However, when the surveyors added questions, such as making sure the money was dedicated to safety and maintenance, plus adding low-income household discounts, then the support jumped to 51 percent with 44 percent opposed. The city also created a second scenario, using a $12-per-month household fee.
The way the city calculated what each business would pay was based on a certain number of cents per trip-such as three or four cents-generated to that business's location, as well as the square footage of the business. Therefore, if a household paid $8 a month, a small cafe might pay $29 dollars a month, a restaurant, $130 and a multi-screened movie theater-with 20,000 trips per month-would pay $344 a month.
Lear explained that 67 percent of the businesses in Portland generate fewer than 5,000 trips per month. Therefore, the majority of businesses would pay between $8 and $126 a month at the $8-per-month rate, whereas those same businesses would pay between $12 and $194 a month at the $12-per-month rate.
By comparison, with the state and county gas tax revenue, the average household pays $25 a month in taxes, with only 11 percent coming back to the city. Using the $8- or $12-per-month model, “100 percent comes back to us and we decide how to spend it,” Lear said.
In the survey, the public helped outline specific projects to spend the money on, such as paving streets, making signals work, creating stripes that people can see, signal rehabilitation, safety crossings, rapid flash beacons and new sidewalks.
Most people did not want the fees attached to water and sewer bills, he said.
When asked by an audience member how long the taxation program would last and whether or not the money would go to its intended purposes, Hales said it could be five or 10 years, or a permanent program, but stressed that no decision had been made. Creating the revenue as a dedicated fund strictly used for street maintenance and safety would ease the public's concern after its loss of confidence following the misuse of water and sewer revenues in the past.
Another audience member predicted that some businesses would challenge the city's calculation of how many trips were taken to their locations.
Bureau of Transportation Director Leah Treat assured the questioner that the city would “create an appeals process for businesses who disagree with their assessment of trips.”
Hales said he hoped to institute the taxation measure as a City Council decision, rather than through a ballot measure vote.
Hoell said 98 percent of businesses have five or fewer employees and asked if they are paying a “double tax as a business and as a resident.”
Lear replied, “The answer is 'yes' if they're in business and showing up on the tax records as a business.”
Novick said the plan is to work on the areas that need the most improvement first, dedicating money right away to those projects like outer Southeast Powell Boulevard, which has been identified as needing improvement immediately.
Gary Sargent, vice president of the 82nd Avenue of Roses Business Association, argued small businesses along 82nd Avenue would be taxed unfairly under this proposal, and that they are not going to derive any benefit from this tax.
Sargent said the water bill for his motor sports business on Southeast Foster Road and 102nd Avenue was $679 a quarter. That fee includes water, sewer and storm water, even though the storm water system is off site.
“Yet I pay that kind of water bill,” Sargent said. “That is obscene. I'm subsidizing residents' water bills. That's why mine are so high. I don't use any more water than a house with three bedrooms. Putting this (street maintenance) tax on the water bill is unfair. Putting it onto property taxes or a percentage of property taxes is a more equalized way of paying for this. These are services the citizens of Portland are expecting when they pay their property taxes.”
Sargent also complained that he sees city work projects on the road, in which “five guys are standing around and one guy has a shovel. If I was running this bureau, it would be on a budget.”
Novick replied the survey asked people if they preferred a property tax or income tax and the majority did not, preferring the tax on businesses instead.
“The gas tax is the means we have for funding transportation,” Novick said. “The city gets a small amount of the federal tax. Cities around the country are being faced with the gas tax as a problematic source of taxation. And people are driving less and getting more fuel efficient cars.”
After the meeting, Sargent told the Memo that he wanted the street maintenance tax to be added to residents' property tax bill, which traditionally pays for police, fire and street maintenance, which are all city services.
“To sit and be lectured by Mr. Novick that life isn't fair I thought was a poor example of a politician,” Sargent said. “To be a politician is to serve the people equally and treat everyone equally.”
Sargent said he would run the city bureau like a business.
“The City allots the maintenance bureau x number of dollars,” Sargent said. “The goal was 100 miles of improvements a year. How can I make that happen with the budget I'm dealt?”
He added that by using his business model analogy, he would use salaried managers to take up the slack if his business was running short of funds, instead of running regular employees into overtime.
“I would tell my salaried employees they're going to have to pick up the slack to achieve those goals,” he said. “You don't just start raising taxes.”
Sargent also objects to the City Council voting on the street maintenance tax without sending it to the voters.
“The City Council can wave their wands and start taxing businesses without proper representation,” he said. “That's taxation without representation. Just because the Mayor doesn't want to defend the City Council's position in a vote or a measure, that has no merit whatsoever. They're going to find themselves in a major class action lawsuit against them if they try to tax businesses that don't receive services.”
For more information, see www.portlandoregon.gov/transportation.
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