OPINION M26-218: Metro needs transportation plan, not blank check
Our chambers of commerce represent more than 1,650 businesses and nonprofits employing over 117,000 people across the Portland metropolitan area. For years we have lobbied for transportation improvements to move people and goods quickly and safely through the region. We need to reduce congestion and improve safety and we want to help make that happen.
Unfortunately, Metro has come up with the wrong package at the wrong time and with the worst possible way to pay for it.
Metro has failed to tell the whole story about how wide and how deep its tax will reach into workers' paychecks. The regional government would have you believe that this tax is just on wages and on a limited number of businesses. Metro Council wrote the measure to give itself maximum flexibility with no restriction or limits on the tax rate, with the least amount of accountability, forever. Essentially, Metro is giving itself a blank check that comes out of your wallet.
Metro is pitching Measure 26-218 as a business tax. It's not. Nor is it a tax on profits. It's a tax on any operation with more than 25 employees and, because it taxes employment and not profits, it's applied even when employers are operating at a loss. In addition to businesses, more than 70,000 workers at churches, charities and other nonprofits will be taxed. And even though Metro exempted its own employees in recognition of the financial burden this tax would place on its own budget, Metro did not extend a similar exemption to small business who have been negatively impacted by the COVID-19 pandemic, or even to lower wage worker, including those making minimum wage.
But it's worse than that.
We were shocked when Moss Adams, a highly respected local accounting firm issued an alert about Metro's measure. The independent report released last month reveals, in addition to wages, the measure will tax workers' benefits such as health insurance, contributions to retirement, bus pass allowances, and stock options. This isn't wild speculation, as Metro staff have agreed the accountants' conclusions are correct.
But there's more.
Even if you don't live or work in Metro's jurisdiction, Measure 26-218 is going to go after your wages. The careful analysis by Moss Adams found that the measure will tax employers and non-profits located outside Metro boundaries but who have workers who perform services inside Metro boundaries. Simply delivering a package in the Metro area can trigger the tax on an employee's total compensation for the entire year.
The complexities of this permanent tax are unsustainable for our local businesses. This measure will cripple Main Street, eliminate living wage jobs, and destroy family businesses. Metro's attempt to impose a staggering new tax in the middle of this once-in-a-lifetime recession demonstrates a callous disregard for the communities they say they serve. Metro's claims that the measure will create more regional jobs that Nike and Intel combined has been thoroughly debunked, including by the economist Metro itself hired.
Metro has written the measure so that the tax can be raised annually and the number of employee threshold can be lowered, all without a vote of the people. Governments never lower a tax, so the likelihood of the tax going up is high plus there are no limits to lowering the employee threshold. A business with 10 employees might be next. Metro wants voters to trust them, but, based on Metro's poor performance implementing previous revenue measures, Metro's own auditor has questioned whether voters should trust its promises or its ability to carry them out.
It is very clear that Measure 26-218 is about creating a permanent revenue stream. Metro's Zoo, Convention Center, and Expo Center have been hit hard by the pandemic and are struggling to stay afloat. It's only a matter of time before the regional government taps the payroll tax to fill its growing budget gap.
We've been at the table to bring transportation improvements to the region and we plan to come back to the table in the future. Measure 26-218 is the wrong tax at the wrong time. Please, join us in voting 'no.' More importantly, please join us in working together on a package that works for everyone in the region.
Deanna Palm is president of the Hillsboro Chamber of Commerce, Stephen Smelley is the Chair of the Beaverton Area Chamber of Commerce, and Lynn Snodgrass is the CEO of the Gresham Area Chamber of Commerce.
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