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The economic effects of COVID-19 should prompt Metro to take business tax increase off the ballot

Has the Metro Council not noticed the stock market absolutely cratering in the past two weeks? Surely the councilors might have heard that McMenamins hotels and pubs, Powell's Books and all restaurants and bars have shut their doors and laid off thousands upon thousands of employees?

Have they paid attention to the cancelation of all events in Oregon, which in turn has brought the economy to a near standstill?

If they have noticed these things — and they are normally smart people, so we know they have — then why would they persist in placing a $250 million tax increase, primarily aimed at businesses and the people who run them, on the May ballot?

As reported by the Portland Tribune's Jim Redden, a group of five chambers of commerce from Multnomah, Washington and Clackamas counties approached the Metro council this week to request that Metro postpone the ballot measure in light of the extraordinary economic dislocations occurring in Oregon due to COVID-19. The Metro council responded by saying it planned to press ahead with its measure to raise money for homeless services, explaining that the tax would be paid from business profits and by high-income individuals. Metro councilors say the businesses can still afford it and individuals who make more than $125,000 a year ($200,000 for a couple), ought to pay more.

Further, the council argues that the money is needed even more now, as it can help homeless people during this pandemic.

However, the taxes in question, if approved on the May ballot, would not even be collected until 2021. So, in fact, this measure would do nothing to address the immediate 2020 crisis, which does indeed demand — and is prompting — emergency attention to the homeless. Even after taxes start to roll in, they have to be passed through to the three county governments within Metro's boundaries and then distributed to nonprofit groups that actually would provide the services. Many, many months will pass before any new or expanded services are put into place.

It's also safe to say Metro's calculations of how much the tax will raise are now utterly in doubt. The businesses Metro planned to tax may not have any profits a year from now. Some of them may no longer exist. Many of the individuals and households making those attractive salaries will have seen their incomes cut, their retirement accounts devastated and their investment income slashed. And again, they may not even have jobs.

Metro had the support of one local business group — the Portland Business Alliance. But that support was negotiated before the severity of the current emergency was clear. The PBA ought to reconsider, and Metro should take this tax increase off the ballot. If the economy bounces back quickly, there are plenty of opportunities, using Oregon's superior vote-by-mail system, to go back to the ballot.

Plus, a delay would give Metro and the well-intentioned supporters of this measure time to explore all alternatives for increasing support for the homeless. This measure was developed and negotiated in such a hurry that it is bound to produce unintended consequences.

Metro is just one of the local governments planning to take tax measures to the ballot in 2020, totaling more than a staggering $6.5 billion. All of them need to come to grips with the fact that the economy has flipped. Raising taxes by that amount in the face of a global recession is poor public policy. The virus and recession will eventually fade, but no local agency should move forward with new taxes until that day is much more firmly in sight.


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