EDITORIAL: Put brakes on Portland Clean Energy Fund
The city of Portland's Clean Energy Fund is collecting taxes far faster than expected. It doesn't have systems in place to spend those dollars responsibly. The director of the bureau managing the program has abruptly departed with a large severance check in hand. And some of the money already spent by the fund is under question.
Yet, advocates for the program are signaling full steam ahead — let's keep the dollars coming. Meanwhile, anyone who suggests taking a pause — as the Portland Business Alliance has done — is labeled as hostile to the program and its laudable goals.
So, let's clear up a few facts right away. For one, if you truly support the idea behind the Clean Energy Fund, then you should be the first to insist that it be held accountable for the money it is collecting. The city's own auditor has concluded, in a report released March 10, that those accountability measures are not yet in place.
In addition, it's now crystal clear that supporters' projections for how much the tax would raise from large retail businesses were grossly inaccurate. Ahead of the 2018 election for the voter-approved measure, the tax was predicted to bring in $30 million per year, although official estimates from the city placed it at $44 million to $61 million per fiscal year. Instead, it has generated $185 million in the past two fiscal years. The money comes from the pockets of people who shop in Portland. Yes, the tax is levied mostly against large retailers — think Fred Meyer, Costco and Walmart, among others — but those companies undoubtedly pass along the 1% surcharge to their customers.
In effect, it's a local sales tax.
The basic motivation for the Clean Energy Fund is a worthy one. The monies are deployed to nonprofit organizations that can help Portland — and specifically low-income residents and communities of color — deal with climate change. One concrete example is home energy upgrades, which can reduce carbon emissions and also save households on their monthly bills. Other programs would include job training for clean-energy industries, and funding for regenerative agriculture, which can capture carbon and support local food production.
It was always questionable, however, whether Portland's nonprofit sector had the capacity to absorb such a large influx of money and put those taxpayer dollars to their highest and best use. Now, with the proceeds greatly exceeding supporters' expectations, it's safe to say the money likely can't be spent wisely until more structure and oversight is in place.
That's not a speculative opinion on our part. The auditor's report states that "the program had not adopted a methodology to measure, track and report performance — as required by the legislation," but had laid the groundwork for such accountability.
Further, the audit found shortcomings in how the program measures administrative costs, how well it has met its equity goals, and how the city has, or hasn't, provided oversight.
The auditor's findings and recommendations are cause for concern, but that's just the start. The program recently yanked a $11.5 million grant from one organization whose leader, according to the Oregonian, had a history of defrauding energy companies. That defunding decision is now the topic of a federal lawsuit. Meanwhile, the Clean Energy Fund's director, Andrea Durbin, suddenly resigned and negotiated a final-pay package of nearly $200,000.
By virtue of her bureau assignments, Portland City Commissioner Carmen Rubio oversees the Clean Energy Fund. She initially said she supported spending all those additional millions in revenue. She hasn't backed away from that stance, but in an interview with the Portland Tribune, she promised to develop recommendations to the City Council to solve the problems identified in the audit and allow the program to more clearly meet its goals.
That's a start, but Rubio needs to go further. The size of the tax ought to be reevaluated and aligned with the capacity of nonprofit organizations to do the intended work. Or the vast sums of money being collected should be considered — with appropriate city charter changes, and after passing legal muster — for other purposes, such as climate-related transportation projects.
At the very least, a much more robust system of oversight must be in place, and urgently.
A citizen committee has worked hard to guide the Clean Energy Fund, but committees are not ultimately answerable to the public for how the city spends its money. That job falls to the City Council, which needs to acknowledge an experiment that's off the rails and become directly involved in protecting taxpayers' money.
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