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Public hearing set for Jan. 8, final City Council vote scheduled for Jan. 14



Commissioner Steve Novick has revised the proposed street fee one more time in a last-ditch effort to win City Council approval and avoid a ballot measure fight.

But Novick warns that if it fails at the council or ballot box, he will campaign for a progressive income tax to fund street maintenance and safety projects in 2016.

The revised proposal drops the progressive personal income tax that had been the residential portion of the fee. It is replaced with what Novick is calling a "user fee" that will vary by income, based on national statistics showing that gasoline consumption increases as income goes up.

“Gasoline use is one proxy for ‘road use,’ and gasoline use varies somewhat by income level,” Novick said when he announced the change Monday morning.

Novick said the City Council will hold a public hearing on the revised proposal on Jan. 8, with the final vote scheduled for Jan. 14.

Under the revised proposal, tax filers in the lowest fifth of income distribution would pay $3 a month; filers in the second fifth would pay $5 a month; filers in the middle fifth would pay $7.45 a month; filers in the second-highest fifth would pay $9 a month; and filers in the top fifth would pay $12 a month.

Although similar to a progressive personal income tax, the revised proposal varies in two significant ways from the most recent residential proposal. First, everyone who files taxes will pay something, compared to the approximately 40 percent of Portlanders who would have been exempt. And second, the top rate is only $12 a month compared to $75 a month.

“My personal preference is for a progressive income tax, which is also the most popular option among Portlanders generally. But pursuing that option would involve a campaign that would not end until at least May, and possibly November of 2016 — which means postponing actual work to repair streets and make them safer. As the mayor and I have repeatedly said, the longer we wait, the worse the problem gets. It seems possible that we could pass a user fee in council that would not require a campaign, which would mean that we could get to work much sooner,” Novick said.

The nonresidential portion of the fee is unchanged. It is a sliding scale for businesses, governments and nonprofit organizations based in part on gross revenues and number of employees. Each portion is intended to raise $23 million a year, for a total of $46 million a year. It would be collected by the city Revenue Bureau, which would incur initial start up and ongoing administrative costs.

It was not immediately clear whether the revised proposal will prevent the fee from being referred to the ballot. A number of individuals and groups have said they would try to refer a previous version to the ballot. They include the Portland Business Alliance, which opposed the progressive income tax. Sandra McDonough, the President and CEO of the PBA, was on vacation when Novick made his Monday announcement.

In addition, some neighborhood association members are questioning the nonresidential portion of the fee. Southeast Uplift, the coalition office representing dozens of Southeast Portland neighborhoods, filed a public records lawsuit to obtain worksheets used by the Portland Bureau of Transportation to determine the amount each business, government and nonprofit organization will pay. Robert McCullough, an economic consultant who is president of SEUL and chair of the Eastmoreland Neighborhood Association, says the worksheets are riddled with errors that undermine the accuracy and fairness of the assessments. Among other things, McCullough says that major transportation companies will not pay their fare share, despite doing a disproportionate amount of damage to the roads.

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