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A hearing will be held in Multnomah County Circuit Court to determine if the elected regional government is exceeding its tax authority.

PMG FILE PHOTO - The logo for the elected regional government.Even as Metro approves plans for how to spend a new $250 million-per-year income tax for supportive housing and homeless services, a coalition of businesses is challenging the regional agency's proposed rules for collecting the funds.

Multnomah Circuit Court Judge Stephen Bushong agreed Monday, March 15, to schedule a hearing on the legality of the proposed rules. No judge has been assigned to the case and the hearing has not yet been scheduled.

At issue is whether the rules adopted by Metro can be different than the taxing authority granted to Metro by state law. In court filings, Metro admits its rules are different than those set forth by the state, but says they are legal because the agency operates under a "home rule" charter approved by its voters in 1992. Metro voluntarily asked the court to approve its rules through a "validation" action filed on Dec. 30.

"We are quite confident of our legal position," Metro Councilor Bob Stacey said at the time.

The businesses, including the Portland Business Alliance, disagree. They accuse Metro of trying to expand its taxing authority beyond what is allowed by state law.

"Untethering Metro by granting it home rule goes beyond the most basic intent of the establishment of Metro, leaving the Metro Council free to choose to increase or change its present taxing authority at any time. This is 'mission creep' and the courts should reject it," said PBA President and CEO Andrew Hoan.

Hoan also said the different rules create an unnecessary burden for businesses who will be required to prepare different sets of tax returns.

"Instead of following state law and doing the work to make these new taxes function for local employers, Metro has asked the courts to validate their position of being a home rule government. They are arguing that they are not required to conform with Oregon state law which currently limits Metro's taxing authority,"

The measure was approved at the May 2020 election by a majority of voters in all three counties within Metro's jurisdiction. It will collect a 1% income income tax from people who make $125,000 annually or couples who earn $200,000 combined. It also includes a 1% tax on businesses that generate $5 million annually.

The funds will be distributed to Multnomah, Washington and Clackamas counties to support services to help prevent people at risk of losing their housing in their homes, and to keep the chronically homeless in their subsidized housing. The counties must submit plans for spending their share of the funds to Metro for approval.

The measure took effect on Jan. 1. Metro is contracting with the city of Portland to collect the taxes.

A previous Portland Tribune story on the issue can be found here.


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