A hearing on the complex issue was held in Multnomah County Circuit Court on Friday, May 21

PMG FILE PHOTO - The logo of the elected regional government.A Multnomah County Circuit Court judge is considering the legality of the rules adopted by Metro to collect its new income tax for homeless services.

Judge Steffan Alexander held a remote hearing on Metro's request to validate its collection rules Friday, May 21. The legality of the rules has been challenged by a coalition of businesses and business organizations because they are different than those approved by Oregon to collect state income taxes.

The elected regional government agrees its rules are different than those of the state. But attorneys representing Metro argued their rules are legal because they were adopted under the regional government's home rule charter, which was approved by voters in 1992.

Attorneys representing the business interests argued that even though Metro has its own charter, Oregon law requires the rules to be the same as those approved by the state.

Both sides cited different Oregon court cases to support their positions.

Alexander did not rule at the end of the hearing but said he would take the matter under advisement. He did not say when he would issue a ruling.

The ruling will not affect Metro's ability to collect the taxes but could change the amount collected every year.

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% marginal income tax from people who make $125,000 annually or couples who earn $200,000 combined. It also includes a 1% marginal income tax on businesses that generate $5 million annually.

The measure was estimated to eventually raise $250 million a year for 10 years at the time of the election.

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

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

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