1221 SW 4th Ave. Suite 210, Portland, OR 97204
We're going to step back and take some more time to think about the residential fee, as we are doing with the nonresidential fee. A primary focus is going to be on how to ensure that we alleviate the impact on low income Portlanders. Commissioners Fritz and Fish were both very focused on that, and they are right to want to be sure that we do all we can.
I don't regret having set the deadline of a June 4 vote, even though we're letting the deadline slip. Sometimes having a deadline forces you to focus. This deadline has focused the public, and it has focused us. When we held town halls on the funding mechanism, we got lower turnout than we did for the town halls on the city's transportation needs. But setting the date for a vote promoted a huge reaction, particularly from small business owners and advocates for low income people.
With regard to the impact on low income households, I am hopeful that we will be able to come up with a strategy that addresses not only the impact of this fee but the impact of water and sewer fees. During our planning, we recognized that it would be administratively difficult to extend low income discounts to all people in multifamily housing, although it's important to note that the multifamily rate is lower than the single family rate to begin with. But we didn't see a way around this barrier; after all, the water and sewer bureaus have never been able to extend low income discounts to those living in multifamily housing, either.
And, interestingly, advocates haven’t seemed particularly focused on low income discounts for water and utility rates; I've been through two years of utility rate adjustments now, and I don't recall any testimony about the inaccessibility of low income discounts for people in multifamily housing. Two weeks ago, we had a discussion in council about the fact that fewer than 10,000 people access the low income discount for water and sewer, but it's not something people have been banging on our doors about.
But faced with a NEW fee, the advocates came out and made a forceful case Thursday night, which Commissioners Fish and Fritz in particular followed up over the next few days. I was, as has been obvious, a bit cranky with my friend Commissioner Fish for focusing on an issue with the proposed new fee that seems to have been a forgotten issue with the old water and sewer fees. And I do think it's an example of how people will tolerate problems with something that's "always been there" more than they will tolerate the same problems in something new.
But crankiness doesn't solve problems. It makes sense to delay a vote while we search for a way to make low income discounts fully accessible to people in multifamily housing. The difference between the proposed fully-phased in 'regular' multifamily fee of $7.05 per month and the proposed discounted fee of $4.93 per month is only $2.12 per month, but every dollar matters for someone living paycheck to paycheck.
And, although I'm not sure yet if it will work, I came up with an idea late Sunday night that I'm rather excited about. The City’s existing process with the arts tax allows people who are living below the poverty line send in some paperwork and get an exemption. Maybe we could use that process to provide rebates on water, sewer and transportation fees. You would send in your arts tax exemption form and get a check equal to the annual total of the utility fee discounts you're entitled to. I've asked Thomas Lannom in Revenue to think about whether we can make this idea work.
When we appoint work groups to look further at both the residential side and the business side, I'm going to encourage them to think as broadly as they want to. We've been focused on a user fee, which is what other cities have done and is consistent with the way we fund utilities generally. Based on perceived political and practical obstacles, we stopped thinking about options like a sales tax, or a local income tax, or an increase in the business profits tax.
But maybe now that we have a lot of people more engaged, they'll want to take another look at some of those options. And that's okay - as long as they do it quickly, because we have a November 14 vote deadline to meet.
A lot of small business people didn't like the idea of a user fee because it doesn't take profitability into account; maybe they'll want to raise the idea of increasing our existing business profits tax instead. That would have the advantage of administrative simplicity because the mechanism is already there.
We wrote off the sales tax because it lacks public political support, but I was looking at some numbers the other day, and it appears that many people would pay less under a 0.5% sales tax than under our residential street fee proposal, even though a 0.5% sales tax would raise as much money as the nonresidential and residential fees combined. That's because, even though a sales tax is regressive compared to the income tax, rich people still buy a lot more than lower and middle income people. It also occurs to me that we could possibly use the arts tax exemption process to develop a low-income sales tax rebate, which would alleviate regressivity.
Now, the polling on a sales tax is not encouraging, and I'm sure some powerful groups are dead set against it, but if the work groups are interested and think an army can be raised to promote the idea ...
A local income tax is, of course, the most progressive idea, and it's something the people of Portland have actually supported before - the I-Tax. For some reason it did not do well in our poll. But again, if the work groups conclude that progressivity is the highest value, maybe there's a strategy for that.
By the way - there's a point I've been meaning to make that I might as well make now. I am committed, and I think the same goes for the Mayor, to keep working on this issue until we get a solution. If we adopt a proposal, and it gets referred to the voters, and defeated, neither the Mayor nor I is going to give up for another six years. We'll come right back with another proposal. We don't have an economic future if we allow our roads to crumble. We have a moral obligation to ensure that children can walk to school on sidewalks, not in ditches. Transportation funding is not something that would be nice to have. It is essential.