With a budget teetering on the ledge of a cliff unlike any in their history and recent decisions that have whipped Portlanders of all persuasions into a frenzy of distrust, the Portland Bureau of Transportation is about to embark on a delicate conversation about renewal of a local gas tax that’s key to their financial health.
First passed by voters in 2016, the Fixing Our Streets 10-cent tax on gas purchases has become one of PBOT’s most important and reliable sources of revenue. When it was new, it passed with just 52% support. But after four years of delivering projects, it was renewed in 2020 with a whopping 77% approval.
With another renewal coming up in May 2024, PBOT is ramping up for what is likely to be a more challenging political environment than what they enjoyed four years ago. And the stakes could not be higher this time around as PBOT expects the tax to raise $75 million.
PBOT currently faces a $32 million budget shortfall and faces a 30-35% cut in their discretionary budget (what their top budget planner referred to as “our keeping the lights on” budget) in their 2024-2025 budget cycle. After years of cutting the bone, if PBOT doesn’t get a lifeline from City Hall this time around, they will make massive cuts to staff and programs the likes of which we have never seen.
If they don’t renew Fixing Our Streets for a third time, that $32 million annual shortfall balloons to a $52 million shortfall. PBOT Director of Policy, Planning, and Projects Art Pearce said at a joint meeting of the bicycle and pedestrian advisory committees Wednesday night that if the renewal fails it “Would be an additional problem we’re not actually accounting for… so we’re proceeding with a level of optimism that that is renewed again.”
Full details of Fixing Our Streets 3 (FOS3) aren’t finalized yet, but PBOT gave a preview of what to expect at a meeting of the program’s oversight committee Tuesday night where they released results of a poll of likely voters taken earlier this month.
The main takeaway is that PBOT is likely to pass the tax, but only if they put a very similar measure on the ballot as the one voters passed in 2020. In their poll, PBOT also asked people for feedback on extending the tax beyond four years and whether or not they’d support a 15-cent tax or indexing it to inflation.
The poll queried 600 likely voters and according to what PBOT released last night, 71% of them said Portland is “on the wrong track.” “Positivity is still stubbornly low,” states a PBOT slide from the meeting. As for transportation issues specifically, they found most Portlanders are more interested in other issues like homelessness, public safety, drugs, housing, and so on. The poll found that when asked what’s on their mind, only 2% of voters mentioned roads, transportation, or traffic congestion.
The good news for PBOT is that nearly 60% of likely voters say they’d support a 10-cent renewal of the gas tax that lasts four years. Poll numbers thus far are similar to what PBOT found in 2019 prior to garnering 77%, so it’s likely FOS3 will pass. “Nearly 6 in 10 Portland continue to support investing in streets and safety through renewal of the gas tax, despite being otherwise very unhappy with the direction of the city and prioritizing competing issues,” PBOT says.
PBOT also asked if people would support a 10-cent tax that would last eight years (instead of four). 52% of respondents said yes.
Other iterations of the tax PBOT is considering failed to receive majority support:
renewal at 10 cents for four years followed by an increase to 15 cents for the next four years (46%),
an increase to 15 cents for four years (37%),
and making the 10 cent tax permanent but indexed to inflation (37%).
“All of these also have high levels of ‘strong’ opposition,” PBOT found.
As for how to spend the $75 million, PBOT says they’d continue the same “balanced approach to basic maintenance, safety, and street services.” The funds would be split into three $25 million buckets: “smoother streets and paving,” “community transportation street services,” and “safer streets projects.”
Notable changes in FOS3 under consideration include switching $20 million in paving they would typically contract out to internal PBOT crews, who would focus on more preventative pavement maintenance instead of complete road rebuilds (this would also preserve jobs as layoffs loom). PBOT also wants to use half of the $25 million allocated to safety projects to matching dollars for grants and “strategic investments.”
The details of FOS3 could still change. PBOT will present the polling results and their proposals to the bureau’s Budget Advisory Committee at their meeting tomorrow night.