Less than three months after launching a bid to raise more revenue for transportation, Councilor Olivia Clark has heard enough: At a meeting of the Portland City Council Transportation and Infrastructure Committee this morning, Clark said she was so “moved” by the level of support for two new fees that she was ready to put forth a proposal.
“I did not start out at this point, but given all the community feedback,” Clark said, “I’m going to take a risk here, and I’m going to open up with a funding proposal for you to discuss.”
Clark’s confidence came from a presentation by Portland Bureau of Transportation staff that summarized public feedback from four recent open houses and an online survey. Over the past several weeks, PBOT hosted open houses in each district. 254 people attended the in-person events and another 477 completed the online survey. While obviously not a scientific sampling of opinion, Councilor Clark feels like it’s time to move forward.
Clark plans to draft legislation that would authorize the City of Portland to pursue a Transportation Utility Fee (TUF) at around $12 per household (or $9.50 per multifamily unit) and a Street Damage Restoration Fee (SDRF) at $10.30 per square foot. The TUF is something 31 other Oregon cities have already implemented. It would be charged on utility bills and would elevate well-maintained streets to the same level as other basic city services like sewer, power, and water. The SDRF would be charged to utility companies and other contractors who dig up streets. The fee would compensate PBOT for damage done to the right-of-way.
Despite the conventional wisdom that voters are reflexively against any new taxes or fees, PBOT’s recent outreach showed that 78% of those who offered feedback support the TUF and 87% support the SDRF. Of those who support the TUF, 48% said it should be the same as the regional average, or about $12. This is significant, because folks were given options to support $6 or $9 per household — yet they still chose $12. (Note: The TUF is technically a fee, not a tax, so it doesn’t need a public vote.)
PBOT says they must fill a $25 million budget in the short-term, but the overall cost to address their maintenance backlog is $6 billion.
Taken together, the TUF and SDRF would raise about $68 million per year and would give PBOT a flexible pot of funds they’d have discretion over. This is a key point given that the vast majority of PBOT’s funding is from sources that are dedicated to specific projects and programs. Add in the $18 million (or so) per year PBOT brings in from the Fixing Our Streets (10 cent local gas tax) program and the bureau would have enough to fill their budget gap and make headway on that maintenance backlog.
There are still a lot of details to hammer out. Clark said she’d likely include language in the ordinance that would mandate a certain amount of funds raised from the TUF be spent on maintenance. But Clark wouldn’t stipulate an end to PBOT’s existing local gas tax, which is an idea floated by Mayor Keith Wilson at the open houses. Councilors Clark, Smith and Angelita Morillo said that gas tax conversation should not be mixed with conversations about new alternatives.
“This is an important moment in Portland history.”
– Olivia Clark, city councilor
At council Monday morning, Clark’s proposal was met with strong approval from the other four members of the committee. Councilor Loretta Smith voiced her support, seeing it as a way to fund her Sidewalk Improvement and Paving Program.
Councilor Mitch Green also said he’s ready to support the proposal. He also said the future of Portland local gas tax could be a moot point if city planners use new revenue to, “Shape the transportation system that gives people options to not drive their car.” Green said the U.S. war in the Middle East could soon lead to lines as gas stations and provide a strong impetus for people to drive less and/or seen other options. “We have an opportunity here,” Green said, “To use that geopolitical crisis as an opportunity for us to lead a city forward that’s not exposed to that kind of energy shock.”
Two other alternative funding sources — a retail delivery fee and a third-party food delivery fee — were considered not quite ready for prime-time and won’t move forward in this proposal.
As leader of this effort, Councilor Clark wants to move forward at relatively breakneck speed. She hopes to have legislation drafted and delivered to the full City Council by next week and continue the conversation at the (newly assembled) Committee of the Whole on April 2nd (which will be the first opportunity for public testimony). If all goes according to plan, the proposal will be in front of full City Council on April 8th, before the city budget process officially begins.
“Let’s move on,” Clark said at the end of this morning’s conversation. “This is an important moment in Portland history.”
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LOL . . . right
If, a big IF, this passes the voters, I’m taking bets on how many years it’ll take for the City Council to rob these fees and use them for something else.
I give it 3 years.
It doesn’t have to pass voters. The TUF is a fee, not a tax. And the SDRF isn’t even paid by voters. And the Fixing Our Streets program has been in place since 2016 and has a very stellar record of accountability and transparency and has never been raided for other uses.
How is calling the TUF a fee instead of a tax anything but semantics? And ignoring that issue, is this an Arts Tax 2.0 where a government agency with no experience in mass taxation is charged with doing that work?
AY,
Yes some of it is just semantics and politics. But there are also different laws and procedures that depend on something is a tax or a fee. I’m not the expert in this area, but a fee is generally more appropriate when the thing is a service you are paying for. In this case, the city provides maintained streets as a service and this would be a fee we’d all pay for that service.
Fixing Our Streets gas taxes are regulated by state law in Oregon, so even when City Council tries to use them “in an emergency” for other purposes, they can’t. Fees on the other hand…
Jonathan, perhaps you should consider a boilerplate at the top of the Comments section: “Please Read Article Prior to Commenting”
It’s the will of the voters that the City Councilors have their jobs. If enough come out against it and let their City Councilors know, it won’t pass.
Or another scenario is someone does a ballot measure that repeals it.
The voters still very much can wield power even outside of the ballot box.
WT*?
Is it possible the you are not aware of two scathing audits from the City Auditor’s office that pilloried PBOT for refusing to account for the portion of fixing our street budget legally obligated to be spent on “safety” (e.g. bike/ped infrastructure). And, of course, PBOT’s response was to essentially thumb their noses at the idea that they should accountably allocate funds to voter-designated categories.
https://www.oregonlive.com/commuting/2021/09/portland-auditor-says-transportation-bureau-failed-to-closely-track-gas-tax-spending.html
https://www.opb.org/news/article/portland-road-repair-safety-program-fixing-our-streets-gas-tax-audit/
Yeah those are really scathing at all. And one of those was done just 3 years after it passed. And don’t get me started about how the Auditor is an elected official and that office has always had political motivations to say the least. But even if you discount all of that, you’re talking about a critique that PBOT didn’t quite categorize spending properly. That is really not a huge deal IMO. Also, for some reason voters went ahead and voted to support that tax overwhelmingly despite that audit.. so yeah not really scathing.
Yeah those are not really scathing at all. And one of those was done just 3 years after it passed. And don’t get me started about how the Auditor is an elected official and that office has always had political motivations to say the least. But even if you discount all of that, you’re talking about a critique that PBOT didn’t quite categorize spending properly. That is really not a huge deal IMO. Also, for some reason voters went ahead and voted to support that tax overwhelmingly despite that audit.. so yeah not really scathing if you ask me.
It will follow the same fate as the ULF, which both closely resemble, and even before the ink is dry PBOT will get 25% in the first year, 12% in the second year, and less than 3% every year after that. The rest will go into the city’s general fund to pay for fire, police, housing, pet projects, etc.
Heaven forbid we actually have focused taxes on private car usage
I don’t love that it’s not income adjusted or scaled based on actual impacts to roads. I’d rather see something like a street parking fee assessed to every vehicle stored in public rights of way, with higher fees assessed to heavier vehicles or an income adjusted tax.
Yeah at this point I think folks on council understand that we can either debate a perfect implementation and mechanism and try to do something that does more to change behaviors and punishes people for making choices that are overall a negative to our system — or we can just find something that is good and works and get it passed and start fixing streets and move on. I am personally here for the latter!
Agreed Gron although the original PBOT presentation on TUFs did have this footnote on page 28:
yeah there will most likely/definitely be some sort of low-income considerations. This is Portland City Council after all.
POEM
https://www.portland.gov/transportation/planning/pricing-options-equitable-mobility-poem
The average is based on number of cities and not tied to density or population? even VMT? I guess I’m a little confused why it would just be based on number of cities and not to something more directly related to the infrastructure that the fee is meant to support
This just proves once again that those who cannot remember the past are doomed to repeat it.
From the 2014 article:
“In 26 years, the city has allocated 28 percent of utility license fees to transportation just once — in 1988. The actual amount diverted for transportation dropped from more than $5 million to nothing in 1994 — where it stayed until the 2010 fiscal year.”
https://www.oregonlive.com/portland/2014/08/portland_street_fee_city_counc_2.html
Fingers crossed the council can make the funds raised locked into PBOT better than the original TUF and better than how he PCEF fund turned out. Go Blazers?
I don’t think anyone is really against the $12 fee, I think people are against the frustration of paying into what according to historical trends will become a slush fund and we have to redo the drama dreaming up more fees in a few years.
Again,
Utility fees are based, at least partly, on utility usage. If I use more water, I pay a higher fee. Built into utility fees is a financial incentive to be conservative in using the utility. If ANY utility should operate under this kind of incentive, it’s roads and driving. And implementing a flat household road fee takes the pressure off on coming up with a more equitable fee based on mileage driven and vehicle weight.
I (still) can’t support this proposal.
And, once the fee is implemented, you can bet that if the gas tax morphs into a more progressive mileage/weight tax, this fee won’t go away, and will only stay at $12 until council decides it needs to be higher.
I hear you Michael. But the option is to never pass any type of transportation-based utility fee because we get bogged down by the impossible task of making it fair for everyone based on their usage. That type of fee schedule sounds like a nightmare politically and if I recall, that was one of the problems with former Mayor Adams’ “street fee” was that he tried to do that but lost the public in how complicated the calculations were. I’d rather pass a flat fee (because again, we need to do something now!) and then come back later and talk about maybe credits or discounts based on certain behaviors (like maybe number of cars registered to household or something like that).
It’s not an “impossible task.” It’s a hard task. Hard things are worth doing.
And if you had to place a bet, what do you think the odds are that we’ll “come back later and talk about” it? The utility fees will literally take the pressure off, and we’ll move on to the next crisis. As much as it sucks, our deteriorating roads ARE the incentive to get it right.
Good to know that when I am on my bicycle getting passed by a Rivian that we are paying the same fee to use the same roads.
Nice to know the socialist is behind this very fair new tax.
So would the Street Damage Restoration Fee be paid by utility companies or other contractors that rip up the roads?
Yes.
And PBOT is considering various levels of cost recovery – meaning the balance between the cost of the damage vs what PBOT charges to repair it. PBOT queried the public about a 75% cost recovery model… but Councilor Green pushed PBOT to consider a 100% cost recovery model.
Jonathan: an interesting point crossed my mind upon seeing the photo selected with this article…the broken up concrete street may be as old as 1900 to 1920s (and not the utility cuts). The selection of materials (and preservation) can have a great impact on its lifespan. If that street had been built with asphalt then it may have needed reconstruction after 20 to 30 years and not 100.