- illustration by shawn dicriscio
Commissioner Steve Novick announced this morning he supports Mayor Charlie Hales’ plan to split up their proposed “transportation user fee”—moving forward on an $11.56 monthly fee for most homeowners, but pulling back on a fee for businesses—but with a pledge to scrap the whole idea if both pieces aren’t in place by November 14.
The slowdown follows a swift and apoplectic backlash among business owners in the week since the road maintenance and safety fee was formally announced last Thursday. Opposition from big business lobbyists, like the Portland Business Alliance, was expected. But far more surprising was fury from small businesses and nonprofits, some of whom faced the possibility of paying thousands of dollars a year. In all, the fee could raise up to $50 million a year.
Beyond the obvious sticker shock, many complained the city’s fee calculators for helping businesses estimate monthly payment, based on how many trips generated, were imprecise and opaque—and even altogether flawed. That sustained outcry, coming in wave after wave of calls and emails, resonated with the mayor and Novick, forcing their hand just hours before a public hearing on the proposal at 2 this afternoon.
The proposed pullback was first reported last night by Willamette Week. Looming over all of this is the serious fear opponents of the fee will be seriously motivated try to refer it to the ballot. Mollifying the business community and prolonging the debate seems to be a good way to sap some of that energy.
“This does not mean that we are planning to have a fee for residents but no fee for businesses,” Novick says in his announcement today. “In fact, we are putting language in the residential fee ordinance that says that if the council does not pass a nonresidential fee by this November, the residential fee will be cancelled. Both residential and nonresidential users would start paying as of July 2015. But we do think there is reason to do more work on the business/nonresidential fee.”
According to the Oregonian this morning, the plan to split the street fee will pass muster with Commissioner Amanda Fritz, the swing vote Novick and Hales need to put their plan in place. Commissioners Dan Saltzman and Nick Fish have already said they’d prefer to immediately go to voters.
Novick’s statement got into the weeds of the debate over the business/nonresidential fee, in an attempt to shed some light on the city’s thinking. He repeated that the city is building from the Institute of Traffic Engineers’ “trip generation” model. And he said the formula used this year resembled the one used by then-Commissioner Sam Adams in 2007. Adams’ street fee plan wasn’t targeted by small businesses—political skullduggery by then-Mayor Tom Potter and opposition from the Oregon Petroleum Association helped doom it instead.
But Novick acknowledged that Portland’s calculations based on those rules are different from those used in other cities, including Oregon City, which already charges homeowners $11.56 a month.
Over the past week, however, reading numerous emails from small business owners, it became clear to me that many business owners were not part of that 2007 process, and have a lot of questions. Some are not sure which of the ITE categories they fit into; some question the fairness of applying the ITE model to their particular business. And it wasn’t just business owners; religious organizations and other property owners have concerns about the application of the ITE model.
We still believe that the ITE manual is an appropriate basis for computing nonresidential fees. But again, other cities have developed variations on how to use the ITE. We think it is appropriate to take a few months to give business owners and other nonresidential parties who may not have been involved in the 2007 process to ask questions about and help shape our particular formulation.
So, the Mayor’s and my plan is to move forward with a vote on a residential fee, and set a deadline of November 14, 2014 for the City Council to pass a nonresidential fee. Both fees would take effect as of July 1, 2015. If Council does not pass a nonresidential fee by November 14, the residential fee would be cancelled.
Stay tuned this afternoon. We’ll have updates from what’s looking to be a packed, raucous hearing—late changes notwithstanding.
The whole tenor of the conversation surrounding this street fee seems to assume that there is a somehow a revenue problem. Is that the case or is PBOT spending in excess of its capability?
Here’s a link to a 2013 PBOT audit. http://www.portlandonline.com/auditor/inde…. A few highlights from the audit:
PBOT plans to spend $115 million of discretionary revenue in FY 2012-13, an increase of $23 million (26 percent) from FY 2008-09. But even with this total spending increase, many maintenance programs have been reduced.
PBOT has identified many trends that may make gas tax and parking fees unstable revenue sources in the long term. * * * However, in its financial forecast, PBOT estimates that both gas taxes and parking revenues will continue to rise through the end of the forecast period in FY 2016-17. PBOT bases the estimate of the City’s gas tax/ State Highway Fund revenues on the Oregon Department of Transportation Gas Tax Forecast, which is conservatively discounted by 7 percent.
The east side streetcar line began operating in September 2012. However, the east side parking district was not approved by Council until June 2012, and will not have surplus revenue in the first year due to implementation costs. Until those parking revenues exceed the costs of parking district implementation and operation, streetcar operations will be subsidized with
other discretionary transportation revenues.
From FY 2012-13 to FY 2016-17, debt service payments are estimated to increase another 80 percent, as payments begin on bonds to fund the Portland Milwaukie Light Rail line and the Sellwood Bridge replacement.
While Council intended that payment of the Portland Milwaukie Light Rail line bonds be funded partially by dedicated System Development Charges (SDCs), according to Office of Management and Finance staff, those revenues are extremely volatile. PBOT financial managers told us they anticipate debt service for the light rail project will be paid out of other discretionary transportation revenues at least through the next five years. PBOT management noted that prior to the downtown transit mall and Portland Milwaukie Light Rail development, PBOT funds had not been used for transit development. Again, funding for this new project will displace existing core transportation services unless and until SDCs increase.
Funny how Oregon City has done this, but Portlanders cry foul.
Basically the PBOT and the City administration has overextended and spent beyond their capability and are now looking to squeeze more money out of the public. The best part of this authoritarian mandate is how Mayor almighty Hales and his minion Novick is bulldozing this regressive tax through without a public vote while still giving public lip service about Democracy and the Democratic process. Sounds a little like the last administration. And guess where all the road repair funds went to during the Adams reign? Obviously not to repair potholes . Homeowners already pay property tax, why should they pay more? What about schools being asked to pay this tax, public schools that are underfunded as it is? Small business owners are penalized as well. Have they thought of the potential negative impact on the community at large? Of Course not. Most people after they pay bills barely have $11.56 left at the end of it. This is taxation without equal and fair presentation by autocratic bureaucrats, whom I did not vote into office . And of course they backtrack when they have backlash from the big business interests. How typical..
Portlanders cry foul due to a pattern of misallocation of public funds, starting with the Adams administration and the vanity projects ie.. the water house,, bioswales/bike parking. The public is suspicious , resentful and wary that the same pattern continues.. For example, the last administration should’ve focused on immediate community needs like safer intersection pedestrian crossings, road repair of POTHOLES, instead of expensive bioswales and bike parking. Appropriate allocation of public funds and prioritization according to community needs, not political kowtowing to special interests ,is what its about. That’s why there’s a public backlash . Most of these elected officials are hold overs from the previous administration that’s now perceived as corrupt. Portland was left with a deficit of 25million. How does that happen and not one pothole repaired. There’s also the element of legislating mandates without a public consensus and referendum. The usual suspects doing it again.
Why is it surprising that small businesses and nonprofits are against this? They oppose it for the same reason that homeowners (probably another evil group, along with big business, in the eyes of Denis Theriault) are against it….it’s regressive, unfair and unnecessary.
Also, the Mercury really should stop using the Hales-Novick preferred language of “11.56 a month.” Why not say $140 a year?
Oregon City roads are mostly driven on by Oregon City residents (since trunk roads like Hwy 99 get money from a separate pot). So it’s reasonable to ask Oregon City residents to pay for them.
Portland roads are also driven on by people from Beaverton, Clackamas, Vancouver, etc etc etc. So it’s not reasonable to ask Portland residents to cover all that cost. A large portion should come from either Metro or state.
(or, we could just move to a more sensible metro-wide council rather than a collection of little cities, which would work out cheaper and more representative, but that would cost politicians their jobs so they’ll never support it…)
“But far more surprising was fury from small businesses and nonprofits, some of whom faced the possibility of paying thousands of dollars a year.”
Surprising to fucking idiots, maybe.
Splitting the opposition between homeowners and businesses until just after the election (Nov. 14) is cynical even for this city.
What Blabby said.