With hardly a nod to the city's squalid budget, City Council voted unanimously to ratchet up business property taxes to pay for Christmas lights and to plop an ice-skating rink in the middle of Pioneer Square. It's estimated that the increase will earn $4.5 million over nine years--$3.5 million will be spent on stringing and lighting additional white lights around downtown from November to March; $1 million will be contributed to an ice-skating rink.

Such projects that coordinate perceived public interest with private enterprises have been the darling for Vera Katz' administration. The city contracts with non-profit organizations or management corporations to fund causes like youth services or the management of Pioneer Square. But, as one employee at the Bureau of Licensing--the bureau charged with handling and directing many of the funds collected by the city and distributed to the private entities--points out, such arrangements actually carry hidden burdens for the city's budget.

"It uses the power of the city government to levy money which is then turned over to a private entity to manage Pioneer Square," he said. Although the idea to increase business property taxes by two cents per square foot was proposed by the Portland Business Alliance, an organization representing some of the city's largest retail stores, all businesses within 45 blocks will need to comply. With a 4-0 vote by City Council on Wednesday, the idea is now a city ordinance, no longer a whim of private business.

For every dollar that the property tax increase collects, explained the city employee, it costs the city two cents to handle and manage these funds, an estimated $90,000. "The city is taking a loss managing the program," he explains. "We're subsidizing the Chamber of Commerce."

At a time when public library hours have been trimmed and public school funding is sparse, it may be difficult to find a wide-base of public support for funding frivolities like an ice skating rink and expansion of the downtown area where Christmas lights will be hung. But approving a tax suggested by a business organization effectively allows City Council to wipe their hands of responsibility for the program. Moreover, because these programs will be managed by private entities, they will operate outside the normal scrutiny of the public. Unlike a governmental entity, there can be no freedom of information requests to look at budgets. "It's about getting around democracy," concluded the city employee.