Street Fee Reset! The Residential Fee Goes Away. Instead, Hales Wants to Know Which Funding Mechanism You’d Prefer

The residential portion of the Portland Street Fund (née street fee) is dead.

After trying and failing with Commissioner Steve Novick to win three votes for a combined $41.8 million set of residential and business fees, after months of wrangling and changes, Mayor Charlie Hales has announced a new plan ahead of a planned hearing set for tomorrow night.

The city council will proceed with a vote on the business fee, deemed less controversial and having won the grudging acceptance of the Portland Business Alliance and other groups. But in what’s billed a first for Portland—taking a page from cities like Seattle that have used advisory votes to shape policy—Hales will ask his colleagues to send an array of possible non-business proposals before residents this coming May—with voters asked to choose the one they like best. The business fee wouldn’t be implemented without whatever companion measure emerges.

According to a statement released at 5 tonight, the mayor’s office says those options “likely will include an increased gas tax; a progressive income tax; a local-option property tax levy; and other mechanisms.”

“This vote will identify the city’s answer to public funding for street maintenance and safety,” Hales says in the statement. “From the beginning, I’ve said the options are ‘Do this, do something else, or do nothing.’ And ‘do nothing’ isn’t acceptable. That hasn’t changed. We will ask the voters to pick from the array of funding options, and we’ll adopt the one with the most ‘yes’ votes.”

Hales also gave the Mercury a fresh quote:

“Other City Councils have been stymied by the issue of paying to fix our deteriorating streets. For me, this hasn’t been 14 months of hearings, it’s been 14 years of hearings. We can’t kick the can down the road. This proposal accepts the reality that our streets need funding, and the reality that all funding mechanisms draw criticism. We cannot let that lead us into saying, ‘oh, well. We tried. Next City Council: Good luck to you.’”

City hall had been abuzz all day Wednesday that something major was in the works leading up to tomorrow’s hearing. But details were held tight about what kind of shift might be in the offing, other than fingers pointing up to the mayor’s office—which took another beating this week at the hands of the Oregonian‘s editorial board. And, indeed, it’s telling that Hales’ name is on the new proposal, and not Novick’s.

As I wrote in this week’s Hall Monitor, Commissioner Dan Saltzman loomed as the last, best chance to save the proposal Hales and Novick had worked up late last month—an income-graded gas-consumption fee that replaced an income tax sought by several advocates and former likely third vote Commissioner Amanda Fritz.

Wooing Saltzman was an uncomfortable place to be, given his previous insistence that whatever came forward go to voters first. But it became necessary after Fritz, on Monday, announced her opposition to the new gas fee. Turns out, a promise to refer the street fund to voters in 2020 wasn’t enough of an enticement for Saltzman, whose staff closed shop early today for an off-site event.

I’ll update with reaction. Read the full statement from Hales here (pdf).

Update 5:20 PM: I’m told Hales spent much of Wednesday shopping the new proposal around to his colleagues. After tomorrow’s hearing, Hales’ spokesman, Dana Haynes, says the mayor’s office will work with Novick’s office and the city’s revenue bureau and attorneys to craft the options that would be included in the advisory vote.

Novick also has since sent out a statement saying he endorses the plan, reminding everyone than when a constituent once suggested something similar, he said it was “an intriguing idea.”

He name-checked some of the more vocal critics of the dashed plan, SE Uplift president Robert McCullough and economic consultant Eric Fruits (and the O) and said the genius of the advisory vote is that it solves the problem of the council choosing one option and everyone else with a different favorite option making common cause against it.

My concern about a public vote has been that I know that most Portlanders agree we need more money for transportation, but I’m not sure a majority can agree on any particular solution. There are people, however, who believe passionately that their favorite option would get a majority if it only went to a vote. This gives people an opportunity to campaign for their favorite options. For example, Messrs. Robert McCullough and Eric Fruits can campaign for their favorite, the gas tax. The Oregonian editorial board can campaign for its favorite, the property tax. The progressive groups, such as AARP, Oregon Walks, and the Coalition for a Livable Future, can campaign for their favorite—and my favorite too—a progressive income tax.”

Update 5:40 PM: One thing that’s not yet certain: Whether Hales and Novick’s colleagues will agree to anoint whatever option emerges from a 2015 advisory vote. That’s especially going to be an issue if none of the three to six options listed receives majority support—because it may not leave the council in any better shape than it is right now.

But Hales is likely to get his way on having the vote all the same—a clever end-run around what looked like dead-end, keeping the dream of new transportation revenue alive and possibly setting up some other kind of change we haven’t seen coming yet. Just like the last few times that’s been the case.