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Portland Commissioner Dan Saltzman released a tax proposal on May 24, 2016, to pay for affordable housing.

Portland Commissioner Dan Saltzman on Tuesday unveiled details of a new tax to pay for affordable housing -- with city officials offering dramatically different views on how much money the proposal would raise.

Saltzman, who oversees the Portland Housing Bureau, wants to implement a new 1 percent construction excise tax on residential and commercial projects.

"The lack of affordable housing is the greatest crisis facing our City right now," Saltzman said in a statement. "This proposed tax on new development will provide us with a dedicated funding source for the preservation and construction of much needed affordable housing."

Under state law, money generated from the residential tax must be used to spur affordable housing. But only half of the money from the commercial tax must go toward affordable housing, with the Portland City Council left to decide where the money would go.

Saltzman wants all the commercial tax money to go toward housing. But there's a huge gap in the financial projections.

In a recent memo, city budget officials estimated that the residential tax would raise about $3 million annually. But Saltzman's news release Tuesday suggested it would be closer to $5.4 million.

The gap is much bigger on the commercial tax. Budget officials estimated the tax would raise $11.5 million annually. But Saltzman's office pegged revenues at just $2.7 million.

The forecasts matter. The City Council is generally reluctant to earmark discretionary money without understanding the ramifications.

It's one thing to cede half of $2.7 million -- or $1.35 million -- to Saltzman's bureau. It's another to steer half of $11.5 million -- or $5.25 million -- without at least considering where else that money could go.

Mayor Charlie Hales, for instance, has indicated his interest to helping pay for higher police salaries.

Saltzman's chief of staff, Brendan Finn, said his office provided estimates based on the past five years, which included the recession. The budget office's forecast looked at the current year, then factored in projected growth based on city forecasts that capture the building boom.

Saltzman's office also lumped multifamily construction into the residential equation while the city budget office put those taxes under the commercial category.

Finn said Saltzman stands by his forecast but notes that the City Council can choose to "look at what the range has been historically."

With affordable housing and homelessness morphing into the city's top political priorities, it's not clear if members of the City Council will resist Saltzman's plan.

It'll head to the City Council for review June 16.

-- Brad Schmidt

503-294-7628

@cityhallwatch