December Portland City Council street fund hearing

The Portland City Council listens to testimony on Dec. 3 related to the proposed $46 million Street Fund.

A final vote on the proposed $46 million Portland Street Fund, an income tax and business fee for paving and safety projects, is now tentatively set for Dec. 17, although city leaders acknowledge some details remain unclear.

As expected, Commissioner Steve Novick and Mayor Charlie Hales introduced several amendments Wednesday to their proposal to find more revenue for street projects.

But changes to the plan aren't limited to adding a sunset provision to make sure the plan would have to get new City Council approval in 2021, or a promise that the city won't spend less than its current paving budget ($11.3 million) on roads in future years.

"I think we'll be cooking up another amendment over the next week," Novick said.

The amendments don't include referring the whole package to voters.

Novick, who oversees the city Transportation Bureau, said he wants to examine whether Portland can legally tax the income of employees who work in the Rose City but live elsewhere.

But he's most interested in looking at how the business portion of the fee, which charges a business based on its gross revenue, number of employees and square footage, affects home-based businesses and other micro-entrepreneurs.

Novick credited Jane and Thom Staugas for bringing the issue to his attention.

Jane Staugas started Bridgetown Bow Ties, an Etsy-based business, out of her Southeast Portland home in October. In an email to The Oregonian, Staugas said her business was being treated "as if it was a mini Nordstrom's."

Staugas sells handmade bow ties. "A business like mine at best will gross a few thousands dollars in a year," she said. But the current fee structure would require her to pay $180 a year -- in addition to a residential income tax. Novick said he wanted to postpone the vote to address the situation.

Wednesday's meeting, billed as a second reading after last month's five-hour public hearing, turned into another opportunity for critics to voice their displeasure.

Robert McCullough, president of Eastmoreland Neighborhood Association and a member of a coalition of Southeast Portland neighborhoods, complained about the Transportation Bureau's response to public records requests.



McCullough, representing the group Southeast Uplift, said the city's calculations used to charge businesses are based on faulty data. He said many large users of the transportation system are misclassified and aren't paying their fair share.

Hales said if that's the case, the city could examine individual businesses after approving the street fund.

Ann Sanderson, a hair salon owner who participated in work groups on the street fee last summer, urged the City Council to table the plan altogether. "Both taxes, two of them, aren't ready for prime time," she added.

She also borrowed an analogy used by Novick to describe streets as "teeth" because of their need for preventive work. "It's like pulling teeth to get you to make any changes," Sanderson said.

Commissioner Amanda Fritz said that while some may view revisions to the plan as a moving target, the city is being responsive to the public's concerns. "To me this is an excellent public process that's very transparent," she added.

Fritz also said she asked the Transportation Bureau to look at rejiggering the income tax part of the plan to make that more equitable. Her proposal, which would charge residents a percentage based on their precise income, would result in higher taxes for wealthy residents. Transportation Bureau spokesman Dylan Rivera said that proposal may require a change to city code.

Commissioner Nick Fish, who said previously that he thinks voters should get to approve a final plan, expressed frustration.

"At a certain point we have to be more respectful of people's time," he said, asking when a final vote would be expected.

Novick said he expects a final vote Dec. 17th.

The City Council doesn't meet on Christmas Eve Day, but will meet Dec. 31.

Under the current plan, the city wouldn't collect any revenue until April 2016.

-- Andrew Theen