Credit Portland Commissioner Steve Novick with perseverance. Not long after the deflation of his proposal to adopt a tiered income tax for street maintenance and repair, he has returned with what looks a lot like ... a tiered income tax for street maintenance and repair. Only this time, he's calling it a user fee. The questions practically ask themselves.

What's changed?

Rather than assessing Portland residents a fee based solely on their income range, the latest version links payment in the most tenuous way imaginable to road usage. According to the Bureau of Labor Statistics' Consumer Expenditure Survey, the foundation for Novick's proposal, Americans generally spend more on gasoline and motor oil as their income increases. "Gasoline consumption," Novick told The Oregonian editorial board Tuesday, "is a reasonable approximation for road use."

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Editorial Agenda 2014



More jobs for Oregon

Position the Port for the future

Make Portland a city that works

Keep people moving

Build a culture of student success

Move forward on tax reform

Protect and expand personal freedom

_______________________________

Beginning with this survey data, Novick has created a handful of income tiers, each with a different monthly road "fee." If, as a single, married or joint filer, you make $13,000 per year or less, for instance, you'd pay $3 per month. And if you make more than $82,000 per year, you'd pay $12. The amount of driving you actually do makes absolutely no difference. The gasoline-use approximation exists only to provide an alternate route to what is, in effect, a tiered income tax.

Decidedly not wowed by the latest iteration is lobbyist Paul Romain, who represents local gas stations and had indicated a willingness to refer the previous incarnation to the ballot. "It looks like the old proposal," he told The Oregonian editorial board Tuesday. "It's an income tax. The attempt to tie it to gas usage is ludicrous." Romain, who's on vacation, said it was too early to say how he'd respond to the council's adoption of Street Fee 3.0.

What about the public-pension exemption?

Local governments in Oregon may not tax various kinds of income, including Social Security payments, PERS and its federal counterpart. This presents a whopping fairness problem when, say, a city proposes a tiered income tax for roads. In this regard, Novick's latest proposal is a vast improvement. It may behave exactly like a tiered income tax, but because it's a fee, he says, it will apply even to public pension recipients.

Where's the Portland Business Alliance on this?

"The devil's in the details," says PBA President and CEO Sandra McDonough, though her organization is not opposed to the tiered structure. What matters, she said Tuesday, is that the city administer the fee as a fee, meaning, among other things, that residents self-report their income ranges. "For us," she says, "the Rubicon is people having to file returns." The PBA opposed the last residential street-funding proposal because it would have created an income tax, a potentially costly development for both taxpayers and the city, which would generate high administrative costs.

Novick says the council will hold a hearing on the proposal on Jan. 8 and anticipates a vote on Jan. 14. Both will be interesting. "The only way to do it," he said of his latest proposal Tuesday, "will be to ask people for their tax returns."

Will there be a public vote?

Novick says he has no intention of asking the public to weigh in, but the people who'd pay the fee deserve a say. They know the city's roads need work, but we suspect they have some thoughts on the imposition of an income tax – either in fact or function – to pay for it. Novick's colleagues should refuse to support this, or any other, funding measure unless voters get to weigh in. And if commissioners do, here's hoping their work is referred.

In anticipation of a public vote, and perhaps failure, Novick this week also presented a fall-back plan: Send a truly progressive income tax to the ballot in 2016. The message isn't lost on Romain, who calls it a threat and says, "this isn't a way to have a discussion about policy." It is Novick's way, however. Portland residents should remember that in 2016, when Novick is likely to stand for re-election, perhaps on the very same ballot as his soak-the-rich fall-back tax.