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Commissioner Steve Novick said the new plan is in some ways a mishmash of ideas and concerns brought up by several stakeholders this year.

(The Oregonian)

Correction appended

Gut check time is over.

Portland Commissioner Steve Novick unveiled the latest incarnation of his controversial street funding plan Monday. The details apply solely to the residential half of a $43.8 million proposal to pay for street paving and safety projects.

The latest proposal is a return in some ways to the original $53 million user fee proposed in May and discarded shortly thereafter in the face of public outcry. Under the latest plan, every Portland resident would pay an annual fee, with bills ranging from $36 to $144, depending on income

But now Novick is suggesting a five-tiered payment system based in part on estimated gasoline consumption rates broken down according to various income levels. The Bureau of Labor Statistics figures were tweaked slightly, Novick said, to increase the rates for wealthy Portlanders and decrease the fee for people on the lowest end.

"This is the best user fee that I can come up with after a year," Novick said. "I'm willing to let it stand or fall on its own merits."

Dana Haynes, Mayor Charlie Hales' spokesman, said his boss is "very supportive" of the plan. "This one is progressive," Haynes said, "and it's attached to consumption."

Hales and Novick spent much of 2014 trying to create a new funding source for transportation projects.

Haynes acknowledged that the process has been controversial. "Nobody wants to pay to take care of the streets so this mechanism seems workable, it seems doable, it seems logical," Haynes said. "The mayor is quite pleased."

At the same time he released the plan on Monday, Novick also presented a formal fallback option. If the City Council doesn't approve the street fee, or if residents or interest groups succeed in referring and overturning the plan at the ballot box, Novick will present a more progressive income tax option and campaign for the measure in 2016.

Here's what he said of that plan in a press release:

"What I would propose is an income tax that, for married filers, exempts the first $35,000 in income, and then applies graduated rates as follows: one-tenth of one percent of income between $35,000 and $60,000; two-tenths of one percent of income between $60,000 and $100,000; three-tenths of one percent of income between $100,000 and $250,000; and four-tenths of one percent of income above $250,000." Such a tax is also projected to raise $23 million a year. That proposal includes a $5000 per dependent deduction and is tax deductible on the state and federal returns.

Novick hinted that the progressive income tax plan was ready to go.

The first-term city commissioner consistently said he preferred a more progressive income tax that would charge wealthier residents more money while exempting low-income Portlanders, but the Portland Business Alliance, petroleum lobbyist Paul Romain and others pledged to fight any proposal that included creating a new income tax.

Novick acknowledged that some progressive allies would be unhappy with any plan that doesn't exempt low-income people. The new plan includes no discounts for multifamily apartment units or low-income residents. "It's something that I can live with," Novick said.

He said the gasoline consumption-based option is "not proportional to income" but gasoline use does vary according to income.

Sandra McDonough, president and CEO of the Portland Business Alliance, said the plan could be bearable for the chamber of commerce, too. "This looks like the kind of plan we can support," she said in a statement sent via email. "However, as we've said before the details matter. We will need to look closely at the details as a next step."

The idea for the plan grew out of conversations with Robert McCullough, a prominent Eastmoreland resident who's been at loggerheads with the city over the street funding plan.

Novick said the plan was his creation, contrary to reports by the Portland Tribune, adding that he'd never specifically discussed the new plan with McCullough.

In an email, McCullough said the newest proposal had "even less merit than the last half dozen."

McCullough, president of the Southeast Uplift neighborhood coalition, said the group still believes a proposal should be sent to voters for approval. "The reality is that it continues to exempt large special interests and pursue the highest charges for the middle class and small business," he wrote.

The business portion of the fee, based on square footage of a business and its gross revenue, remains the same.

Haynes said he believes all City Council offices have been briefed on the new plan.

Novick said in some ways, the new residential fee is responsive to what he views as the three camps most active in the street funding discussion. The Portland Business Alliance advocated for a user fee, progressive groups pushed for a plan based on income, and many others advocated for an increase to the gas tax.

"One could argue that this is a mishmash of all three," Novick said.

Portland plans to push state legislators to raise the gas tax starting in February during the next session in Salem, Haynes noted.

On Jan. 8, the City Council will hold a public hearing on the street fund at 6 p.m. at City Hall. A final vote is scheduled for Jan. 14.

Portland Residential User Fee: How much would you owe? Annual Income Range Average Annual Gas Spending Yearly Fee ≤$13K $1,231 $36 >$13K - $27K $1,850 $60 >$27K - $46K $2,622 $89.4 >$46K - $82K $3,284 $108 >$82K $4,071 $144

— Andrew Theen

CORRECTION: This story has been edited to correct the yearly fee for the lowest-income residents. Those Portlanders would owe $36 a year, not $24.