Correction appended.

A Multnomah County judge has upheld the constitutionality of a ballot petition that would tax large Portland retail stores to pay for a green jobs fund. Still, the measure faces political challenges from Portland's biggest business group and Mayor Ted Wheeler.

Judge Ben Souede wrote in an opinion published Monday that arguments made by the petition's opponents carry "logical force" but do not render it unconstitutional.

At the same time, Souede noted a significant error within the text of the petition: It says that if it is enacted, it would be added to a nonexistent part of city code.

Multnomah County Circuit Court Judge Ben Souede, pictured in 2016 when he was general counsel for Governor Kate Brown. (Beth Nakamura/Staff)

The petition, officially called Portland Clean Energy Community Benefits Initiative 2018, says it would amend Portland City Code, Chapter 7. But there is no such chapter. Instead, the city code includes a section called Title 7.

The constitutionality squabble questioned whether that error means the petition does not comply with a section of the Oregon Constitution requiring a measure's full text be presented to voters. In his ruling, Souede wrote that while the error renders the petition "inaccurate and leaves voters with incomplete information," it does not violate the "full text" requirement.

Souede's ruling offers a major victory to petition backers, who have united under the name Portland Just Energy Transition Initiative. With it, they move closer to being approved to gather signatures needed to put the petition on Portland ballots in November 2018.

If the petition makes the ballot and is adopted by Portland voters, it would charges businesses with at least $1 billion in total sales and $500,000 in Portland sales a 1 percent surcharge. Prescription medicine, health care and many groceries would be exempt.

It's not clear how much money the tax would raise. But revenue from it would be deposited in an account for clean energy projects and green-sector job training for people of color, women, the disabled and chronically unemployed.

Though it is far from making the ballot, the tax has already drawn opposition from two powerful city forces: the Portland Business Alliance and the mayor. The business group stands firmly against the tax. Wheeler said Monday that though he supports the goals of the petition backers, he is "not a fan" of gross receipts taxes.

The climate-related tax has already been made a political football inside City Hall. The business group has said its members will back Wheeler's proposal to increase the Portland business tax, but only if he can find a way to kill the sales tax petition.

Asked Monday how he plans to negotiate the situation, Wheeler said he believes the Energy Trust of Oregon, a nonprofit that promotes efficient energy usage, can "redirect" some of its resources to satisfy petitioners' goals. Wheeler said such a compromise is possible to avoid "an expensive and divisive battle at the ballot in November."

-- Gordon R. Friedman

503-221-8209

Correction: This story has been updated to correctly reflect that Judge Ben Souede's ruling only affects the constitutionality of the proposed petition, not petitioners' ability to collect signatures.