Novick’s Gas Tax Bill Receives Wide Support as it Heads for Ballots

Monday, February 01, 2016

Brendan Murray, GoLocalPDX Contributor

Things are looking up for the gas tax proposed by Portland City Commissioner and Transportation chief Steve Novick. On Wednesday, the proposal passed through the city council, riding support from wide-reaching areas of the Rose City and guaranteeing the bill would be on voters’ ballots in May.

Novick’s gas tax was approved for ballots by the Portland City Council on Wednesday via unanimous vote. Now, voters are the only thing keeping the tax, which would be used to fund costly street repair projects, from being instituted.

That may not be much of a hindrance. In a poll conducted when Novick first proposed the tax last year, roughly 55 percent of 400 Portlanders surveyed say there would vote in favor of the gas tax. 37 percent said they would vote against it and 8 percent said they were undecided.

Jim Moore, Director of the Tom McCall Center for Policy Innovation at Pacific University, told GoLocal that while those poll numbers are encouraging, they are far from a guaranteed victory for Novick’s proposed tax.

“With a poll of 400 people 55 percent of the people in favor of it translates to something like 50 to 60 percent in an election, which is definitely a majority, but it could be a razor-thin one,” Moore said. “The numbers he really should have confidence in are the fewer ‘no’ responses. 37 percent translates to about 40 to 42 percent of voters who said they were against it, and that is very good news for the tax.”

Endorsements Too

The proposal seems to be popular not just with voters, but with politicians and city leaders as well. Mayoral candidate Ted Wheeler and current Mayor Charlie Hales both lent it their support already.

The City Club of Portland said they found the gas tax to be “the most feasible” proposal to repair the city’s streets. The Portland Business Alliance, the Northeast Coalition of Neighborhoods and the Bicycle Transportation Alliance also have indicated they support a gas tax.

Most recently, Stuart Emmons, Novick’s opponent in his quest for re-election, said that he supports the proposal, though he has concerns with its effects.

“I am for addressing our huge street maintenance problem, it has only gotten worse since some on the City Council bungled the street fee so badly. I am supportive of the gas tax with reservations,” Emmons told GoLocal.

“Trust needs to be restored after the street fee imbroglio with new leadership. PBOT has to get their accounting cleaned up so funds going in are properly spent. I am (also) concerned that a gas tax may tax lower income Portlanders more, as they may use more gas. Vehicles that do the most damage to our streets - busses and large trucks - need to be part of helping to pay for street maintenance. The money from the tax needs to be spent on what is stipulated in the tax language. The gas tax will help, but it will not fix the problem by itself.”

Novick said the support from the public and city leaders was “extremely encouraging.”

"It gives me enough confidence to say we've got a good shot at passing it if we work hard," Novick said.

How The Tax Would Be Used

Estimates by Novice and the PDOT say that the ten-cent per gallon tax would raise $64 million over four years.

Novick asked the Portland Bureau of Transportation to draft a list of possible projects that could be funded by the tax. It includes major street repair projects, funding for safe routes to school throughout the city, and traffic safety improvements in high crash corridors.

In that breakdown, $35.8 million would be used for paving projects, including more than 30 lane miles of busy street paving. $8.8 million would be used for safe routes for school projects, which including school crossings, paths and missing connections, sidewalks, traffic calming, and bicycle route connections. $6.34 million would be used to repair the city’s busiest sidewalks.

The remaining $13 million would be split among other projects, including improvements to bike lanes, crosswalks and high crash areas.

Related Slideshow: Ways To Fund Street Repairs Without A Street Fee

Prev Next

Portland Gas Tax

Currently, there is a $.03 Multnomah County gas tax. The tax revenue is split about 20 percent to Multnomah County and 80 percent to the city. Every $.01 increase in the tax would next about $1.36 million to the city, according to PBOT’s budget. Given that, the City of Portland has the power to levy its own gas tax.

The Politics: Hugely unpopular for not a lot of cash, but perhaps less unpopular than an income tax.

Prev Next

Dynamic Pricing

Seattle and San Francisco use “dynamic pricing” on their parking meters. That means that the price to park goes up depending on the time of day and the location of the meter. For instance, if you are parking right in front of the Schnitz at 7 p.m. on a Saturday night, it’s going to cost you more than a $1.60 an hour.

Portland’s current meters could be programed for dynamic pricing, according to experts, and with 9,000 meters in the city, that could add up.

The Politics: Despite some grumbling, the city doesn’t need anyone’s permission to raising parking meter fees. Parking revenue is completely unrestricted, meaning it can be spent anywhere and on anything.

Prev Next

License Registration

With 692,201 registered vehicles in the county in 2013 a $20 vehicle license registration fee, with a 20/80 split to the county (like with the current gas tax), could generate $11 million for the city every two years.

The Politics: This would have to go through the Multnomah County Board. The county doesn’t really need cash for infrastructure at the moment, as it has a few big federal grants lined up to pay for upcoming bridge repairs. The challenge would be offering the commissioners a deal sweet enough for them to take the political hit.

Prev Next

More Parking Meters

A parking meter costs about $1 an hour to operate. So at $1.60 and hour, about $.60 is pure profit. More meters are already in the works for Northwest Portland. Meters in all major shopping districts from Southeast Hawthorne, Division and Belmont Streets to Northeast Alberta Street to North Mississippi and Williams Avenue could raise money for improvements in those areas.

The Politics: Neighbors and businesses would whinge endlessly. But many studies say that parking meters benefit businesses by keeping spaces turning over. Residents could be issued parking stickers to exempt them from charges.

Prev Next

Raise Smart Park Fees

The city controls 3,800 spaces in six downtown garages. Smart Park cost about $11 million a year to run, according to PBOT’s budget. All told parking charges from meters and Smart Park brings in $45 million a year but the system is not operated to maximize revenue. Dynamic pricing might be hard to implement at the garages but the city could raise the rates.

The Politics: Downtown business interests might complain that raising parking rates would stop people from shopping and visiting downtown. The public interest would have to decide if that’s a risk to take, given the alternatives are an income tax or tattered roads.

Prev Next

Shift SDCs from Parks

System Development Charges are fees that different city bureaus level against new construction projects in Portland. Parks, PBOT, the water and environmental services bureaus can all level SDCs at developers.

The rationale is, if new development puts a strain on city infrastructure, like roads and sewer lines, then it should pay extra to upgrade the systems. However, most SDCs get charged to developments in the city’s center, while the revenue goes to pay for projects all over Portland.

Over the last four years, Parks & Rec has averaged about $9 million a year in SDC revenue. The city could pull the bureau’s power to charge and let PBOT charge more.

The Politics: It would be a fight with parks supporters. Parks has said it needs $49 million a year just for new parks acquisitions. But it might be more logical to raise that money through bonds, or repurposing taxpayer-owned golf courses, especially ones in park-starved parts of town.

Photo: Berkeley Park in SE Portland, via Wikimedia Commons

Prev Next

Raise Retirement

Raise police and fire reitrement.

Police Chief Mike Reese announced his retirement this year at the ripe old age of 55. But he qualified for retirement much earlier, at age 50. Putting five years on the clock would certainly save the taxpayers some cash that could be used on roads or anything else.

The Politics: You’d have to face the union and that wouldn’t be pretty.

Photo: Former Portland Police Chief Mike Reese

Prev Next

Reform Retirement

Portland’s Police and Fire Retirement Fund was set up by voters in 1948 and has resulted in a huge hole the public must now dig itself out of. Despite voter-approved reforms in 2006 and 2012, the obligation is still a fiscal time bomb. As of June 30, 2012, unfunded liability in the fund was in the neighborhood of $2.9 billion.

The Politics: Public employee pension obligations are the stuff of municipal bankruptcy court. It’s a hard fight, but reforms were suggested by Portland’s City Auditor’s Office as recently as Jan. 2013.

Prev Next

Fix Tax Compression

In 1996, Measure 50 cut and capped property taxes across the state. It froze the assessed value of homes at their 1995 level and limited growth in value to three percent a year.

In Portland, the result is a system in which homes that have increased in value rapidly pay very little taxes and homes that haven’t increased in value much can pay sky-high taxes. The short hand for the squeeze in tax equity is “tax compression.”

The city loses about $24 million a year due to tax compression, according to the city auditor. If the city, county or state could figure out a way to fix the issue there could more money for everyone: They’ve had 20 years to think about it.

The Politics: There has been endless talk about tax reform in Oregon. The Governor put it as a major priority of his fourth term. All the old tax-revolt warriors have long since left the scene, but the political will to do much more than talk will be hard to find.

Prev Next

Stop Urban Renewal

About $.25 of every $1 that the city gets in property tax revenue goes to pay down debt on urban renewal projects. Mayor Charlie Hales has talked about sunsetting urban renewal districts.

On the immediate horizon, the Eastside Industrial URA has the power to issue new debt up until 2018. One step forward would be to stop that right now.

The Politics: Urban renewal is a cash cow for commissioners and their pet projects. No one really wants the system to change. But if it’s a choice between taking a hit on pet projects or a city tax revolt, commissioners might support clipping their own wings a bit.

Prev Next

Put PBOT Out to Bid

Private companies can pave roads and clean them too can’t they? What if they could do it for less money than the city? PBOT could put services like street repair and cleaning out to bid.

It might not save a lot of cash, but it might win trust with the voters by showing them that the city was trying to get the best price for the public’s money.

The Politics: “Privatize” is dirty word in liberal Portland. But then, "income tax" might prove to be even worse.