Novick’s Gas Tax Proposal Gains Momentum, Will Be on May 2016 Ballot

Wednesday, October 07, 2015

Brendan Murray, GoLocalPDX Contributor

Commissioner Steve Novick

Portland Transportation Commissioner Steve Novick’s planned gas tax proposal is gaining momentum, and will most likely be a ballot measure this May.

“For decades, City Hall has known we have a transportation funding problem, but has kept sweeping it under the rug," Novick said in a statement. "The voters recognize that if we keep kicking the can down the road, there won't be any road left. We need to act as soon as possible - and that means we should send a four-year ten cent gas tax for street repair and traffic safety to the ballot in May 2016."

As GoLocal reported last month, Novick is planning to propose a ballot measure for a gas tax, which would be used to fund desperately needed street repairs in the city. Novick is pushing for a 10 cent per gallon tax, which he said would raise more than $58 million over the tax’s four-year lifespan.

The City Council will be asked to formally refer the tax to May’s ballot in December or January.

Polls Show Promise

When Novick first floated the idea of a gas tax in September, critics doubted whether a tax increase would fly with voters, who must approve the plan via a ballot measure. Novick presented evidence on Monday that those naysayers may have been wrong.

According to a poll of 400 Portland residents conducted from September 24 to September 28 by Lake Research Partners, 55 percent of respondents said they would vote in favor of a gas tax. 37 percent said they would vote against the proposal, and 8 percent said they were unsure.

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 Incoming

The proposal has also gotten endorsements from influential groups around Portland. 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.

Moore said that while early endorsements like those are “significant.”

Both of Portland’s candidates for Mayor have also pledged their support to the tax. Ted Wheeler told GoLocal last month he was in favor of the gas tax and believes it can help fund the street fees. Charlie Hales, current Mayor of Portland, initially told GoLocal he was not in favor of the tax, before changing his tune later that week.

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 Money Would Be Used

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, $32.5 million would be used for paving projects, including more than 30 lane miles of busy street paving. $7.2 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. $6.3 million would be used to repair the city’s busiest sidewalks.

The remaining $12 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

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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.

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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.

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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.

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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.

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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.

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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

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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

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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.

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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.

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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.

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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.