A coalition of business lobbyists, financial managers, and company executives in the Portland area is advocating for a major overhaul of several local taxes, as well as changes to the way these taxes are adopted.
Convened by Governor Tina Kotek, this group is focusing on reexamining recently adopted taxes that have garnered criticism for their handling of issues such as homelessness, preschool costs, and climate change.
Their suggestions, while not mandatory, provide a reference point for discussions among elected officials and the public at various levels of government.
The group consists of ten members and operates as a part of the Portland Central City Task Force, which was established by Kotek in 2023 to address various challenges faced by the city in the aftermath of the COVID-19 pandemic.
Members include representatives from major organizations such as the law firm Schwabe, semiconductor company Ampere, the Portland Metro Chamber, alongside financial management firms and private foundations like Meyer Memorial Trust and the 1803 Fund.
A key focus for this advisory group is the potential impact rising local taxes may have on prompting wealthy residents and companies to leave Multnomah County.
They emphasize that taxpayers increasingly feel their contributions are not effectively improving public services, which could have serious long-term implications for the community.
The report highlights the risk that if the city’s taxable capacity continues to decline, it will constrain necessary resources for those who depend on public systems.
In a statement, Governor Kotek praised the advisory group’s work.
She stated, “We must ensure local taxes deliver the outcomes Portlanders expect.
With more families struggling and economic uncertainty ahead, we can’t take our prosperity for granted.
This report builds on post-pandemic progress and will help keep our region moving forward.”
The group has concentrated on three local taxes, which have all exceeded revenue expectations, suggesting they have failed to deliver on their promises while draining the local tax base.
The Portland Clean Energy Fund (PCEF) is a 1% tax on large retail businesses aimed at funding projects to reduce carbon emissions.
Remarkably, it is expected to collect $1.6 billion in its initial five years—five times the initial projections.
Next is Multnomah County’s Preschool for All, an income tax targeting affluent residents to make preschool accessible to all families.
Critics argue this program has left hundreds of millions of dollars unspent, although the county argues these funds are reserves and not intended for immediate use before 2034.
Finally, there is Metro’s Supportive Housing Services Fund, which also places taxes on high-income residents and aims to finance programs addressing homelessness.
This fund is anticipated to bring in $1 billion in unanticipated revenue by 2029.
The tax advisory group’s proposals for reform include adjusting PCEF through a ballot measure to allocate any revenue exceeding forecasts to Portland’s general fund.
They suggest transforming PCEF into a sales tax affecting consumers rather than businesses.
Additionally, they propose halting the collection of Preschool for All revenue until a comprehensive review of the funding mechanisms and governance can be conducted.
This recommendation aligns with Governor Kotek’s earlier calls to reform this tax.
The group also recommends reforming Preschool for All to adopt the structure of the state-funded affordable preschool program, known as Preschool Promise.
For the Supportive Housing Services tax, the group proposes lowering the income tax rate to allow for construction funding and forming a new oversight body to govern its expenditures.
Several of these ideas emerged from a Metro-led task force focused on reforming the measure, although public opinion has hindered its advancement to the ballot.
Furthermore, the advisory group has also put forth measures aimed at making it more difficult for local governments to create new taxes and to revise the vetting process for proposed taxes before they appear on ballots.
These measures include requiring that all new tax ballot measures be reviewed by a five-person committee responsible for drafting measure summaries for voters.
They recommend that all new taxes should be limited to a ten-year lifespan unless they can demonstrate progress, and they also propose increasing the number of signatures needed for petitioners to qualify a new tax for the ballot, currently pegged at around 40,000 in Portland.
Not all members of the tax advisory group reach a consensus on these recommendations.
Marcus Mundy, Director of the Coalition of Communities of Color, represents 18 culturally specific organizations across Multnomah County.
The report notes that the CCC dissents on various aspects.
Specifically, they disagree with the notion that taxes alone are driving people out of Multnomah County, arguing that housing affordability, wage trends, and shifts in the workplace also significantly contribute.
Moreover, the CCC opposes proposed changes to the tax ballot process, labeling them as unnecessary hurdles to direct democracy.
They assert that the suggested modifications could undermine the intent of existing ballot measures.
Most proposed changes would require approval from local elected bodies or voters to advance.
The report emphasizes the need for timely action.
It states, “Portland now faces a choice: to adapt and strengthen its civic systems, or risk continued drift.
The decisions made in the coming months will shape the city’s ability to deliver on its promises, restore public confidence, and build a more inclusive and sustainable future.”
image source from：opb
