The Metro Council is set to convene on June 17 for a first reading of an ordinance aimed at modifying the regional government’s supportive housing services levy. This proposed change is designed to amend the tax threshold by indexing it to inflation, thereby exempting more taxpayers from the levy.
The ordinance comes in response to escalating concerns among taxpayers who argue that recent inflation rates have inadvertently shifted middle-income individuals into taxable income brackets that were initially intended for high earners only. Under the current structure, single taxpayers are exempt from the 1% tax on any income below $125,000, while married couples enjoy an exemption up to $200,000.
According to Metro staff, this measure seeks to ensure that the supportive housing services tax remains focused on high-earning households. The staff report emphasizes that inflation since the passage of Measure 26-210 has led to an increasing number of middle-income households falling within the tax thresholds without a corresponding rise in their purchasing power.
Indexing the threshold to inflation would potentially reduce the number of households subject to this tax. However, Metro staff estimates that the changes would not significantly impact overall revenue, as most of the supportive housing services personal income tax collections come from high-income households that far exceed the current exemption levels.
Currently, there appears to be no noteworthy opposition to the ordinance within the community. While some stakeholders have voiced concerns about the revenue implications of this ordinance and other reforms proposed for supportive housing services, Metro staff have indicated a lack of substantial objections at this stage.
The supportive housing services tax, approved by voters in Clackamas, Multnomah, and Washington counties in 2020, has consistently collected more revenue than initially forecast, causing dissatisfaction among many taxpayers who feel progress on homelessness issues in the Portland metro area has been insufficient.
For over a year, the Metro Council has been deliberating on the possibility of revisiting the tax details, potentially placing an updated proposal on the ballot for voter approval. Among the changes under consideration are extending the tax collection period to 2050, adjusting income exemption thresholds for inflation, and lowering the tax rate to 0.75% in 2031.
Metro leaders initially aimed to submit these changes for a vote in May. However, discussions and differing opinions prevented them from meeting this timeline, with the new target set for a November ballot.
The proposed ordinance requiring no voter approval seeks to implement indexing by the 2026 tax year, providing immediate relief to some taxpayers. Additionally, it aims to streamline administrative processes associated with the tax reporting and payment system.
Currently, taxpayers who owe $1,000 or more are required to estimate their tax payments and submit them quarterly. This has posed challenges for many taxpayers, particularly those who mistakenly believed they weren’t earning enough to meet the threshold, leading to fines and interest on unpaid taxes.
The new ordinance suggests raising the minimum threshold for estimated payments to $5,000, which Metro staff believe will significantly decrease the administrative burden for most individual tax filers without a notable loss in revenue for the program.
Provided the ordinance passes, Metro plans to publish the updated thresholds for taxation by November 15 each year. While inflation may prompt the exemption threshold to rise, the ordinance stipulates that it cannot decrease in value during periods of deflation. Therefore, if price indexes decline in any given year, the exemption threshold will remain stable at the previous year’s level.
To facilitate these changes, Metro intends to collaborate with Portland’s Revenue Division. This collaboration aims to inform taxpayers as well as accounting and tax software firms about the annual adjustments in income exemption levels and modifications to estimated payment protocols.
If Metro decides to pursue an extension of the tax from voters and secures approval, the indexing mechanism will continue as long as the tax extension remains in effect.
image source from：https://www.wweek.com/news/county/2025/06/11/metro-regional-government-aims-to-index-housing-tax-to-inflation-with-new-ordinance/
