The Oregonian Editorial endorsement: Vote ‘no’ on Portland clean energy fund measure
The many needs in Portland far outstrip the money the city has to invest in solutions. So it’s not surprising that advocacy groups would develop Measure 26-201, a Portland ballot measure that aims to impose a gross receipts tax on big businesses to fund clean-energy initiatives and job-training for low-income Portlanders and communities of color.
But in evaluating any new tax proposal, Portlanders should consider whether it’s well-structured, minimizes negative impacts and if it’s a top priority for which the local government should create a new tax. Unfortunately, on all these fronts, Measure 26-201 fails the test. Portlanders should vote no.
First, there’s the question of how well it’s structured. The measure calls for imposing a 1 percent tax on the Portland sales of companies that ring up more than $500,000 in revenue in Portland and more than $1 billion nationally. Groceries, medicine, health care services would be exempt but other “retail” operations such as banks would not be.
But, like other ballot measures that attempt to tackle tax policy, the measure is so vague that no one really knows how many and which companies will be affected. In evaluating an earlier version of the proposal, the city revenue bureau said the tax could affect anywhere from about 115 companies to more than 700. A report by ECONorthwest, which was commissioned by opponents, estimates the tax could raise between $43 million and $79 million a year. And the definition of “retail” is so unspecific, that companies aren’t even sure whether they would be included or not. (As a matter of disclosure: It is not presently known whether the Oregonian Media Group, which runs The Oregonian/OregonLive and is owned by Advance Local Media, would be subject to the tax.)
Second, this tax will hit Portlanders, and low-income residents will likely feel it the most. Proponents dismiss the idea that national companies would bother to change pricing in stores or otherwise seek to pass the tax on to consumers. Economists and the city’s revenue bureau, however, tell us differently, warning that some, if not all, of the burden will likely be passed down to consumers.
Even if Portlanders don’t trust economists or the city, they should look to their own common sense. Consider banks, which are explicitly included as companies that will have to pay this tax. Banks excel at creating, imposing and collecting a wide range of fees on individual customers. Why would voters believe that banks would refrain from passing on that tax burden to its Portland customers?
And finally, if Portlanders bless the creation of a new tax in the city, is this the right priority, especially as the state looks to similarly address this need?
The backers are right to highlight the importance of climate change, as well as its disproportionate impact on low-income residents and communities of color. But state lawmakers are also looking at creating “clean energy jobs” legislation that takes aim at many of the same goals. The Legislature – not a ballot measure – is the appropriate place to work out the complicated interests and impacts of such a policy.
In addition, the state already collects money from Oregonians for energy retrofits and other programs administered by the Energy Trust of Oregon. It would be far more efficient to revise the agency’s focus to ensure low-income homeowners or renters benefit from those dollars rather than create a tax that will cost all Portlanders even more.
Politically, the measure is brilliant. It draws on Portlanders’ frustration with the state’s flawed corporate-tax system, combines it with Portlanders’ concern for climate change and seals the deal with a promise to use the proceeds to help those left behind amid the region’s recovery. Those are laudable goals that deserve more attention.
But economically and pragmatically, those battles are best waged by the state. As much as the measure may speak to Portlanders’ hearts, they should vote “no” and place their faith on a statewide solution.
The article is originally from The Oregonian
October 20, 2018