The City Club’s Street Fee Report
A committee of the City Club of Portland has released a report outlining the City of Portland’s dire need for street maintenance and repair funding, with funding recommendations that include a gas tax and a mix of other fees and reprogrammed revenues. The full membership will debate and vote on the report Friday, September 11, at their noontime meeting.
I’ve done a fair bit of work on this issue in the past, both as an employee and as a consultant for the City. It’s an issue I care very much about, for a number of reasons. Professionally, I’ve invested a lot in trying to get this issue resolved, and have not yet come up with a plan that passes political muster. As a property owner and frequent driver in Portland, I recognize the value streets have for our economic future as well as for the city’s livability.
There is much to applaud in the City Club committee’s report. The committee rightly points out that the current city council did not create this problem. The maintenance backlog has been building for decades, and that costs have spiraled upward at a geometric rate over that time. That’s because the greater the level of disrepair, the more it costs to fix – and the faster the street will deteriorate to an even more expensive level in the future. The report also correctly points out that the City doesn’t have a lot of discretionary money lying around to dedicate to roads – certainly not the $205 million per year needed for the next decade. The report also correctly notes that the principal reason that the City hasn’t enacted successful funding measures in the past is because vocal minorities threaten – successfully – political death to Commissioners who support new taxes or fees.
But the report comes up short in a few areas. While the report correctly points out that no one funding source will be able to raise the full amount, the solution recommended – a local gas tax, local weight-mile fees, a commuter tax, and some parking or other fees – falls woefully short. Most of these also will require voter approval, which will delay collection of revenues until at least 2017 – if the vote is successful (and there’s no reason to believe it would be).
The majority report also asserts that the minority’s preferred solution, a transportation utility fee (TUF), is inherently regressive and not use-based. The majority’s reason for this is their second assertion that the TUF would have to be “flat” for households, but that is not necessarily the case. Commissioner Novick has explored alternatives which differentiate fees by various use-related criteria, with discounts for low-income households. While imperfect, they make the TUF less regressive than a per-gallon gas tax, which hits low-income households hardest. Depending on the criteria for varying the household fee, it also correlates reasonably well with use. As the minority report also points out, the TUF is the only option that raises significant revenue that could be enacted in time for collections to begin in the short term – and thus, start to fund the fixes that will stop the problem from getting worse.
That said, the TUF is politically very unpopular. It’s new, it’s complex, has higher overhead than the other options, and has a bad reputation in Portland due to past failed attempts. As the committee’s report suggests, the City needs to educate the public better about the need as well as the available remedies.
In my view, the best solution is a “cocktail” of options that would include a gas tax as well as a TUF, keeping both small enough that neither disrupts the local economy or dings any one person’s pocketbook too deeply, and ensures the pain is spread as widely as are the benefits of a great transportation system.
