Portland mayor Ted Wheeler (D.) is pushing for a one-year freeze on nearly all planned or proposed increases in taxes, fees, and utility rates after receiving complaints from residents of the Oregon city, which has one of the highest income tax rates in the country.
Some business leaders have suggested that the high taxes may be driving people out of the city.
“The bottom line for me is that Portlanders are overburdened,” Wheeler told the Oregonian. He acknowledged that the freeze would require significant changes to his proposed $7.1 billion budget, including cuts and reductions to municipal services.
City bureaus have planned for a 6.6 percent hike on water and sewer services, a 20 percent increase in parking meter rates, and 5 percent increases for several building and development permits, according to the newspaper. The Portland Bureau of Transportation separately proposed a “transportation utility fee,” which would cost homeowners $96 a year.
Outside the city, Portland General Electric recently proposed raising its rates by an average of 14 percent for all consumers. The mass transit agency TriMet is considering a 20 percent fare increase. Garbage disposal fees may also be raised by 11 percent, according to the Oregonian.
Local business taxes have also shot up 32 percent since 2019 to pay for various state programs, according to the Portland Business Alliance.
“We’re hearing from our constituents that the increased tax burden is really hitting households,” said Wheeler. “We need to talk about how to sequence these, what our priorities are and what can be put off.”
Wheeler convened a meeting this week with representatives from the county and regional governments, as well as with public school system and utility leaders to raise alarms about the region’s “collective tax burden.”
An economic report released in February noted that Portland has one of the highest income tax rates in the country, according to the local CBS outlet. The city’s voters recently approved tax increases on high-income earners to pay for preschool for all and to provide more services to the homeless. A report last year from a consultant for Oregon Business & Industry found that Portland’s income tax rate of 14.7 percent on high earners was behind only New York City.
“Multnomah County has the highest marginal tax rates in the United States of America, but we don’t have the income to support that level of taxation,” Wheeler told the CBS outlet in February.
The Portland Business Alliance has observed that residents may be voting with their feet, with Multnomah County seeing a population decline of nearly 13,000 in 2021.
The mayor and the city’s commissioners will vote on the budget later this month. Meanwhile, voters in Multnomah County will decide next week whether to approve a 0.75 percent tax on capital gains to fund lawyers for tenants facing eviction.