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Rough Road to Prosperity

Facing Cuts, Transportation Bureau Covets Citywide Street Fee

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FACED WITH another gaping budget hole, partly thanks to Oregon's unreliable gas tax, the beleaguered Portland Bureau of Transportation (PBOT) is sharpening its pitch in hopes of selling city leaders on a series of controversial revenue measures, the Mercury has learned.

Topping the list, so far? A citywide street maintenance fee—long coveted by transportation advocates—that would be tacked onto every Portland property owner's water and sewer bill. It would mark the city's third stab at a fee, and passing it would require some political finesse. The past two attempts, under then-City Commissioners Charlie Hales and Sam Adams, fell short amid business pressure.

Bureau leaders also are mulling over a Portland-specific gas tax (seen as a stopgap measure that may be too tough a sell); market-based, inflation-indexed pricing at the city's meters and parking garages; bridge tolls; and an emissions-based tax.

PBOT Director Tom Miller has pondered those ideas at public meetings on the bureau's finances. But plans for a street maintenance fee and market-price parking have become serious enough that a specially convened PBOT task force of outside financial advisors has placed them atop the draft of a report (PDF) expected to go before Portland City Council as soon as next month. Miller wasn't available for comment before the Mercury's press time.

The 2007 bid for a street fee, if successful, would have earned $24 million a year, according to the latest draft of the task force's report—which the Mercury eventually obtained after it was sent out, along with an internal message, to the wrong email list.

"The gas-tax model is broken and it has no foreseeable 'quick fix,'" reads the report, still roughly worded, missing charts, and filled with placeholder text. Soon after it says, "Most critical and perhaps most important, we recommend that council immediately reengage its two previous efforts to establish a street maintenance fee."

A year after making more than $15 million in ongoing cuts, PBOT this fall is facing a $4.5 million shortfall. But concern over the future of Portland's transportation budget predates the latest round of spending reductions.

Both shortfalls are driven in part by falling gas-tax revenues—something that isn't likely to turn around. The state's gas tax rate has remained static since 2009, with little political will to hike it or tie it to inflation. Meanwhile, with fewer people driving fewer miles in more fuel-efficient vehicles, income has failed to keep up with projections. Advocates and transit officials dream of swapping the gas tax for a tax on vehicle miles traveled—but that fight's a long way off.

Although PBOT plans on presenting the final task force report to city council next month, the revenue ideas will have to be pushed by whoever takes over the bureau next year. That decision will be up to Hales, the city's first street-fee champion, who returns to city hall in January as mayor.

Hales also wasn't available for comment. But he was on record during this year's mayoral campaign supporting a shift from the gas tax and generally supporting new local fees to pay for transportation.

"The gas tax as a mechanism is a dinosaur; it's only a question of how much longer before we have to switch to some new system," he told transit magazine Portland Afoot this year. "Whether I keep the transportation bureau as one of my own bureaus [or] not, as mayor, I'll certainly be a lead participant in the discussion."

The draft report also sheds some light on another issue haunting PBOT: It's reliance on federal grant money for capital projects like the Portland Streetcar that wind up built away from stressed neighborhoods like East Portland.

"Unfortunately, the [streetcar] would not have been competitive in the federal process anywhere else in the city," says the report. "As the call for increased equity in city services grows, over-reliance on grant dollars can unintentionally result in a perception that PBOT does not invest equitably across the city."

That's something else for the new mayor to address.

Download your very own copy of the PBOT Draft Budget Memo, here.

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