Portland: Sam Adams and Taxes

By Dave Lister, The Eastside Guy
As featured in BrainstormNW magazine

It turns out my punditry was lousy. I was absolutely convinced that mayor Tom Potter, whose popularity remained at better than fifty percent despite his failure to bring forward most of his major initiatives, would walk into a second term. Even though most city hall observers agreed that he seemed less than enamored with his job, I was pretty sure he would enjoy four more years of doing battle with the federal authority and pursuing his goal of making Portland a sanctuary city for illegal aliens.

Whether it was the overwhelming rejection of his proposed “strong mayor” reform of Portland’s charter, former Chief Foxworth’s declared intent to sue the city on the basis of his sexual escapades with a subordinate being nothing out of the norm based on his predecessors, or the nagging undercurrent and innuendo of past improprieties that caused him to call it a day, I can’t say. But now that he has, the prospect of the 2008 elections being a shoe in for two entrenched, untouchable incumbents with the sideshow of a gaggle of smart-growthers forming up a rugby scrum for the open commission seat is leaving me gnashing my teeth.

Transportation Commissioner Adams, of course, is the mayor-apparent. After holding off until his only likely opponent, developer Bob Ball, committed political harakiri by spreading the story that Adams was having an inappropriate sexual relationship with an underage man, and then, when the story started to backfire, stated that he himself never really believed the rumors, Adams announced for mayor. In a spectacle resembling a Roman triumph, Adams supporters spilled into the street from his carefully chosen (and perfectly Portland) announcement venue, an organic brew pub.

Adams has never been shy about publicity and has done his best to stay in public view during his first term as commissioner. After being smacked down by his fellows on an early attempt to reform Portland’s onerous business tax, Adams regrouped and got council approval for a modified plan that left most of Portland’s business community smiling. He has since maintained a very high profile in a series of town hall presentations in which he has touted the need for additional taxes to deal with Portland’s street maintenance backlog, a backlog which he insists is growing at the rate of nine million a year. He’s kept his picture in the paper, his face on the television and his voice on the radio, even taking a regular grilling from Lars Larson.

“The most dangerous place to be in Portland is between Sam Adams and a microphone,” one local journalist recently joked to me.

Adams is now perfecting a proposal to ask Portlanders to increase their taxes in an effort to raise about 450 million for road repair and infrastructure improvements. He’s looking for a three cent per gallon local gas tax, and a street maintenance fee of about $4.50 per month to be tacked on to householder’s sewer bills. Businesses will likely be asked to pay a sliding scale maintenance fee, based on how many trips they generate.

Adams, of course, served as Portland mayor Vera Katz’s chief of staff for most of her twelve years in office. Considering that, it is remarkable that he was able to successfully campaign for a city council seat as a political outsider. Adams went out of his way to distance himself from Katz during his council run, but he may not be able to do so during his run for mayor. His transportation policies seem to mirror Katz’s anti-automobile agenda and his enthusiastic support of publicly funded development projects falls in lock step with Katz’s propensity for civic monuments, to wit, PGE park, the Esplanade, the Chinese gardens and the tram.

And in asking for additional taxes to solve the street maintenance backlog, Adams may run up against a very inconvenient truth, one in which he was undoubtedly complicit as the mayor’s chief of staff:

In 1988 the city council, under the leadership of Bud Clark, not only identified the pending maintenance backlog but also put in place a funding mechanism to address it; a mechanism which was ignored and overruled by the Katz administration.

The 1988 resolution identified the street maintenance backlog as being 476 miles requiring, at that time, 37 million to repair and repave. The ordinance called for a recommended allocation of 28% of the city’s utility franchise revenue stream to be dedicated to the problem.

If you don’t know, the city’s utility franchise fees are assessed to the power companies, the phone companies and the cable providers. The fee makes sense, in that these companies need to use the public right of way to provide their products and services to their customers. You might remember that Commissioner Leonard tried to include cellular services under the auspices of these fees a few years back, but the idea didn’t fly; he wasn’t able to successfully make the argument that the airwaves were a right of way requiring maintenance.

In any event, at the time of the council resolution, the city’s revenue from utility franchise fees was about 24 million. The 28% allocation made nearly seven million available for street maintenance. The total utility franchise revenue has grown dramatically over the years, hitting 36 million by 1996 and over 60 million in the last fiscal year. If the allocation had been adhered to it would be nearly 18 million, or about twice what Adams is seeking to raise in additional taxes.

As the revenue from the franchise fees grew, Clark’s council started to reallocate a portion of the 28% to other projects. Despite this, about 13 million went into street maintenance during his last four years in office.

Things changed rapidly when Vera Katz became mayor. Even though the franchise revenue hit 32 million during her first year in office, the allocation for street maintenance had been trimmed back to six percent. The next year, despite the fact the revenue continued to grow, her budget put the street maintenance allocation to zero. It has remained at zero ever since. In his quest for more transportation dollars, Adams has pretty much insisted that our shortage is due to the decreasing revenue from the state gasoline tax. I haven’t heard him discuss the inconvenient truth that the utility franchise revenue has tripled in twenty years but he has not advocated for renewing the transportation allocation.

Sam Adams wants to be our next mayor. I think it’s fair to ask him where all that money went and why we can’t return to the prudent budgeting that the council exhibited in 1988.

But what the heck do I know? I’m just an Eastside Guy.

By Dave Lister, The Eastside Guy
As featured in BrainstormNW magazine

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Posted by at 06:09 | Posted in Measure 37 | 13 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    Is there any truth to the rumors Sam Adams had a personal bankruptcy? The reason I ask is his public persona seems to be one of supporting significant expansion of debt to fund not so much basic infrastructure but for luxury goods like streetcar extensions requiring significant federal and state subsidies and a convention center hotel. If true, it would fit my impression of someone who likes spending to the hilt so as to endanger city finances and the local economy later.

    Portlanders should also be skeptical of the commissioner’s honesty. He tried to spin this street maintenance fee, tax, as something Portlanders would not want to vote on but have the council just enact. He’s went as far as to split the fee into multiple ordinances to make it very difficult for citizens to petition, the Willamette Weekly reporting on this political manuever.

    Granted the fee isn’t that much but consider we just saw our property taxes increase by over 10% this past November, and other proposals are on the horizon to fund the Sellwood bridge, school building renovation, and Portland Community College. PDX city government just needs to get leaner with the rest of us. Unfortunately, I’m not sure any of the candidates for mayor are strong on fiscal responsibility.

  • Dave Lister

    Bob,
    My understanding is that Sam Adams did have a personal bankruptcy some time back, but that he repaid his creditors eventually despite the bankruptcy.
    Dave

  • CRAWDUDE

    I have to disagree with Bob Clark on his statement that the “fee isn’t much”. It’s $5 a month for a total of $10 per billing cycle, which will be on top of one of the highest Water and Sewer rates in the country. That fee would constitute a 15-20% raise in my bill alone which already includes higher rates for Vera Katz pet projects, I feel it is a very significant increase.

    I make more than most people so it wouldn’t effect me like it would a 4 person family that makes the same as I, has the same bills etc….there are many families out there that scarcly have $10 left over to waste on a bad street bill. Sams plan fixes nothing really, some of those intersections are fine, we don’t need more bike lanes or sidewalks at this time. Our priority should be repairing delaptidated streets and paving unpaved ones, period!

    Dave, you stated that he is crafting a plan to “ask” Portlanders for this increase? Have you heard something? Is he going to put it to a vote city wide? I would love to hear this is true.

    Last I heard he isn’t asking Portland , he’s asking 4 bobbleheaded yes boys, 2 of which are leaving after this term.

    Also, let me encourage everyone to e-mail the commissioners and mayor and ask them to vote No on Sams proposal. Tell them they need to refer it to the people in the form of a levy or tax increase, this has no place on a Water and Sewer bill!

  • Bob Clark

    Boy, I’m glad if commissioner Adams is going to allow for a public vote. The last poll in the Business Journal I saw had it going down 51% to 42% (8% undecided). What was interesting is a lobbyist for the Oregon Petroleum Association has been the chief opponent to this street fee with other small business groups sort of divided. Politics makes for strange bed fellows. Citizens opposed and a petroleum group may have made a difference? Without the lobby group’s money and wherewithal to fight cityhall, I doubt the citizens opposed would have been able to organize a petition drive.

    Well, will see.

  • Dave Lister

    Sorry to have caused confusion. This piece appeared in Brainstorm back in November when:

    a) There was a gas tax element

    b) Adams was planning on a public vote

    Right now, there is no gas tax element, and there is no plan for a public vote. Only a vote of the city council (and it is said that the three votes are there to pass it).

    I got some numbers on the impact on businesses.

    8 pump gas station…. $1368.00 per year

    Small convenience store… $1740.00 per year

    15,000 ft specialty grocery store…. $5040.00 per year

    These figures are from Adam’s office, given to me in a phone conversation last night.

    My best suggestion is that you e mail the mayor and city council members protesting the enactment of this without a vote.

    [email protected]
    [email protected]
    [email protected]
    [email protected]
    [email protected]

    In your e mail you might suggest that the members of the council review the current allocations of the utility franchise fee revenue before proceeding to a vote on the street maintenance fee.

    • CRAWDUDE

      I’ve heard people accuse Portland of being anti-business , I guess this proves it.

      Thanks for the clarification on the voting, I believe a group is looking into an initiative if the council passes it.

      I have no problem paying the extra as long as it is the will of the majority of voters. I’m always shocked when liberals who claim to be for personal freedom stifle them. I would think that the pols. in this town would embrace a public vote.

  • Bob Clark

    Boy, this is a heavy impact for neighborhood grocery stores. I help a Korean family running a neighborhood grocery with financial paperwork sometimes, and this would hurt them significantly. These entrepreneur folks work 12 hour days, nearly 365 days a week, and $1740 is roughly equal to one month’s store rent.

    I already presented testimony to the Council asking for a public vote, but now that I have these figures for the small grocer, I’ll e-mail as well. Thanks, Dave!

  • Sam Adams

    Hi Dave,

    Thanks for focusing on the Safe, Sound and Green Initiative in your blog posting. And thanks for giving me a chance to present my point of view.

    Mayor Bud Clark was right about the policy he helped pass that dedicated a percentage of the utility franchise fee to transportation. What happened to that policy? State ballot measure 5 for one thing. As a result, Mayor Vera Katz faced having to make ongoing budget cuts from current service levels in the general fund budgets of the City.

    Vera is best suited to describe the choices she made as Mayor. But, since I was their I can tell you she had a difficult situation to deal with. Crime and gang violence was out of control, the schools were facing massive cuts and other general fund budgets like the Bureau of Fire were facing deep cuts.

    A quick correction to your statement that I am seeking a, “He’s looking for a three cent per gallon local gas tax…” At the request of state leaders, I am not seeking a local gas tax increase; I want the State Legislature to take action in the 2009 session.

    I had to scratch my head when I read your description of my work in transportation as an, “…anti-automobile agenda…” My approach to transportation policy is balanced. For example, I am the first Portland transportation commissioner in a decade to ‘greenlight’ a freeway lane expansion within the City. And the bulk of the money in Safe, Sound and Green Street Initiative focuses on the busiest streets used by autos, freight and buses. The vast majority of PDOT’s budget goes to automobile projects. However, given that US households on average spend more on transportation-relate costs than food, I am trying to give Portlanders more cheaper alterative for getting around.

    Regarding your statement, “I haven’t heard [Sam] discuss the inconvenient truth that the utility franchise revenue has tripled in twenty years but he has not advocated for renewing the transportation allocation.” Actually, two years ago, I am the one who raised it to the public and City Council as part of my effort to successfully obtain $11 million in one-time funding from the City Council to improve safety at Portland’s 20 most dangerous intersections – most in East Portland. I also unsuccessfully raised it as part of the initial conversations of the Safe, Sound and Green Street Initiative.

    Regarding your request to send the Safe, Sound and Green Street Initiative to a vote: we will have to disagree. It is ironic that some asked that I refer the reduction in the business license fee your write approvingly of that I helped push through the City Council last year.

    The 19 communities in Oregon that have a similar fee did so by enactment. Our outreach process on this issue was one of the most extensive in Portland history. We conducted public opinion polling to make sure we are responsive to Portlander’s wishes on this issue. Both the Portland Tribune and Oregonian looked at the issue and recommended enactment. It is a question of leadership.

    Portlanders elected me to address the problems plaguing our city. This is a serious problem that needs to be addressed now.

    Dave, whether we agree or disagree on each issue, I always like reading what you write and listening to you on the radio. Thanks again for the opportunity to present my point of view. See you on the eastside.

    Sam

    • CRAWDUDE

      Sam, if you are so confident that the Portlanders elected you to address these problems, why are you so afraid to let us vote on your solution to one?

      Let the people vote! Its call democracy, do you not like that form of government.

      Why are you dedicating street repair to bike paths when SE has so many unpaved strets to take care of first? Do you not remember that we in southeast, since you were one of the few to campaign out here, were the ones that gave you the votes over Nick Fish?

      Where have you been bud? I see money being spent downtown, abatements being given downtown, free transit downown, and the malority of your road repair package areas and your new pedestrian bridge can be seen from the mayors office……………..the East is left holding the bag with very little in it.

      Why does the majority of PDC money get spent downtown lining developers pockets? Why does Erik Sten get to negotiate with developers on affordable housing downtown………using our tax money to do it?

      East County helped put you where you are an you stuck a stick in our eye. I doubt you get the same help next time, no matter how many “I’m Sam” signs you stand under.

      Fool us once, shame on you, fool us twice shame on us!

      • Sam Adams

        Crawdude,

        Take a look at my record: I voted against the South Waterfront tax abatement proposal. I have the support of small business leaders in SE Portland because I have fought for them to reduce business taxes and increase transportation investments on the eastside. The bulk of the Safe, Sound and Green Street Initiative is outside downtown Portland. That is why most business associations have endorsed the Safe, Sound and Green Street Initiative. The pedestrian bridge is completely funded by federal dollars secured by Rep. Hooley — I guess we could have said, “no thanks,” and another city use that money but that makes no sense.

        Sam

        • CRAWDUDE

          Its election season, why not put out a proposal to get rid of the tax abatement to fund say, road repair. Surely the other commisioners would have to agree that having people actually pay property taxes for $500,000 plus homes is a worthwhile endeavor.

          Maybe a proposal to redirect the 18million a year Bud Clark had ear marked for road repair would be a gesture to the populace that your not trying to fleece us with your current proposal.

          Sam, as you stated , Vera Katz redirected that money to items she felt were of higher priority thus giving us the road repair issue this many years later. What is going to keep you or your fellow commisioners from doing the same thing with this approximitly 500 million? I don’t see anything in your proposal locking this money into road repair use only.

          You guys are out of cash for your pet projects, this is a feebly disguised attempt to get more. You can’t extend the life of the various levies any further than you have, you’re tapped!

          If you really think this is such a great idea and people will support it, let us vote on it. If its a good idea the people will listen to you and support your plan, if its a farce they will vote it down. Why are you so opposed to letting us decide what to do with our money?

          By the way Sam, when you cut business taxes and increase fees, it becomes a wash on the savings for businesses. The fee increase can’t be deducted like the taxes can so it actually transforms into a loss.

          Nothing personal Sam but I think you might be getting some face time from your business pals over here. Your popularity seems to have plunged from what I’m told by my business friends. Believe me, you were somebody they hung their hats on when you ran for commisioner……………………you might want to figure out a way to pry some of those hundreds of millions Sten is negotiating with for the downtown developers and figure out how to spead some sunshine to the neighborhoods past 82nd.

          In their entirety are the pathways and bikes paths leading up to the Ped. Bridge federally funded too? or is the spend 3 dollars to get 1 kind plan ?

    • Tom

      What a bunch of hogwash Sam can write.

  • Joey Link

    We need Dave to run for one of these open seats; I’d love to volunteer.

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