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Monday, January 30, 2006

Yes on the Portland income tax

I support the proposed new Portland schools tax -- a 0.95 income tax to be imposed on residents of the city, with all the funds dedicated to the public schools. I'm not looking forward to writing that check, but on the whole, I think it's the right thing to do.

Education is crucial to the success of our city and metropolitan area, and without these tax funds, the school districts would take a major budget cut, leading the public schools further down the slippery slope to which they have been clinging for a decade or more. I'm happy that Mayor Potter has taken the initiative on this -- he's a much more palatable champion of the schools than his predecessor, or the strange folks who are running the county these days.

I have already heard many negatives being circulated about the tax plan, which was unveiled on Thursday. Some of the criticisms are valid, at least up to a point. But political pragmatist that I am, I think we need to take the lesser of two evils when it's available.

Is there too much administrative overhead in the public school budgets? Sure. Are there some lackluster teachers whose hides are being covered by an aggressive union? Probably. Is government wasting money on other, less important priorities? Definitely. Might there be inequities between the Portland district and the outlying school districts under the plan? I really can't tell from what I've read so far, but let's assume for the sake of argument that it's possible. Is all the talk about dedicating the tax to classroom-related expenses a bunch of budgetary smoke and mirrors? Yep.

So what? Without this money, regardless of whether it's theoretically possible to run an adequate education system, it's a 100 percent certainty that there won't be one. Starving the beast for money isn't going to turn it into a beauty.

Some of the other objections that have emerged sound like baloney. Larsie keeps harping on the fact that the tax wil be imposed only on city residents, and not on commuters (like him) who work in town but live elsewhere. Yes, and...? I assume that's because those who live elsewhere send their kids to school elsewhere.

Then there's the fact that state government pensioners won't pay the tax. I assume that's because state law forbids it. Not Mayor Potter's doing.

And the geniuses at The O keep nattering on about how we should vote on a property tax levy instead. Excuse me, people, but there's this thing called the double majority law, and the risk of not getting a 50 percent turnout for a May primary is too high to chance it. For now, the city income tax is the best we can do. (Heck, four years from now, when the new city tax would expire, there might be a double majority requirement in place for renewing it. I have no doubt some of our fervent anti-tax brethren have drafted up a petition on the subject, or they will soon.)

With this tax, others complain, Portland is seceding from the rest of Oregon financially. It's about darn time, if you ask me.

We'll be hearing a lot that the county income tax that just expired was supposed to be temporary. It was -- just a stopgap measure until the Legislature gets its act together. The schedule on that has been pushed back to shortly after the Winter Olympics in Hell in the year 2525.

We just got a fairly good-sized property tax reduction, in part because an older school levy ran out, and we ought to funnel those dollars back where they can do the most good. The city income tax won't be perfect. Far from it. But I'll be voting for it.

Comments (91)

Just curious... I remember hearing about how the MultCo ITax was going to be taken into account when the state sent funds to those districts... i.e., the local extra funding of schools would result in commensurate decreases in state funding to "level the playing field".

Did that actually happen? And if so, wouldn't this tax be subject to the same issue?

And if that didn't happen, why not? I thought the state funding was essentially a "safety net" to make up for deficient funding on a case-by-case basis. So if a given district is less deficient, it should receive fewer state dollars, right?

I'm not trying to pick a fight about whether schools are funded adequately (I don't think they are)... but rather I just want to understand the mechanics of the state funding system.

FYI- Mayor Potter will be at Buckman Elementary School (SE 16th & Pine) tonight from 6-8PM for a Public Safety Forum.

As a parent with three kids in PPS, I thank you, Professor.

I regularly read your blog and never get up the courage to write. This time, I must.

Jack, thank you.

I was born and raised in Portland and am the recipient of a PPS education of the 1970s.

What really gets me is that there were adults before me who had the foresight to think bigger than themselves and do what was right for future generations. I benefitted from their thoughtfulness. Now, I see my generation living an "I got mine, screw the rest of you" lifestyle, and it makes me very, very sad.

We have a responsibility to the next generation, and I am glad that you and the Mayor recognize that. Now, I wish a few more of our leaders (elected and otherwise) would.

Lars has a point... there are MANY people living in the county but not the city, whose kids go to PPS... and there are people living in the city whose kids go to Parkrose, Centennial, Reynolds, etc. -- and nobody yet is satisfied how the money from those people will be distributed... it's a mess right now -- and nobody is even sure if this is ENOUGH money for them...

I was talking to a friend recently who brought up the idea that the Boomers are inheriting a huge sum in this decade from their more frugal parents. He said while the Greatest Generation scrimped and saved, their kids are much more likely to spend it on the good life. Now, you throw in the 400 billion of debt we’re placing on future generations from 2006 alone, and this generation is starting to seem a little bit irresponsible with money. The least we can do is shell for the next generation’s education so they have the smarts to find their way out of the mess we’re leaving them.

As someone that currently has no children in PPS, but one day will, my biggest concern about renewing these local taxes (and yes, I view this as a renewal even though a different entity will be collecting the tax - but that's another story) is that doing so bails out the legislature from making the tough decisions and funding the right programs. As Jack said - there are programs getting funded from the state level that are less meritorious than schooling. And everytime we, as citizens, increase our bandage funding to make up the difference, we allow legislators leeway to fund their own baby projects to the detriment of the more major programs - and they know the major ones will get funded locally. What's going to happen in the 2009 legislature when budgets get discussed, and those in control get shown that in the last 7 years, Portland has contributed $700 million plus dollars to the school districts? Their going to avoid cutting funding to replace tharevenue that should expire in 2010 - forcing us to ante up again when this "temporary" tax expires. Why would they EVER make up for the lost funding, thereby ending our tax - especially during the four year period?

I'm all for public education, and am undecided on this specific issue. I think the cons of supporting it may have merit. The only question is the weight of those positions.

I don't have children in PPS, although I hope to have children soon. Where they will eventually attend school is another matter.

As a general taxpayer the thing that irritates me the most is the constant cries for money, and the inevitable threats of social collapse if you don't vote "yes". If I thought for one second that if I voted for this new tax I would have even a two year respite from never-ending complaints, threats, and begging, I would vote in yes a heartbeat, even if the rate were much, much higher. All I ask is that someone figure out how much is needed, we can vote that in, guarantee it is actually used for the purpose we voted it in for, then please, please, give us a few precious moments when some advocate isn't claiming we're underfunding the system and we absolutely must pass the "newest" "latest" emergency tax.


I'm dubious. Largely because I don't know the mechanics of this, either.

I think an income tax of Portland residents is a positive idea, but there are better. What has happened with the property tax limitation is that we burden wealth with less of the demands for the upkeep of the infrastructure and burden income earners for it. This let's off corporate, business and large property owners off the hook, while shifting the tax burden to the middle class and the working class. What strikes me in the whole shift is that the businesses bitch more about the poor product of the public schools than anyone else and they get the cheap tickets. That sucks.

Then there is the question of equity. Does the taxing district match the service district? Here, as already noted, the City of Portland overlaps several school districts. I certainly trust that Parkrose, David Douglas and Centennial school districts get something if the households in that area are taxed; or conversely, Portland taxpayers don't pay for schools where the tax is not collected. I'd like to know how this would be handled.

I think the state response in terms of equalization also need to be clarified.

I like the idea that the tax will be sunset, too, allowing it to be reviewed and renewed, or junked, as a revenue collection mechanism. I'd also like to see a clear priority list as to how this additional revenue will be spent...._before_ I vote for it.

I wonder too is there a citizen watchdog process included?

Lastly, I wonder why it is that the City is involving itself in the functioning of an entirely separate political entity, School District #1? I thought we, as citizens of Oregon, has effectively handed over to the state legislature our school funding decision ([sarcasm]and what a wise and wonderful public decision was _that_[/sarcasm]).

We used to have local control of our schools in this state, but it seems to me that in the greedy, grasping desire to pay less to our local governments (thereby being able to impress other idiots with our cellphones and SUVs we buy with our tax savings), we handed over control of our school districts to the state. How about we take them back, before we start chunkin' our loose change into the "school tax" coffee can?

The history of the short-sightedness of the Oregon voter is not impressive, nor encouraging.

Bronson, unfortunately we live in a time when neither government nor the anti-government forces will declare a truce for even a moment. It's a two-way dysfunctional street.

Government is on the defensive, as much as the offensive, these days. Look what is happening in the federal government. They're not fighting about new taxes -- they're gutting the old, and stealing from our kids in the process.

I'm tired of it all too, but it's not just the tax-and-spend crowd that's creating the poisonous atmosphere.

Another reason why I love living in Portland: it makes me feel like the ultimate anti-tax conservative.

I guess I fall into the "I got mine, screw the rest of you" camp. I'm in my 20s, grew up here, live on a relatively tight income and am tired of being nickel and dimed to death by shockingly high sewer bills, "temporary" taxes, etc. With each passing day it seems to get harder and harder for someone in my situation to afford to live in Portland. Losing .95 from a paycheck may not seem like much but it does hurt those of us on the lowest rungs of the tax ladder.

The three year tax was supposed to be a temporary measure to get the schools through some troubled times. From what I know, it did little to increase the number of days in the school year or improve things in local classrooms.

If this new proposal flies, as Jack points out, how much of this cash will inevitably wind up in the pockets of admins? I'm voting "no." It's time for Portland to live within its means. If this city has cash to extend the streetcar line, drop massive revenue on the OHSU tram and cut taxes for condo developments, it has plenty of $ for the kids.

If this city has cash to extend the streetcar line, drop massive revenue on the OHSU tram and cut taxes for condo developments, it has plenty of $ for the kids.

Although I hope the tax passes, I also hope our city commissioners will turn up their hearing aids for that message -- or that it comes across too loudly for them to miss.


Income taxes fluctuate with the economy. When the local economy is down, collections fall also. And, it's a bigger imposition upon the taxpayers. (Consumption taxes - sales taxes - are the same in terms of the response to economic activity or inactivity, but fall harder on the lowest income levels.)

Wealth, however, doesn't really fluctuate with the economy (it does, minimally, but can also act as a reserve or even refuge for the owners of wealth in an economic downturn). The biggest form of wealth our society is property. Property tax is a tax on wealth, not income. Income tax is a tax on earnings, not wealth.

We have, over the past 30 years, shifted our tax base such that relatively more of it comes from the property owner to the income earner. I think that needs to change. To back closer to how it was in 1970.

I agree with "B". I'm voting no only because it's high time that the city, county and state prioritize their expenditures. Schools always become the poster children (no pun intended) for tax hikes because they are the most personal to people. You're an ogre if you say no to "the kids" and "the future of this state".

The mayor would get my support if he said, "Funding education is our number one priority. Once that is covered, we will look at allocating the rest of the budget. If the arts, libraries and public safety are jeopardized, so be it."

Unfortunately - for the taxpayers - they realize that begging for tax dollars for sewer systems, jail beds and dog parks would never work.

Give me five dollars or I'll kill this puppy.
Give me 0.95% or your children will go uneducated.
Same thing, different levels of tact.

Before we praise Potter's leadership too much, let's remember that he's had over a year to address this known problem while he's been "visioning." Also consider...

Potter's .95% tax to get $67 million for schools is equal to:

> A 23% cut or postponement of capital upgrades for the city in '05-06.

> A 5% across the board cut for operating expenses.

> A nice chunk of which the police and firefighter pension/disability robs the general fund each year

This is a quick fix that doesn't address any of the fundamental problems. And how much will the beaurocracy required to administer this tax cost?

Until we finally say NO to more taxes, nobody is going to try to fix the problems in the system. And that's sad. But, as long as we keep throwing more money at the school district, it will be business as usual.

I am the product of public schools and a state university education. I support public education. I will put my kids in public schools (likely not Portland at this point, for obvious reasons). However, the mess must be fixed, the beast must be tamed, and the city, PPS and the county need to face facts: The financial systems in place cannot be sustained. Another tax just delays the unavoidable crash when the sky REALLY does fall down.

We need to put pressure on the yahoos who are running things. Just as we say NO to more taxes, they need to say NO to developers, NO to OHSU and their amusement park ride, NO to the unions and the out of hand benefits that those us us in the real world do not get because it is not sustainable, and NO to the continuation of PERS as it stands, just to name a few. And Jack, although it's not Potters fault that PERS retirees don't pay state or local income taxes, he should be the guy standing up and pointing out that this "lost" tax money is hurting the schools and our local government services.

Fix the mess and I will be standing in line with my tax check, happily knowing that my money is going to the kids and a quality education. That is not happening now.

Godfrey makes a good point, I think, about the problems of relying mainly on the income tax as a source of state revenue. But the property tax has problems of its own--as demonstrated by the Measure 5 property tax rebellion of the early 1990s that permanently limited property tax rates, regardless of real property values. Property taxation may be a good way of collecting money from those with tremendous wealth, but it's a potentially very burdensome tax on middle-income or fixed-income people whose only property asset is the house in which they live. If a person's income drops, he still has to make his mortgage payment. And as we see in Portland, incomes haven't come close in general to keeping pace with the rise in property values. Most people I know who bought a house 10 or 15 years ago would be extremely hard-pressed to pay property taxes on the current real market (versus measure-5-limited) value of their homes.

It seems like the fairest tax system would be one that collects revenue from a variety of sources and aims to interfere as little as possible with individuals' ability to meet their basic life needs. So we should have: a property tax, but one that is graduated and falls more heavily on properties other than primary residences; an income tax, but one that leaves the subsistence portion of a person's income largely untouched; and a sales tax, but one that doesn't tax food and medical care, but does tax other services (e.g., lawyers, accountants, massage therapists, personal trainers).

I suppose a sales tax, in particular, will never, ever get anywhere here. But in my view, Oregon residents' opposition to that tax is self-defeating, given this state's appeal to tourists and marijuana growers, neither of whom now contribute much to the state's coffers.

So yes, I too wish the tax system were different from what it is, and I wish some of the state's and city's priorities were different. But this is a state with a population of close to 4 million people, so compromise is inevitable if we're all going to mesh our priorities and views and somehow live together. I'm going to vote "yes" on the city's school-funding measure because good public education is vital and the schools need the money.


(I just called around five minutes ago)

ERIK STEN (spokesman, after evading the question): "To be perfectly candid with you, Erik was standing right there by the mayor when he (announced the tax). Erik wants to craft something that voters will approve." That must be a yes.

DAN SALTZMAN: three attempts and NOBODY answered the phone, not even a machine

RANDY LEONARD (spokesman): "No, not as currently written."

SAM ADAMS (receptionist): "Oh, I don't know. Can you hold?" (tick, tock, tick, tock) "Let me transfer you to someone who can answer that." (straight to voice mail)

Your tax dollars at work, folks.

Vern: I loved your puppy example. It made me think how different stereotypes might react:

A socialist would beg $10 from the public: he'd give you $5 and keep $5 for himself.

A liberal would happily dig into his pocket, and give you $5. Then he'd tell all his friends he gave you $5, so the puppy would have a better life.

A moderate would give you $5: asking you for proof that you don't harm the puppy.

A neocon would kill you, save the puppy, and then wonder why that damned dog keeps following him around everywhere.

It's not my puppy.

I think the most important point is this:

Currently, the City of Portland has no charter authority to tax incomes. That is why they call the business license tax a "fee". I am not in favor of giving the city the authority to start taxing incomes because I do not believe it will stop at schools.

The city's all funds budget is about 2.3 billion. Whenever we question their budgeting priorities we are told that certain "colors" of money cannot be used for other purposes because of charter restrictions. 600 million or so of this colored money is one bureau billing another bureau for services, known as inter-agency billing.

If the city wants to amend the charter to give it taxing authority to help the schools, I believe it could also amend the charter to allow "orange" money to be used for "blue" purposes.

I was testifying before council on a computer equipment acquisition when the IT guys fessed up that they had 4 million in a reserve account. Randy Leonard was shocked. "I wonder how many more of those there are?" he speculated.
I wonder too.

In short, I think the city could provide the needed funds for a school bailout without raising anyones taxes by wringing the dollars out of their inter-agency budgets.

We could also go into urban renewal and tax abatements while we're discussing it.

A number of you have now advocated the "Say No to Taxes to Teach the Government a Lesson" approach.

The principal problem with this terribly misguided form of political expression is that—at the risk of sounding like a bleeding heart liberal—it ignores the effect on the children. “Saying No” to a host of other tax and spending issues, such as requiring penniless counties to pay for Measure 37 claims, or tax breaks for individuals and corporations alike, doesn’t have a permanent long-term effect on the burdened the same way that “Saying No” to funding education will have on children.

Higher taxes are rough on everybody, but paying an extra few hundred dollars this year won’t dictate what you can or can’t do with your life twenty years from now. In contrast, most kids only get one shot at 8th, 9th, 10th grade, etc. If we don’t pass this tax, instead waiting for the legislature to “get the picture” sometime in the next decade and pick up the slack, the quality of education will decline, along with every student’s future potential.

Those voters willing to piously suffer until increased state funding comes through will be little affected by the decline in Portland’s schools, but the kids that attend those schools in the coming years will never get another chance to be educated during their formative years. Those of you willing to vote no for some higher ideological purpose should consider the sacrifice you are asking of the children that attend Portland’s public schools.

Andy writes: "Those voters willing to piously suffer until increased state funding comes through will be little affected by the decline in Portland’s schools, but the kids that attend those schools in the coming years will never get another chance to be educated during their formative years. Those of you willing to vote no for some higher ideological purpose should consider the sacrifice you are asking of the children that attend Portland’s public schools."

So, are you advocating for school choice? Sounds like it would work in this example. Let people choose what, where and how their kids are educated, just like we choose to buy a (bankrupt) GM or Ford, or if we go with a longer lasting Toyota.

I say give parents & kids a real choice, and you will be amazed at how much better both the bad and good schools will become. Just like Ford don't make any more Pintos no more. If they did, Ford would be outta business, run over by Toyota. Choice works. Choose your Schools.


Our children are already getting screwed. America's public schools spend more per student than pretty much any other industrialized nation... with worse results. Just how is tossing more money into a failed system "good for the children?"

If you (or Tom Potter) really want to help kids, you should organize against the teachers unions. They're the ones mainly responsible for the plight of our public education. They've worked to stifled proposals regarding competition, performance standards, charter schools, vouchers and home schooling -- pretty much everything that would improve the situation.

It's time for major school reform. It's time for the teacher's unions to have their wings clipped.

I think I have to disagree with Mr. Bog on this one. Here are my reasons, with a more detail explanation at garagewine.blogspot.com.

* Portland Public Schools already have a method by which to raise money. It is called a "local option" property tax. I know BoJack disagrees with me on this. You say tomato, I say tomahto.

* Portland's teachers union did not make any good faith effort to reduce Portland Public School high and growing health insurance costs.

* There is no such thing as "dollars in the classroom." Extra dollars in the classroom means extra dollars of teacher salaries and benefits.

* The tax is not small--0.95 percent is a huge amount of money. I don't care how many latte's it is, I drink black drip coffee that I make at home.

* A city income tax would require a change to Portland's Charter. There is a 99 percent probability that the text of the charter amendment will enable this and future city income taxes.

* A Portland city income tax is a sure way to ensure that the Oregon Legislature will not provide more school funding.

* Ted Ferrioli.


What would Maude Flanders say?

Does anyone know what the student - teacher ratio is now and what it would be if the tax failed and they had to cut?


Jack Shafer writes (in Slate):
"When Koppel laments the fact that cable, satellite, and broadband have "overcrowded" the marketplace, making it "increasingly vulnerable to the dictatorship of the demographic"—that is, readers and viewers deciding what they want to consume rather than what the three broadcast networks think they should—he sounds like any other monopolist complaining about how the arrival of competition has dragged down quality."

Read the whole thing in slate:

Sounds just like the Teachers Union. Competition is always evil!

Wow... What a great thread.

Thanks, Richard. First, I'd like to point out that we already have sales taxes in Oregon, just not a general sales tax. We have sales taxes on alcohol, tobacco, stupidity, and lodging. A general sales tax is, as already noted, an invitation to a higher sales tax later...or, a reduction in the number of exempt items as they are added back in at some indefinite point in the future. They are inherently regressive.

Then, there's the issue of the increase in valuation pushing taxes too high. Under Oregon's old tax structure, if your property increased 10% per annum over a stretch of time, it would still only realize a maximum of 3% increase in the tax rate over the entire taxing district. Under that system, if a big property owner improved a high value piece of property (and didn't get any tax subsidies or forgiveness) then it's quite possible one's tax payment might actually go DOWN. We did away with that in 1990. None the less, the increasing taxes, fuelled by inflation on property values, proved to be a real problem for fixed income individuals. There is an answer, and that is a "homestead exemption", where one's primary residence is exempt from some or all of the basic property tax.

Weishapt: I don't support any more deferred maintenance of city capital as an answer. Our city infrastructure is being depleted as it is, through poor vision and planning on the park of city bureaucrats chasing expensive dreams and "signature" projects. We need to stop blowing wads on crap that somebody can stick their name on and start paying attention to the stuff we already have. Our parks are eroding and we're buying more new expensive park space that we won't be able to adequately take care of? Our streets, city buildings, water system, fire infrastructure, police fleet and facilities are also being eroded. That doesn't sound like a reasonable approach to city financing to me at all.

I do agree that a reform of the fire and police pension system is long overdue.

I love Vern's example, too. Around here, it's parks, libraries or kids. The sacred cows of Portland politics. "Stand back, or I'll shoot this poor, defenseless library!"

Last of all, Jack's quotation needs to be artistically rendered, posted here with instructions to reprint and post all over the city.

"If the City of Portland has the money for the Tram *rimshot*...it has money for kids."

Did anyone read today's very fair coverage of the schools battle today in the O? I was really quite impressed with the balance and the facts presented, many of which I either did not know or had not considered. The "failure" of the legislature was one. They apparently increased the schools budget by 7%, and in order to replace PPS's I-tax money, would have had to allocate $1 billion more dollars to the schools. That's a chunk. So it's apparently not fair for the mayor to be saying the legislature failed us, a refrain I hear often and am always tempted to repeat.

It also made mention of the efforts to curb spending on health care costs which, although not declining, have been slowed in growth. I think it's apparent (at least to me) that two things are required - first is PERS reform. The State Supreme Court made that one tricky, but it must be worked on. The system is simply unsustainable.

The second as I see it is to make all the PPS schools charter schools, heading each with a strong principal (and schools like Jeff and Benson should get the pick of the litter) and allow those principals to run their schools as they see fit. Pay good teachers more, much more. Fire bad ones. Fast. Quit teaching to the test and foster an environment of curiosity, creativity, and community. Let any student in the district go to any school in the district. Let the dollars flow with those kids. Most people will send their kids to the neighborhood school unless it's awful anyway, so there shouldn't be too much shuffling.

Let the school board monitor the success of the principals and pay them or fire them accordingly.

That's my idea of a new way of doing business. Thoughts?

Don sez: "make all the PPS schools charter schools, heading each with a strong principal (and schools like Jeff and Benson should get the pick of the litter) and allow those principals to run their schools as they see fit. Pay good teachers more, much more. Fire bad ones. Fast. Quit teaching to the test and foster an environment of curiosity, creativity, and community. Let any student in the district go to any school in the district. Let the dollars flow with those kids. Most people will send their kids to the neighborhood school unless it's awful anyway, so there shouldn't be too much shuffling.

Let the school board monitor the success of the principals and pay them or fire them accordingly."

It sounds good, Don, but I don't know how workable it is. There are a lot of existing contracts which could hinder such an approach, and contracts in our society are sacrosanct.

I'm a former teacher, so I'm pretty sympathetic to the classroom teacher. The union contract is a huge protection from abuse, but I recognize that there are those "bad teachers" (recognizing that this can be a highly contentious judgment)who are protected as well. I think finding alternate employment within the system, so that burned out teachers aren't just turned out to pasture with a bad, short-shrifted retirement fund. Taking these people and creating community service projects with unemployed and voluteer adolescents and young adults...to teach living skills and imbue pride in accomplishment would be good.

There are ways, but I'm not quite sure why making each school a "charter school" makes a particular difference, if the district is still selecting the administration and the adminstration of each school sets the tone for that school. We could do that without making every school a "charter school". Maybe I don't understand your distinction.

By the way, there have been, and still are, some truly heads-up principals and vice principals in Portland schools. Sadly, many have been lured away to places where funding and advancement are more secure and there isn't a crisis every six months over whether someone's assign school will still exist the following year.

I think one thing we could really do to help schools, school districts, students, teachers, administrators, and taxpayers a whole lotta good would be to get the federal government out of education entirely. We should not be funnelling money to Washington so we can get back a small portion of it to do what they tell us we have to.... That whole loop is unnecessary.

Income taxes do nothing for the increasing retirement community that is cashing out from high California real estate values and moving here for an early retirement. Portland (particularly the Pearl District) is turning into an affluent retiree's paradise. I could retire right now and problem solved! Maybe I should. Won't help employment any...

Let us not forget that the housing bubble will, eventually, deflate. There goes the increasing property tax revenue the City relies on. The federal budget deficity will, eventually, raise interest rates and result in stagnate wages and hiring (whether or not military intervention keeps the US dollar on the "black gold" standard).

This is a band-aid tax from a failed Police Chief who has sought to save his legacy as mayor by implementing another quick fix that he won't be around to answer for when he's collecting the lucrative police pension he's protecting now.

Jack, Jack, Jack... There are states that have their shit together, like North Dakota, that don't have this kind of crap in their state legislatures. Maybe we should demand a higher standard here in Oregon?

The Legislature here has been terminally messed up for the better part of two decades now. There is no hope for improvement -- none. Let's not wreck a half-generation's worth of kids waiting for The Impossible Dream to come true.


Making every school a charter school frees PPS (or DDSD, or Parkrose SD, for that matter) to hire not just certified teachers, but any good teacher who's not been sanctified by the state. There was an excellent Commentary by Cascade Policy about how Einstein, Toni Morrison, and Thara Memory can't teach in our public schools because of the licensing requirements (long, expensive, and worthless).

Letting the kids flow to wherever they want creates competition for kids and good teachers.

I am SO with you on dismantling the US Dept. of Education. Which, of course, means I hate kids.

I understand about contracts. I get it. I don't know what those contracts are, but let's whip 'em out and see how long they are. What can be done? Certainly we can figure a way around this. Can't we just ask the creative class?

School choice is the only long-term solution that will return us to the quality schools we had as kids. Whether we have the political courage to do that is another question. But for now, let's do SOMEthing other than just forking over more cash.

There will NEVER be enough cash. Ever. There will ALWAYS be some multi-million dollar need. "Need" always outstrips cashflow. It's why it's so hard to live on a budget. Too many of us, myself included, fall to the temptation of spending more than we earn from time to time. There's always stuff to spend money on.

"* Portland's teachers union did not make any good faith effort to reduce Portland Public School high and growing health insurance costs."

Is there some other way they could have cut these costs besides reducing health benefits? Doubt it. Don't blame the teachers for the actions of the scumbag insurance companies.

Nothing, but nothing will fix the school finance situation in Portland until local control of school budgets is reinstated. Rural Oregon isn't about to willingly give up the cash cow that is Portland taxpayers.

That sucking sound you hear is tax dollars leaving the city to other school tax districts. Until that stops, why would I want to keep adding money to a broken system?

School choice already exists in Portland. Every year, PPS has a school fair that allows parents to learn about every school in the district so they can CHOOSE which one to send their children to (subject to a lottery). Over 35% of all PPS students attend schools other than their neighborhood school.

However, there is a strong argument to be made that school choice hurts neighborhood schools, not to mention the sense of community that comes with neighboring children attending the same school.

Most PPS schools are not nearly as bad as the media and the right would have us believe. The issue is that as funds become more and more scarce, each individual school is making choices about whether to increase class size or cut electives or "specials", ie Music, PE, Art, etc.

I have two children in elementary school. I am a very involved parent who serves on the site council at my children's school. I know the real impacts of budget cuts. Every year tough decisions have to be made. I know that some schools have entirely eliminated PE and music to keep class sizes below 30. Our school has been fortunate, partly due to the fact that we receive Title I money due to a large percentage of children living in poverty.

The double hit that PPS will take from expiration of the local option AND the I-Tax would be devastating - it is not a scare tactic. If your goal is the elimination of public education, by all means, vote against Potter's tax proposal. Eventually, Portland will have a typical inadequate big city school system, like every other big city in America, where everyone who can afford to send their child to private school does so, and the public schools are left to the poorest, most troubled, and most needy students. That day can be delayed with passage of Potter's tax, and perhaps delayed indefinitely with a better long-term solution.

As a MultCo resident for the past 10 years, I've reluctantly paid the recent 3-year tax for the benefit of the schools. This, despite the fact that I send my son to private school. BUT, this new proposal is over the top.

The city seems to want to apply Band-Aids to patch what is a fundamentally screwed-up school system. Yet, I see NO action nor proposals to actually fix the school system itself and its inherent problems.

The first thing that needs to happen is to get serious and get a new, and competent, school board into place that can make decisions and stop the comedy of soap opera of the board members' personal lives. We need well-educated people who CARE to make a difference.

Next, we need a thorough cost/benefit analysis about the PPS system overall. The net-net, is that students are migrating either to the suburbs or to private schools. This being the case, reduce operating costs accordingly.

You can't run a school system infrastructure that was designed for the schools 20 or 30 years ago. You have to adjust. If that means closing schools in a big way, so be it. Sell off the properties, consolidate the schools, and adapt with the times. Lastly, why is it that the PPS per-student costs are so high? Why is a David Douglas district student getting less than $600 per annum, when a Portland student is getting over $1,100?

We need to have someone looking at these costs and why the PPS schools are so bloody high-cost. Bottom line, ATTACK THE ROOT PROBLEM(S), don't put a Band-aid on as a solution...

As far as I know, PPS has been working from flat or declining budgets the last three years - and the 50 million iTax gap is only one of the funding sources to dry up in recent years (the local option property tax, the 10-year capital bond levy, which provided building improvements, and federal cuts to the Title 1 program are just some of the funds PPS has lost in recent years.

The monies coming in to refurbish Jefferson? The efforts to retool school structures? Grant money - the district got aggressive about retooling their offerings to better appeal to parent/student expectations (not to mention federal achievement mandates); foundations such as the Bill & Melinda Gates foundation acknowledged and rewarded their efforts with $$$.

Add in the domino effect that the district faces as it strives to stay one step ahead of other potential federal funding cuts as a result of the misguided No Child Left Behind act (sure, there's plenty of room for enforcement, but not many dollars to support bringing achievement up in the first place), and the district is doing an amazing job trying to keep upright amidst the ever-shifting sands they're on top of - in my opinion, anyway.

And then there's the fact that parents are putting in plenty of sweat equity of their own - from fundraising to pay for 'luxury' positions like librarians and teachers aides to volunteering in the classroom to washing down cafeteria tables, weeding playgrounds and bringing in reams of copy paper, boxes of kleenex, and pencils to supplement the money that many teachers kick in out of their own pockets.

(Don't even get me started about the massive inequities that can create, where the 'have' schools benefit from an involved parent community while the 'have-not' schools stumble along in their wake.)

So - when the patient's laying on the operating table groggy from loss of blood, yeah - you put on a band-aid. And you don't have the luxury to debate about this potential solution or that potential solution or go marching off in search of the guy who stuck the knife in to 'make it right.'

First, you stop the bleeding. Even if it seems like yet another freakin' injury and you're tired of cleaning up the mess.

(I've been struggling with just what I wanted to say about this issue myself; now that I just came up with it, don't be surprised to see this show up in a slightly revised version over on PDX MetBlogs...)

I cannot agree with the sentiments that this tax will take the pressure off of the legislature.

I expect quite the opposite result: this tax makes it clear that Portland will, if it has to, go it alone. The school districts that are really screwed are those small districts (for instance, Banks) with overcrowding problems far worse that Portland's. You think the rural districts aren't going to cry foul?

But until we get the rest of the state on board, until Beaverton (local levy) and Portland (i-tax) makes it clear that they won't stand for the status quo, the legislature will continue to sit on its hands.

As to how much goes to admin, the numbers were reported in today's O. 3.8% of spending is for admin.

A local option property tax could not get on the ballot until November (a May vote would surely fail on the double majority requirement). By then, the schools would already have had to implement a 1/6th (57 million out of 300 million) cut.


I agree with you that the Oregon DOE and PPS need to be a lot more willing to consider charter schools. I was shocked when I moved here from "conservative" North Carolina six years ago to see how far behind "progressive" Oregon is on school choice.

However, the data that we have on charter schools and school choice is a lot less clear that you imply. A wholesale abandonment of the traditional model in favor of a total charter/school choice model is just not justified in terms of what we know about the benefits and costs of charter schools. Not yet at least.

Here's a nice review of the contradictory results to date. I think it's pretty even handed. I've saved this on my website because it's from a journal: http://www.reed.edu/~gronkep/smith.pdf

Mr Bog - I really don't think there is a guarantee that the tax money will reach the classroom. You can do what I do and make a deduction, cash or in-kind, directly to the school.

I understand about the children being held hostage, but no matter what we do or vote for, city/county/state politicians will fund the glamour stuff like ballparks, very good pensions/benefit plans and prop development and then give children the scraps.

Sorry, I am disgusted with every politician in this state unless you can give me one example of one who is acting responsibily to the children and taxpayers.

So who are you spiting by not paying the tax? Guys like Potter ($200K/year with his pension) and Leonard (pushing $150K/year with his) are going to get theirs, my friend. Give the kid on the east side of Portland with a crack mom a couple of crayons, for decency's sake.

Betsy: the patient is not bleeding. That is much too sedate an analogy. The patient's blood is being sucked out of it by the teacher's union, rising pension and healthcare costs, and an institutional willingness to punish innovation and promote mediocrity.

To make matters worse, the patient is trapped in the Portland "Psych" Ward, on the old "Multnomah" wing, of the rattletrap Hospital Oregon. Home of the most onerous business and tax structure in a five county circumference, devoid of political leadership or vision. In this vapid marketplace of ideas, the only solution is MO' MONEY! More money from businesses, and more money from a "new and improved" income tax.

Middle class families drive 15 minutes in any direction and find more affordable housing, lower millage rates, and a more hospitable tax structure. Ironically, Portland's solution is to make the tax structure even less hospitable.

Ironically, they are shocked and dismayed to learn that enrollments continue to decline, and pretend like we don't know why....Mmmmmm. Maybe we ought to ask the Central Planning Commissar:
where are all those school age children moving to? Any idea why?

You remember the old joke about the salesman who said he's going to lose a nickel on each one, but he'll make it up on volume. My wife and I will be voting no on the I-Tax and Voter Owned Elections. Has anybody seen the "Anybody but Erik" bumper stickers?

So... It doesn't seem to be unionization your are opposed to, but certification. That's a state thing. Oregon and California has the most stringent requirements for classroom teachers, of any state in the union, as I understand. I met them. I taught for five years in Oregon schools as a certified teacher. A substitute teacher, with no benefits whatsoever. A practicing teacher, particularly a new teacher, can spend 60+ hours a week on classroom prep, presentation and evaluation. It is a demanding profession and I think anybody who does it well deserves appropriate remuniration. Not everybody who has the certification is necessarily a good teacher. There are indeed those out there who are not certified who would make admirable teachers. There are always those with natural talent. But that doesn't mean that I think hiring the guy who hangs out down at the Main Library in order to cut your skilled labor costs is an option I'd like to allow. I'm not too sure I'd be supportive of a theatrical presentation of the life cycle of the salmon as nude interpretive dance is something I'd be very excited about, either.

I don't think either Einstein or Turing particularly would have been good teachers, anyway. The bright and the creative aren't always cut out for teaching. It takes more than that.

All that said, why don't we redefine our state laws to allow the introduction of natural teaching talent into our classrooms? Put them on the contract, just like everybody else.

AMEN Portlander,

I'd LOVE to spite the "tram" (uhhh....is that a "rim shot"?) and divert the money in full to the PPS.

Has anyone taken a look at the "escape rate" of children from PPS to private schools in the past 5-10 years?

And before I get chastized for also having my kids in private school, let me just say that I have to pay the normal taxes (not petty given I own one of the very largest homes in Irvington), the iTax/PotterTax (rim shot deux?!?), and $10,000+ per year to keep my kids in private school. So you can't accuse me of not paying my fair share.

And before I get called a traiter and non-school supporter....You only get one chance as a parent to educate your kids, and you are obligated to do the best you can do in that regard. I would love nothing more than to send my kids to Irvington Elementary or Alameda. But the quality of education they get at private school so completely outclasses what is available in the PPS, that I believe it would be child abuse to send my kids to PPS.

If you really want to know, we're moving later this year out of this now-too-progressive tax-ridden hell they call Multnomah County.

The hot money's (not to mention the population migration) going across the river to Vancouver/Camas/Washougal/Clark County. Yes, a state and county government that actually works.

Oops, that's Portland's motto, isn't it ... ?


"Give the kid on the east side of Portland with a crack mom a couple of crayons, for decency's sake."

Oh, come on Jack. I know you've never met a tax you didn't like but that is over the top.

The city/schools need to get their financial house in order. You can't tell me they will be good stewards with my money. We'll vote yes and shortly thereafter read about how they've squandered the money in your blog. No thanks. They have to bottom out before the make hard decisions.

I know you've never met a tax you didn't like

I voted no on (and advocated here against) Measure 30.

Please, all you tightie righties. This isn't about me. Address the issue. Thank you.

Jack, it would be much appreciated in your support of schools (which I commend), that you would expound as much, or more for collecting what taxes should be collected from wiser use of:
urban renewal; transit oriented tax abatements; historicial tax abatements, enterprize zones; LIDs; moderate income housing tax abatements; you get the picture.

Couple this with better collection of all the various taxes now imposed, I'm sure we could fund schools with an additional $100M just within District #1.

Regarding the Potter Tax, in is not fair to impose the tax with all of it's inequities: PERS people not paying the tax; other groups not paying the tax; some portions of the taxed area not benefiting from the tax, or not equal in benefits; some taxpayers not even getting to vote on the issue but could be taxed; etc.

That is why the first point made becomes even more valid, fine-tune the taxes we pay and eliminate the give-aways.

I know there are some lawyers on this site, and I wonder if they are bothered by the fact that both the Multnomah County Itax and the proposed city income tax are "retroactive" to a time before the election is held. Isn't there something in the constitution about ex post facto laws? I don't know what would stop them from saying that the tax is retroactive to 1950 and is now due and payable.

fine-tune the taxes we pay and eliminate the give-aways.

I've called for that on this blog for three years. It's a pipedream. No one with that as their real agenda is ever going to be elected to municipal government in Portland.

I'm fully aware that they're holding the kids hostage to OHSU and Homer Williams. But I'm not too proud to negotiate with fiscal hooligans.

The Oregonian ran a front page article a week ago that said the expiring county income tax kept class size down and that now, Portland's class size is lower than most school districts in the metro area. So THAT money made it into the classroom. Now PPS has a lot of aging buildings and with the bond measure expiring, too, some money will be needed for maintenance and upgrades, but the bulk of it will go for teaching.

I have no children in the Portland schools and I run a small business; therefore, any additional taxes are a burden. In fact, I probably benefit from inadequate school funding, because my business is a martial arts school and parents bring their kids to my school because their kids don't have proper physical education programs (among other things that schools aren't able to address these days).

Yet to be perfectly selfish, I think we need to approve Potter's school tax. It's not just for Jack's crack baby. It's the middle class and even upper middle class who historically sent their kids to public schools in Portland. It used to be that over 90% of all parents in Portland sent their kids to public schools. Now it's down to 82% (still a pretty good figure for a large city). That high percentage helped create a city that is less stratified by class than most other towns.

If the schools fail, we won't attract sound businesses and we will lose even more families. If the schools fail, the city will fail.

In 1989, Oregon was 1st in the nation in per-student K-12 funding. We're now 43rd.

Funding for Portland Public Schools was $391.6m in 04-05, $365.7m in 05-06. Without additional revenue, the budget for 06-07 is $329m. The cuts that were made when the local option property tax expired (did you all notice, you didn't pay it this last bill?), i.e., minus $25.9m, resulted in the loss of 250 teaching positions.

Passing a local option property tax in May would require a double majority, which the income tax doesn't. The Legislature isn't going to be working on school funding this year. If no revenue increase is passed in May, cuts will be made before the start of school this September.

If not this proposed tax, then what? And in particular, what for the children in elementary schools next year, who will have one chance to learn to read so they won't need remedial help throughout the rest of their education?

I'm with Jack, and Mayor Potter. I support funding our excellent public schools. The state has let us down, and given the record of the past 15 years will likely continue to do so. I think we should be talking about ways to provide adequate permanent, stable, local funding for our public schools, and stop expecting Salem to do so any time soon.


If I give you $20 can I have the puppy? My pet gator is getting tired of cats.

I understand Jack's rationale. Lord knows my kid will need a decent kindergarden in 3 years.
That said, I'm willing to feed the proverbial puppy to the gators if that's what it takes for PPS to make the hard choices.

As my high school history teacher always said, the Federal Income tax was intended to be temporary (to cover the costs of the Civil War). It was codified in 1913 by the 16th Amendment to the Constitution.

The thought of 4th Street Five having income tax authority written into the City Charter scares the hell out of me. And I don't make that much money. I can only imagine the exodus of portable businesses that would refuse to suffer this final indignity. Temporary tax. HAH!

Vern says, "I'm voting no only because it's high time that the city, county and state prioritize their expenditures"

Last time a politician actually acted in concert with this declaration, Aaron Burr shot him.

As a school district flack, everything I say is suspect to some, but here goes anyway.

The first post said: "I thought the state funding was essentially a "safety net" to make up for deficient funding on a case-by-case basis. So if a given district is less deficient, it should receive fewer state dollars, right?"

Well, since Measure 5 passed back in 1990, the lead responsibility for paying for all of our schools has passed to the state. The state takes into account the local property taxes raised, and then equalizes per student spending statewide, under a complicated formula. Net effect is that property-rich districts, like Portland Public, send 30 cents on the dollar of their local property taxes to the rest of the state. It helps kids across the state have a more equally funded education. The law also allows districts to raise a limited amount in local property taxes to keep right at home -- that's what's called the "local option," and PPS's five year local option ended last June. Recent local funding, including the ITax, has included a clause that if the state tries to cut its funding because Portland took care of its own, we'll just stop collecting the local tax.

A later post noted: "The first thing that needs to happen is to get serious and get a new, and competent, school board into place that can make decisions and stop the comedy of soap opera of the board members' personal lives. We need well-educated people who CARE to make a difference."

The last two School Board elections pretty well took care of that. You haven't heard much of the "soap opera" from the current 7 board members, all of them elected in 2003 and 2005. (And Julia Brim-Edwards and Lolenzo Poe, both elected in 2001, and both gone from the Board now, started the turnaround effort.)

Anyone may email me at work, sames@pps.k12.or.us, if you have questions.

But how far along / complete is the school board "turnaround effort" you talk of?

How did these people get elected in the first place?

How responsible were they for contributing to poor decisions along the way?

I may be a "tightie rightie" (love the moniker, but I wear Polo(TM) brand boxershorts and actually am FOR fiscal responsibility, instead of a person who becomes best friends with any tax that comes my way) in a progressive ("deftie leftie") town, but at least I have the common sense to call a duck when I see it.

I can't believe how bamboozled by all of this you lefties are, for all the intellectual superiority/self-importance you like to espouse. If you examine and fix the root cause(s) of the problem, the solution(s) will be self-evident.

All I see here are people attacking the Band-Aid. Can't people see the forest for the trees here? Some of these sacred cows in the form of PERS and other "cradle to grave public employee luxury" benefits need to be trimmed. That's a starting point.

I agreed with The Oregonian in their assessment of the city tax (and I assume they are not going to support it editorially). The 16-year-old kid working at McDonald's with three roommates will be paying this tax, but not the retired homeowner whose property value has skyrocketed.

A couple of points on the analogy to federal tax law. The Civil War income tax on individuals was quickly declared unconstitutional. There was no valid federal income tax on individuals until the 16th Amendment was passed in 1913. It started out as a low-rate tax on only the wealthy, but it was expanded to cover the average Joe and Jane after WWII -- I believe, in the Truman years. It's been a part of nearly everyone's life in the United States for around 50 years.

As for the unconstitutionality of retroactive taxes, I believe that brief periods of retroactivity have been upheld against due process challenges under the federal constitution. Off the top of my head, I don't know what the Oregon state constitution might say.

the retired homeowner whose property value has skyrocketed

Depending on their liquid assets and monthly income, those folks do not make very sympathetic targets for additional taxation. Whenever you try to raise property taxes, the "granny being taxed out of her home" is inevitably wheeled out. It's a wise move on Potter's part not to stir up the Metamucil crowd.

A kid making $5,000 part time at Mickey D's will pay $47.50. I'm having a hard time seeing a problem with that.

Jack, if you can sympathize with the old couple in the $750,000 manor, I don't know why you can't cut the 5-grand-a-year kid a break. He'll probably never be able to afford a house in our market. Why not raise the income exemption from $2500 to $5000? If I made $5000 a year, $47.50 would be a chunk of change.


fine-tune the taxes we pay and eliminate the give-aways.

I've called for that on this blog for three years. It's a pipedream. No one with that as their real agenda is ever going to be elected to municipal government in Portland.

Vote for me then, damnit. I'm running for Dan Saltzman's seat, and that IS my platform. Fairness. No corporate welfare. No more [rimshots]. Pave all the streets, fix all the bridges, man all the beats, staff all the jails, and school all the kids. No more abatements, no more streetcar extensions. Enough is enough!

Paul Gronke:

I read the study. It said, in a nutshell, "School choice proponents often claim choice is the best thing ever. Statistically, they are subject to criticsm as to that claim. School choice opponents say choice hurts, but no study shows that. Choice helps in virtually every circumstance, except it might only help a little. Sometimes it helps a lot. But it doesn't always help a lot."

Great. It helps a little, never hurts, and sometimes helps a lot. I'm all for it sign me up.

Why not raise the income exemption from $2500 to $5000? If I made $5000 a year, $47.50 would be a chunk of change.

Sure, set a fair exemption level. But if you're $5,000 above that level, 0.95% amounts to $47.50. If you get paid every two weeks, that's $1.83 per paycheck.

Wow. Great read. There are some really interesting comments and suggestions.

Personally, I'm undecided on this issue. Like everyone else, I have my own personal biases: I'm a brokeass college student and product of local public schools, albeit not PPS. Though I don't foresee teaching as a career, I plan on spending two years after graduation teaching at a school in a low income community as part of a Americorps' Teach for America program. So... you might say I have an interest in education.

As someone who is part of the generation that will inherit the devastating debt that this country is burying itself in, I feel trapped. I see the "success" of my parents' generation and know mine will never match it. As tuition skyrockets and housing costs soar, I wonder if I will ever be able to buy a house in my hometown. There will be Social Security (that won't be around for us - nice pyramid scheme) to pay for the retiring boomers. There are younger generations to educate. There is the neverending war debt. It seems like a no-win situation. On top of this, we're expected to provide care for our aging parents and raise families of our own? The good news for the older generations is we won't be able to afford to have kids so that should cut down on future education costs! (Sorry, Mom and Dad, you're stuck with a cat for a grandkid.)

As far as the Oregon legislature is concerned, I'm beyond disappointed. I can understand those opposed who see this as another opportunity for the legislature to avoid finding a solution. But what are we to do? I can't conscionably sacrifice education to win a staredown with the legislature. How do you tell a kid it's more important to prove a point than fund his education? It's not worth it. It's not as if we can put school on hold until a solution is found. Yet, how do we motivate legislators to act?

I'd pay the $47.50 (and, yes, that is a lot of money for po' folk like me) but that's not the answer to the education crisis.

I don't know what the solution is. I'm puzzled and torn.

[Where can I get my "If the City of Portland has the money for the Tram *rimshot*...it has money for kids." bumpersticker?!?]

Gosh I love this thread!!!! Hey Argon, I get what you are saying, but I differ with you about blaming the health insurance companies (aka scumbags) instead of blaming the teachers union for the out of control health care costs. Yes, the rates charged to PPS are very expensive, but that is because the PPS teachers are being given one of the richest benefit packages I have ever seen. (I used to work at the "scumbag" company.) The teachers get just about everything covered with no limitations, no exclusions, barely a copay if one at all, very low and often non-existant out of pocket expenses, etc. What they are given for coverage is way outside the norm for even the public sector. That's why it costs PPS so much. It is a dark chocolate rich mousse cake dessert health benefit package.

So, by asking the teachers to have a deductible that is fair, a copay that is fair and perhaps, dare I say, expect there to be reasonable limits on coverage for things like physicial therapy for example, the costs for the insurance could be decreased significantly. Also, if going to the doctor for every little hangnail would cost the employee/patient a few bucks out of their own pocket, utilization of their insurance would decrease, thereby cutting costs in next years premiums. When you can go to the doc for just about free any time you feel like it, it is human nature to do so. Teachers are no different than you and I.

Hi Jack,

Missing almost completely from this thread and the news accounts of this issue is any real discussion of the effects of the combined Multnomah County Business Income Tax and City of Portland Licence (a combined 4.05% for businesses in the city). Potter's plan extends the surcharge on the city piece of this and supposedly does something to relieve the double taxation burden on "small businesses", though I have not seen the details of this piece of it.

Ask any commercial real estate broker why there's so much demand for space in Clackamas and Washington County, but not so much in the city of Portland, and they'll tell you what their clients are telling them: with an extra 4.05% off the top in Portland, the tax savings pay for the move out of the city very quickly. I only have anecdotal evidence of moves triggered in significant part by this, but it's a lot of anecdotal evidence.

I know most of your fellow Portlanders don't want to hear it, but taxes affect economic behavior. The effect on the city of the Multnomah County and city business income taxes has been and will be a loss of business base. If it continues, the city's business base will be law firms, medical practices, restaurants, and unprofitable start-ups in the Pearl (who will have to move when they get profitable). It's very disappointing as a life-long Portlander in the process of moving my business to Clackamas County that this very important issue isn't even on the radar screen of the discussion.

I assume there will be responses about how "businesses aren't paying their fair share" and the like. Two pre-responses: 1. You can't make businesses stay in Portland, and they will behave rationally based on economics. They are moving out. You'll get your 4.05%, but on a much smaller base. 2. Many businesses are sole proprietorships or pass through entities where the effect of the tax is a 4.05% local income tax on top of the county (or city) personal income tax, on basically the same type of income. How fair is it for a doctor who owns his practice to pay a signifacantly higher income tax rate than a doctor who works for Kaiser? And regardless of what you think "fair" is, if businesses leave the city (or don't come here), the city is worse off.


Before deciding to give PPS .95% of your income, consider this: What are you getting for your money now?

According to the Oregon Dept. of Education's website,

"About 40% of recent high school graduates take one or more remedial courses upon entering college. . ."

Just so we know what we're paying for now.

It will take more than a few crayons to solve Oregon's K-12 financing problem. I don't believe that throwing more money at a failed system will accomplish anything.

All we hear from school districts is "give us more money". That's fine. But we never hear about any efforts to cut costs. Mandatory PERS and teacher salary increases are unsustainable. Health insurance costs are rising for everyone.

It is a sad fact that union contract-required automatic pay raises, "longevity pay", little or no health care cost sharing, along with double-digit PERS increases, are causing school district expense rates to climb much faster than they are able to obtain revenue. Add in skyrocketing health insurance premiums, and you have a guaranteed formula for school distict insolvency.

But except for labor contracts, this isn't the school district's fault. Look to Salem.

It doesn't matter how much money we throw at schools. In the PPS case of declining enrollment, until there is significant progress to cut costs- payroll, insurance, infrastructure etc, PPS's financial problems will continue.

Is it really about "the children", or is it about throwing money down an unsustainable financial sinkhole?

As a candidate for Portland Commissioner #2 and a former candidate for mayor in 2004 who supported the ITAX then, I will state my opposition to the City Income Tax. My reasons reflect those of most in opposition on this blog. Local government had three years to be hard at work on this problem, but did nothing. Portland citizens are sick and tired of business as usual in City Hall and want change.

Potter's plan is all new revenue, not a single reallocation or cost reduction is mentioned. The impending loss of ITAX revenue has been on the radar since Potter took office and since the likes of Erik Sten were last re-elected. Since then we've ponied up over $1 million to try to buy PGE (only to see Sten get soundly rejected by ENRON) and coughed up more for the aerial tram. Now it's January 2006 and we're getting the quarterback sneak play for an income tax that was supposed to go away (not be replaced).

In the 2004 mayoral primary I debated Potter on the budget and suggested a comprehensive process reengineering exercise similar to projects I've been involved in at Freightliner and Toyota. All beaurocracies age develop inefficiencies. While my plan may have been criticized as pedantic, it was a plan based on real world examples and experience, to find cost savings and answer some of the complaints posted here. Potter's answer was always "the need for leadership."

My point is not to Potter-bash, but to show that the first step to changing what we don't like about state and local government is to change the type of candidates who are given serious consideration.

Do I have a better plan to keep the schools funded and open? Yes I do, plus it will hold our government's feet firmly to the fire for the next two years to ensure that a permanent solution is implemented. I'll try to get some press for it in the days to come.

Mr. Smith and Mr. Canfield raise the issue of PERS only to demonstrate their ignorance. PERS is as fixed as it can be without violating the Oregon constitution, and the predictable costs being paid on behalf of current employees who will soon retire (baby boomers) are stable and will end when those employees retire, over the next 20 years or so--in addition to which there is a substantial reserve to pay those retirement benefits if necessary. Tier Two doesn't have the 8% guaranteed return on employee funds invested. New hires go into a completely different system, OPSRP, which will not generate exponential increases in employer rates due to a rising stock market because OPSRP doesn't have the guaranteed minimum returns on employee investments or the requirement that those be matched by employer contributions.

Sleepy: The discription you give of the teachers' benefit package is perfect and illustrates my point even better. What is considered a sweet health care package now used to be fairly normal before the insurance companies took over the health care industry. Nowadays we call "normal" these crappy co-pay policies that fight you tooth-n-nail anytime you actually want to use them.

My dad was a truck driver and had essentially the same health care package as mom, the teacher, back in the 70s. Now his is like everbody else's--severly cut back by the insurance companies. The ins. co's have convinced us that what should be considered normal is now extravagent. Teacher's have put up a fight to keep their health care from being incrementally dismantled. I consider that courageous, not selfish.

To the contrary, Kai, I understand very well that PERS is fixed, that there are 3 tiers and that tier 3 is essentially a 401(k)-style program, which I support. The problem is that everytime they lay off teachers, the ones who get laid off, regardless of effectiveness, are the least senior. We're keeping the most senior (read, most expensive) teachers on regardless of their performance because of union rules. If it were possible, I would lay all of them off and rehire them under Tier 3, since the OR Supreme Court ruled we can't tinker with Tier 1. Obviously, we should allow folks to retire if they can and take whatever benefit they're entitled to. I'm not trying to be unfair about it or strip anyone of their pension. However, when you realize that you've got a too-good-to-be-true deal, it's only fair to be agreeable to amending the deal. Or those teachers should be willing to take substantial pay cuts that Tier 2 and 3 teachers wouldn't to compensate for the fact that Tier 1 teachers are essentially getting a massive deferred compensation package.

I'm not ignorant of the situation, and forgive me for not spelling out my understanding. I'm trying to find some creative ideas that will get us out from under this crushing problem. Do you have any ideas? Does anyone else? Anyone here know the rules well enough to referee? I'm serious. Someone surely must know enough to be able to say, well, it won't work quite like that, but you COULD do......


Now, I see my generation living an "I got mine, screw the rest of you" lifestyle

Namely, the administrators and a few teachers in PPS, and anyone building or buying a tax-abated property downtown.

Give the kid on the east side of Portland with a crack mom a couple of crayons, for decency's sake.

Bad analogy...everyone knows we have to buy our own crayons...;-)

If one of y'all does start printing "if the City of Portland has the money for the Tram, it has money for kids" bumperstickers, do I get a cut? I came up with that line about three hundred posts back.

Of course, my share would immediately be donated to PPS.


As I said before, I am in favor of more flexibility with charters. But I don't think the data support at all your call for a wholesale overhaul of the system. And there is no evidence that charters actually save money, the issue that started this discussion.

I think your head and your heart are in the right place Don. For me, supporting this tax is the first place to start. Next, we work on a local option levy to replace the tax. And we keep the PPS administration's feet to the fire on budget and personnel issues like has been done so well on PDC, the Tram, SoWa.

But like Jack, I believe we have to start by passing the tax, or the patient dies.


The tram [rimshot] is a good start. Let's take the 3.5 million. Now you're only 153 million in the hole. Let us know where you propose to get the rest.

Mr. Hinds,

You've lost my vote. And it's inaccurate to say that City Hall has done nothing. Potter traveled statewide to try to improve Portland's image. He traveled to Salem multiple times to try to convince the state legislature to fund schools. I don't know, but I presume he's tried to get the governor on board. And he tried to broker a regionwide solution.

He does not run the school board. The city is not even officially responsible for funding the schools. What more would you have had him do?

Some folks have commented on teachers' health care coverage.

Two years ago, the teachers didn't pay a cent toward their monthly premium. Today they pay 7 percent of the cost.

In the last two years, their plan has also been redesigned to cut costs -- with co-pays, $100 deductible on emergency room care, etc.

Overall, the school district is paying $100 less a month per employee under the Portland Association of Teachers contract. All other employee groups at Portland Public Schools have a cap on the district's payment for their health care.

Meanwhile, health care costs for the typical employer -- private or public -- keep going up steadily.

We have made progress at PPS in reining in health care costs, but not many people realize it.

Sarah Carlin Ames

All that's been exposed by this city tax proposal is that Potter is another Vera Katz. Of course, he's doing what she would have done. That's vision? Vera had too much vision and we're paying the price. Even Diane Linn had the decency to publicly state that the 3-year Multnomah County tax was "sold" as temporary and that it wouldn't be the decent thing to renege on that proposal. Isn't that what we expect in our daily business dealings? If an employer tells a union that there will no raises for 3 years, but then it will change, does the employer then have the right to say that the no-raise policy is extended? Is there no meaning to financial promises?

Potter's visioning process is getting off to a bad start with this tax proposal.

Paul, I'm sorry I lost your vote. You've got Sten clinging to Potter's coat tails to vote for, and then Ginny Burdick who's unlikely to answer the call. I'll answer your question and hopefully Bog Blog readers will remember where they heard it first.

So here is what I would do... What the City can do without amending the charter is pass a bond measure to keep schools open for 1-2 years. Embeded is in that bond is the fee for a real, comprehensive study (not a Sten-cell research study) and task force that meets every damn week to research it. You get the teachers' union, you get parents, you get civic leaders, you get reps for all stakeholder groups and you put your political capital on the line by making sure your name is carved in the outcome and failure is more damaging to all involved than compromise. Make sure the not-in-my-term syndrome doesn't offer a way out.

I'm always accused of sounding pedantic, but you need to collect data and throw it into an ANOVA analysis. Find the Main Effects and the Interactions. Where there are interactions (e.g. more school programs lead to less crime, lower drop-out rates, and less money needed for policing school campuses from 3-5pm) there are cost savings. Can Parks and Recreation and PPS leverage off each other for playground maintenance? These are the kind of questions that need to be asked. The Task Force needs to include the Chief of Police, PPS Superintendant, Mayor, etc. If Potter says he doesn't have time to meet weekly on the matter, then the hypocrisy has already been exposed.

How about new ideas? Many manufacturing plants use waste oil heating, which is about half the cost of normal oil/gas/electric heating. The air quality is not compromised, so why not implement waste oil heating for schools? Maybe it's a good idea, maybe it's not, but it has the potential to save millions. And what about the savings being left on the table as we speak? City Club has already identified $2.7 million of instant savings from changes the PD/FD disability program. Why is Potter leaving that on the table and asking for it from the voters? Add it all up and maybe you only need a 0.625% income tax, which is half the ITAX and a lot easier for taxpayers to have faith in.

Did you see Fat Man & Little Boy with Paul Newman, where Newman says the way to get what you want out of people is to cut off their options and drive them to your purpose? That is what the citizens of Portland and Oregon need to do to the government. No more squirming out of liability and putting the burden back on the electorate.

You've already got a couple of squids to vote for if you don't want to vote for me. Fair enough, but you've got my stance, and I'll see it through. By the way, where is Ginny Burdick on this issue? It's hours from February and she STILL hasn't filed for office or published her agenda.


The part that's most frustrating about this discussion is that our schools - a separate, underfunded entity outside of city/county government - are bearing the brunt of the frustration many people have with unrelated boondoggles like the PGE purchase, the arial tram, PDC policies, etc. etc. etc.

It's like taking your grudge against Paul Allen and the Trail Blazers out by boycotting WinterHawks games (which might have made some middling sense when Allen owned the building, but makes little sense now that he doesn't...)

Kill the messenger here if you must - but can you still respect and pay attention to the underlying message itself..?

My parents paid for my private school education, both grade school and high school, and, of course, they paid for public schools too. There were kids in my high school who washed dishes after school to defray the cost of their tuition. Parents paid for everything, books, etc., just like in college. Public school parents could pay for things like extra-curricular athletic equipment, arts stuff, etc. I don't think it should all be put on the general taxpaper. Parents are the ones who want us all to pay for their kids education, with all the trimmings. My parents paid for all of my expenses and we weren't that well-off. I think the public schools might take a lesson or two from the private schools. I think the only thing my parents didn't pay for is the cigarettes that I bought illegally from the bowling alley next door.

Kudo's to you Patrick.

It is ironic that your parents paid for your education outright, and also subsidizd a portion of public education which you did not use. They paid for two educations, but you only received one.

Perhaps the "New and Reduced" I-tax could include a tax credit for families paying private school tuition, so they don't have to pay for education a third time. It only seems fair.

Why is it that some of you keep stating that the tram is costing the taxpayers only $3.5M? All of the other blogs and their postings that Jack has posted in the past two weeks has many times laid the facts that the tram costs to all of us exceeds by far the $3.5M.

A rough life-cycle cost of the tram is over $216M for a twenty year period. We will be responsible for paying a good share of that operation/depreciation costs for the tram plus all the other costs. Gee, I won't go over all the costs again and the proportional amounts to the public and OHSU. And don't forget, OHSU is a public corporation. Tax dollars benefit OHSU tremendously.

The problem, Mr. T, in reference to parents who pay private school tuition in addition to footing the public education bill, is that if we start talking "fair" then those without children at all should all get "credits" too . Then there is the reduction in revenue which is just the opposite of what the state needs right now.

In reality, we have the opposite of any "fair" credit: Those with kids get to claim them as dependents. (I still don't understand why there is any financial incentive offered to have kids but that's another story.) Childless people wind up doubly penalized --- paying for an education for children they don't have, and not getting any dependent credit.

I do think this is unfair, however, society as a whole benefits from education so I try not to rant about it too much. ;)

The "live within our means" arguments here ignore the context in which public school funding in Portland came to be such a mess. The property tax measures of the 1990's were passed on the promise that "there's plenty of money" to run the schools.

Before the property tax limitations, 75% of scool funding in Oregon was local, 25% was from the state. (Federal funding is mixed in there somewhere at about the 5% level or so.) During the go-go 90s, high income tax revenues allowed the state to cover much of the lost school funding from porperty taxes, which shifted the funding allocation to about 75% state/25% local. With the cooling of the economy, the state income tax, which was never intended to cover state programs AND local schools, fell short. The program cuts that were predicted during the property tax campaigns finally came home to roost.

Now, with "normal" levels of state income tax revenues, rather than the heady 1990s levels, there is simply not enough money to fund state programs and all local schools. The reason that Portland is so hard hit is that state funding brought with it an "equalizing" of funding of school districts across the state. Rural districts that were formerly starved by their localities were getting more funding than before.

Equalization is a good thing, but not if it imposes service restrictions in one region at the expense of another. It's at least debateable that the rural/urban funding allocation scheme is not a fair distribution relative to differences in costs and special program needs between Portland and rural districts. But rural legislators refuse to reconsider that negotiated adjustment formula.

Finally, that increased funding for rural districts is being paid for by Portland metro income taxes. My recollection may be off, but the last time I looked about 80% Portland metro income tax dollars for eductaion are spent outside the Portland metro area. In contrast, some rural districts, like John Day, get by paying just about 25% of their education income tax dollars.

So, living within one's means is a nice sentiment, but being honest about how those means were artificially constrained would make that attitude a bit more tenable.

After reading today's O, I have another suggestion, one that I think ought to satisfy both the anti-tax skeptics *and* the public school advocates. So here it goes.

1) We take the short term surpluses from the City and County budget and redirect this (legal? feasible?) to the schools in order to staunch the shortfall. This is our one year band aid.

2) The school board does the hard work of identifying savings in the budget (if they are there) and negotiating additional cost savings on ballooning health care costs.

3) We engage the various stakeholders in proposing a local option property tax levy for the ballot in November.

This proposal addresses the concerns of those who argue that we need an immediate solution for the 2006 budget.

This proposal gives Vicki Phillips, Tom Potter, the Portland Schools Foundation, and the other stakeholders time to build a strong coalition.

This proposal addresses the concerns of those who are worried about the inequities of a flat income tax.

This proposal addresses the concerns of those who are opposed to the City imposing an income tax.

This proposal addresses the concerns of those who are worried about the volatility of an income tax.

This proposal addresse the concerns of those who are worried about the allocation formula.

I'm sure that's Plan B if they don't get the quickie income tax in May.

Here's my two cents:

Property taxes in this city are based on whatever value a house was worth in 1997, with a 3% maximum increase in assessed value per year. A majority of the houses, in the Jefferson school district for example, were worth $30-70k. At a 3% a year increase, that puts that $70k house at a tax-appraised value of $104k. By looking at recent house prices in that area, you will find very little housing that is inhabitable under $250k.

Would it be nice if the tax-appraised values are based on the market value? If that were the case, Jefferson school district would have 12% (or more) increase in funding every year. This means 12% more computers, teachers, and extra-curricular activies every year. What about property value increases in the Pearl? It would also be a more non-regressive tax, since if you wanted to live in the expensive neighborhoods, you would have to pay more to the schools to do so. This would thereby remove some of the tax burden from low income bracket.

I think there are significantly deeper problems in the way this state is funded (and where the funding goes), and buying 4 years of time to do so won't force the legislature to change anything. You are always the bad guy for not voting for schools, which makes Potter confident he can get this passed. He was also smart to not include the East county, which voted heavily against the ITAX.

Correct me if I'm wrong, but isn't true that the voting district with the highest voting percentage for the ITAX also had the highest percentage of non-payers?

If you approve a "limited" City Income Tax, you are just one City Council vote away from progressive CoP income tax rates.

Remember, they passed public financing of private campaigns for City Commissioner/Mayoral races without a vote of the people. Once they have "limited" or "temporary" authority to levy an income tax, it's just a question of when (or how much) it MUST BE EXTENDED (or increased) FOR THE CHILDREN.

Maybe the kids can study 2% for Public Art projects instead of making their own in Art Class? Maybe the Our CHILDREN can ride the MAX or the Tram instead of going to a music class. Maybe OUR FUTURE can play hide and go seek with Vern's Puppy between the newest TIFripoffs in the SoWhat District (instead of new playground equipment).


On a per student basis, PPS general fund revenues increased by 25% from 1997-1998 to 2005/06.

In absolute terms, general fund revenues increased (from $335.6 million to 365.6 million) from 1997/98 to 2005/06.

Over that same time, the number of teachers fell by 16.4% (from 2,580 to 2,156) while enrollment declined by 15% (from 55,321 to 47,008).

PPS has more general fund revenue (per student) with fewer teachers on the payroll today than in 1997/1998. Where's the funding crisis? Fewer teachers earn more total compensation with nearly the same student to teacher ratio as the 1997-1998 school year.

It sounds like a cost containment crisis, not a funding crisis. If the City and County want to chip in, then let them decide to quit funding something else. We call it living within your means where I come from.

Does everyone here realize that Oregon has the HIGHEST--yest HIGHEST, even more than CA--state tax rate in the country? The temporary tax that was supposed to be temporary was not to fund a 'shortfall' as they claimed--the govt. voted a budget increase and claimed there was a shortfall. In tough times, tough cuts must be made. 3 years ago, when the country was in a recession and everyone was personally cutting back, Tax and Spend OR voted increases. The burden always fall on taxpayers...again. My husband and I have to pay a lot more than 'a few lattes' worth of this tax, and we do not have children in schools here. I grew up in a fiscally conservative state with low taxes and excellent school systems(Fairfax Co. VA). It can be done. Until govt realizes they do not have a blank check to work with and actually take some fiscal responsibility, this temporary tax will become permanent.

Oregon has the HIGHEST--yest HIGHEST, even more than CA--state tax rate

Not if you factor in the fact that we don't have a sales tax.

If you add Oregon's property tax to Oregon State Income Tax (plus another 1% I-Tax), our local tax burden exceeds CA.

For example, at a $75,000 income (with "average" consumption of taxable goods), the Tax Foundation estimates a Portlander would spend 12.4% of their income on taxes. In Los Angeles, the comparable number is 10%. In Seattle, its just 6.5% (which likely is identical to Vancouver). Mmmmm.... 12.4% or 6.5% (and all I have to do is open an office in Vancouver and own a bigger house with rising school district enrollments)? Mmmmm.

Cut and paste the below link:

I am simply disgusted by the mentality of Portland city government. If there is a problem, throw other peoples money at it till it goes away. Have we forgotten the primary causes of the Revolutionary War, i.e., overly burdensome taxation. It may be an unpopular position to take however, I cannot help but query why the Portland Public School System has not addressed the cause of this problem during the three years in which the Multnomah County I-Tax was in place. The I-Tax was meant to be a temporary solution and permit the school system some breathing room to internally examine their operations and make the appropriate changes so that they can operate within their budget (knowing that the I-Tax would expire). Furthermore, it is interesting that any budget shortfalls could be fulfilled by the city tightening its own belt, however, are they willing? Clearly the answer to that is an emphatic NO.

Many of my clients are moving out of Portland, citing the incredible taxing burden imposed on them. What people should bear in mind is that the proposed city income tax includes with it a increased business surcharge. As a small business owner I am deeply troubled by this apparent willingness to so unnecessarily burden small businesses. Portland already has a progressive business license tax, which is so oppressive it is driving business (especially those which operate on a small margin) either under or out of this area to avoid this double or in sometimes triple taxation (when including personal income tax on a sole proprietor).

I must again query, if I ran my business like the Portland Public Schools are run, I would have gone bankrupt a long time ago. Should we not hold them to the same financial responsibility to which we are held? The public is not a money tree from which government can pluck apples anytime it pleases.

In the words of the Thomas Jefferson:
"But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”
Declaration of Independence (1776).

Therefore, if city government cannot see fit to live within its means we, the public must find those who would.


Listed below are links to weblogs that reference Yes on the Portland income tax:

» Why I'll be voting yes on iTax, rev 2 from Metroblogging Portland
I've been struggling in the face of what seems like overwhelming negativity to articulate just why I believe that supporting a tax in May - yes, another tax - is necessary. I won't go as far as to say that... [Read More]

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