Let's say that same family of 4 put aside that same $18 a month (after taxes btw) or $216 a year for 15 years.

What would they have at year 16 if they were investing this same "$4.54" ?

$216 a year, invested at 3 percent, yields $4,017.37 at the end of 15 years.

$5027.16 @ 6%

Business taxes are just the government's way of outsourcing tax collection.

Anyways, I always felt taxes should be tied as closely as possibly to their intended use instead of hiding it in your water bill.

@ 6%

If you know where I can get that return, let me know.

The city has to call it a "fee" because they have no authority to tax. That's why the business license in Multnomah county is the BIT/BLF. The county portion is "business income tax", the city portion is "business license fee". They are both based on a percentage of the gross.

Many politicians in Oregon state that we are a low tax state. And we are, until you add in all the "fees".

A tax by any other name.....

Jack--

TIPS -- specifically Vanguards VIPSX

It is up 3.94% YTD
It was up 11.59% for '07 and
It is up 6.10% over the last 5 years(annualized).

They may not be sexy, but they are working right now.

A tax by any other name.....

is just more money for lame politicians to waste

I'm amazed that the mainstream media keeps playing along with Sam in writing that this fee, if passed, will really solve Portland's deferred transportation maintenance problem. This money will not make much of a difference. It is a drop in the bucket, not a real solution.

A fee? A tax? Who cares? It's going to fix roads - and I think there's no question that the roads are in miserable condition. And why not put it on the water bill? Otherwise they'd need to come up with a whole separate billing/collection system. Seems like that money would be better spent fixing roads. The city does indeed have the authority to tax, and does. In this case, it makes no difference what you call it.

the roads are in miserable condition.

The streetcar's looking good in those condo ads, though.

why not put it on the water bill?

Guess you must have just moved here. Our water billing system is always a fiasco; it can't even bill for water, much less start running a tax system.

it makes no difference what you call it.

Uh huh. That's why Sam the Tram won't call it a tax. Which is what it is.

They fixed the billing system. And you're already billed for non-water items on your water bill - namely sewer and stormwater charges. You'd think adding a charge for streets would be no big deal - and you'd think they would have figured that out before going this far with the street tax.

I agree that the condo abatements & subsidies are a waste of tax dollars. But even if you diverted those dollars to streets - there's not $460 million - is there?

you'd think they would have figured that out

No, you'd think that.

The water billing system will not be able to handle all the exemptions and other complicated junk that's being discussed -- a discount if you buy a transit pass, or own a bike, etc. It will be an administrative disaster.

there's not $460 million - is there?

I doubt it, but if there's, say, $100 million, why don't we have a $360 million transportation tax instead of a $460 million one?

"It's going to fix roads"

Tha's is my biggest issue. Bud Clark instituted a franchise fee for fixing roads about 20 years ago and it did fix roads - for about 4 years.

Then the reign of Vera took effect and she ended up siphoning off all of that money to other projects. COincidentally her chief of staff? One Sam Admas.

I think after about 4 years, they will take this fee and spend it on other things and then 20 years fomr now, we'll be told we need another tax to join two other ones.

My trust level of Mr Adams is zero based on his previous behavior.

On the "fee" label: The fact that not a penny will be collected from people who use Portland roads but don't live in Portland conclusively demonstrates that it's a tax, not a fee -- and a property tax at that.

Jack makes a good point: How DO we get the 'Couverites, Beavertonians, and Clackamasians (or Clackamasses?) to pay their share of the wear and tear they put on our roads as they scurry back and forth between their Portland jobs and diversions and their tract homes in lower-tax suburbia? Sam's road tax and Ted's registration fee will be shouldered by Portland and Multnomah County (respectively) residents only. Free rider problem, anyone?

The solution to this is raising the state gas tax and dedicating the increase to road and bridge repair. (Well, that won't get the Clark County moochers, but it's a start). Remind me why that can't get done in Salem? Don't the peak-oilers, bicycle Nazis, smug Prius owners, and state and local road and bridge officials (not to mention road contractors and lessors of traffic cones and Jersey barriers) finally have a big enough coalition to push that through?

Although I agree it is a tax--and a bizarre one at that--It's a myth that businesses always pass on taxes to the consumer. They can only do that if raising their prices won't reduce their sales. If a business operating in the free market is operating optimally, it already is selling its product or service at the maximum price.

So when a new tax comes along, businesses may have to cut costs or reduce profits, not simply raise prices.

If a business operating in the free market is operating optimally, it already is selling its product or service at the maximum price.

If all operators are subject to the tax, they all raise their prices to cover it, and consumers grind their teeth and pay. Sure, Portland businesses will be put at a disadvantage compared to out-of-town business with whom they are competing, that's for sure. But hey, ain't that already the case, in spades. Everything's being outsourced to Tigard and Tualatin as it is. This will just accelerate the trend.

Jack, as to your claim that the street fee is a "tax," the Oregon Supreme Court in this case: http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=or&vol=S52624&invol=1
Knapp v. Jacksonville, January 2007, would seem to disagree with you. The Court found that a surcharge on utility bills to pay for police service was a fee, not a tax. If a city can institute a "police utility fee," it certainly can institute a "street utility fee."

Quite a few Oregon cities have street utility fees similar to what Portland is proposing, including Lake Oswego, West Linn, Wilsonville, Tualatin, and Milwaukie. Tualatin has had its street utility fee since 1989. Medford and West Linn even have "parks utility fees" to pay for parks maintenance.

Whether it is good policy or not is certainly up for debate. But the decision as to whether it is a "utility fee" or a "tax" seems to have been decided by the Oregon Supreme Court.

Jacks right about "outsourcing" to Tigard. I recently engaged the services of a moving company, after getting three bids. A Tigard company was 20% cheaper than two Portland based companies.

Guess who got the business?

Portland small businesses can raise their prices all they want: but if I can buy it cheaper in Tigard, Beaverton, or Oswego, I will. If it's a big budget item (like a car), I'll even drive to Vancouver to save a couple hundred dollars.

But the decision as to whether it is a "utility fee" or a "tax" seems to have been decided by the Oregon Supreme Court.

The court may get to decide what Oregon law is, but it's not the final arbiter of the English language. Governmental charges that are not meaningfully tied to usage of a public good are not "fees," in the common sense of the word. They are "taxes."

How long until Sam & Co. tell us this tax will cost less than a cappuccino a month?

The "Big Oil" play by Sam and Randy is a hoot.
A completely fabricated one. Why can't these guys just play it straight?

Big oil isn't involved at all. It's people and businesses.
Randy's screed yesterday was astounding.
Especially this.

"Commissioner Randy Leonard said the council was ducking its responsibility to community safety and selling representative government short with a referral to voters."

Well then what does Randy call what they were doing the whole time the now $1/2 Billion backlog was backing up?
Responsible?

Seems to me he's admitting they were ducking their responsibility to community safety.
And now he'd like to duck accountability and have the taxpayers suffer the consequences.
All while he battles BIG OIL?
What a guy!

Actually, there is 6% investment out there guaranteed by none other than Uncle Sam himself. Here is how you do it:

When you file your tax return (on time of course, April 15), don't take the deductions or credits you are entitled to. That, of course, will increase your tax payment substantially. However, you have up to three years to amend your return and claim a refund - at which time you claim all the deductions and credits you were entitled to. (Be careful with estimated tax payments, you must file your amended return within 3 years of the earliest estimated tax payment you made.) As a bonus, Uncle Sam adds 6% interest to your refund. (You will have to pay tax on that interest in the year you receive it, but you would have to pay tax on any other investment too.) So be of good cheer, there is a solid 6% investment out there.

Just say "thank-you" Uncle Sam!

Big Oil or Big Government?

Number of gas stations in Multnomah County (2002): 159
Sales: $423 million
Number of employees: 1,685

City of Portland (2002-03 FY)
Budget: $1.52 billion
Number of employees: 5,254

Bottom line: CoP is more than 3 times larger than all the gas stations in the County.

well done Garage Wine

size matters

Jack,

It's pretty easy to buy a general obligation bond from a variety of Oregon municipalities (together with a AAA insurance wrapper, if necessary) that pays more than 4% p.a. with a 20+ year maturity. Granted, a AAA insured rating isn't what it used to be, but what is the likelihood that the Port of Portland or City of Portland won't raise taxes and/or rates in order to pay off their debt?

The taxable equivalent yield on a 4% Oregon muni bond is 6.76% assuming you're in the top tax bracket and live in Oregon(or 6.56% at the 33% federal bracked).

There are a few 6% long maturity jumbo CD's (or FDIC insured deposits), but most of them are callable at the issuer's discretion. Probably not a great bet in a declining rate enviroment.

Here's a TEY calculator, thanks to the miracle of Google:

http://www.morganstanleyindividual.com/markets/bondcenter/TEYCalculator/

TIPS bond funds are attractive, unless you're skeptical of how the CPI is calculated. Irrespective of the CPI, you could lose more than 6% a year in purchasing power, assuming the dollar maintains its current trajectory.

Which is why many long term investors prefer high dividend paying stock funds (11% to 13.5% is quite achievable in many closed end "buy/write" funds), but you have to live with stock market volatility.

The long term historical record is quite comforting, if you exclude the pre 1932 data. If you believe this is the beginning of the next Great Depression, then precious metal/equity funds yielding 6% are readily available.

As a bonus, Uncle Sam adds 6% interest to
your refund.

Yes, but I believe the interest runs only from the date on which you claim the refund. Nice try, though.

Gordon,

Could a city shut off water to someone that owes money on a city parking ticket, rather than exclusively for a utility "fee;" surcharge, whatever. If this method is OK for government what about for non-governmental units? For example: guarantors of student loans or a bank that obtains a deficiency judgment against a home buyer that had refinanced their ARM loan, wherever such person now resides. It does add a tool to a collector's toolbox.

The statutes pertaining to collection of judgments already make all judgments, governmental and non-governmental, an automatic lien on real property where a judgment debtor has some ownership interest. The automatic lien provision makes no distinction based on the character of the judgment creditor.

Suppose that the City of Portland were to declare, by way of ordinance or referral, that for purposes of all state court judgments (or judgments obtained in any state) that judgment creditors may now fill out a few prepared forms to effectuate a cut off of water to judgment debtor X.

They have already done this, for example, for judgment debtors that seek public funding for their election campaigns. It disqualifies the applicant.

The denial of water as a means to enforce a court judgment is not something that I would believe is within the jurisdiction of the city. It is a whole different issue than cutting off water for failure to pay a water bill.

Picture Emily Boyles still living in Portland and our City Auditor calls up the news folks to let them know that he is sending out the water works folks to cut off her water, not for nonpayment of her water bill but, for not returning the gift the City Auditor says must be returned. What a spectacle that would be? (Banishment, reinvented.)

Consider now whether such enforcement method could be used for nonpayment of a Mitt Romney/Hillary Clinton style demand to buy health insurance. "Pay up! Or else . . "