Why the Proposed Portland Street Fee is Good for Active Transportation

Tomorrow I’ll be testifying at City Council in favor of the “Transportation User Fee”.

I’ve seen a lot of buzz in the last day or two that this fee is unfair because it charges all households the same fee, and gives no credit for reducing auto-dependence. Some have even said it perpetuates an auto-dependent system.

In other forums, a preference has been expressed for increasing fuel taxes instead.

I strongly disagree with those perspectives.

But first, let’s deal with the valid criticism that’s also being widely discussed. This fee is regressive. That’s absolutely true. I’d much prefer a progressive, income-based tax for this purpose. Commissioner Novick has indicated the same preference. But it’s a political non-starter. And to their credit, the Mayor and the Commissioner have created a break for lower-income households, making this less regressive. I hope they’ll do more, and I will testify to that tomorrow.

Despite its regressiveness, I think this is a clear win for active transportation. Here’s why:

We desperately need the revenue, and it’s not going to come from a fuel tax

First, the gas tax is not going to solve the problem. The Portland Plan makes this clear:

In 2012 the Portland Bureau of Transportation’s largest single source of revenue remains the state gas tax. State gas tax revenue is increasingly volatile and unsustainable due to economic fluctuations and and increasing use of electric vehicles. In addition, the goals of this plan to encourage more resilient, human-scale travel choices (walking, use of mobility devices, biking and the use of transit) will put additional pressure on this revenue source.

Do you get it? The more we succeed at moving people to walking, biking and using transit, the less money we have to maintain the transportation system! Even if we could garner the political will to keep raising the gas tax, we eventually get to the place where the last driver of a gasoline-powered car has to fund the entire street system. Should we continue to have gas taxes? Yes! Should we continue to raise them? Yes! Will that fund our needs by itself? No!

The Portland Plan also identifies that we need to spend about $300M more per year on maintaining the City’s infrastructure than we do today, and the City Auditor has identified the need to spend $75M per year specifically on transportation just to catch up on street maintenance. The simple matter is that without substantially more revenue, the City will never be able to address our needs for sidewalks, bikeways and safety improvements. They’ll simply be pouring all their resources into an ever declining sea of potholes.

This is not about perpetuating an auto-dependent system

As the explanatory materials make clear, this revenue will be spent on two sets of priorities: maintenance and safety. There are no buckets of cash in here for expanding auto capacity.

As every cyclist knows, Portland’s streets are getting bumpier and bumpier. We can’t walk, bike or take transit around the city if the streets are in a total state of disrepair, and they are definitely headed there. Letting the streets turn to gravel is not an effective strategy for reducing VMT. It will simply hurt the livability and economy of our City.

And the safety agenda in this package is all about the things we value:  dealing with high-crash corridors, safe routes to school, sidewalks, crossing treatments, and even protected bikeways. Not enough, to be sure. But way more than we are getting today.

We have skin in the game

As virtuous as we may feel for reducing (or eliminating) our driving, we still benefit tremendously from the transportation system. We should pay for those benefits. Users of fossil-fuel vehicles should pay more, and they will – they’ll pay both the user fee and gas taxes. But because I walk and bike, that does not exempt me from a responsibility to pay for the system.

I will happily pay my family’s $11.56 each month and will feel good about the things it will pay for. I hope other active transportation advocates will feel the same way and join me in supporting this fee.

29 Comments

29 Responses to Why the Proposed Portland Street Fee is Good for Active Transportation

  1. Tony J
    May 29, 2014 at 12:30 am Link

    I agree with you completely about the residential fee. There’s been a lot of resistance to the business fee and I’d like to know your opinions on that part of this.

    Do you think the council should table the business fee for now? Can they make enactment of the residential fee contingent on passing a business fee too?

    Could the new business fee be a hybrid fee? I envision a, more-or-less, flat fee for business combined with one or two user fees. Parking fees and maybe a gas tax increase would be fair options.

  2. Chris Smith
    May 29, 2014 at 6:59 am Link

    Tony, I don’t think of this as a business fee and a residential fee. From a policy point of view this is a trip generation fee. You pay based on how many trips your property generates, just like your water bill is based on how much water you use (and that’s regressive too!).

    [Sidebar: since parking lots don't generate trips, they only facilitate them, I'm fine with this fee not applying to them - although it should apply to parking lot being used for a purpose that does generate trips, like food carts. In my view, parking taxes are a good policy idea, but a separate issue from trip-based fees, and with different policy objectives.]

    Obviously calculating trip generation for business properties is more complex and I’m fine with taking the time to debate it and get a model that’s as fair and accurate as we can make it. I think the Mayor and Novick have said that the fee will start being collected on all types of property at the same time. That would be my key threshold. If they get debated and adopted on different timelines, I’m OK with that.

  3. bjcefola
    May 29, 2014 at 8:08 am Link

    Chris, you say a more equitable tax is a non starter. How does that square with Fritz promoting a new parks bond? That too is infrastructure that everyone uses. Why is it possible to fund that through property taxes, but streets requires a flat fee? The only difference I see is the preferences of the underlying leadership.

    • Chris Smith
      May 29, 2014 at 8:40 am Link

      Bonds based on property taxes are a very different political animal. Voters essentially weigh the value of the improvement against the cost. Another key difference is that capital bonds are exempt from constitutional limits on property tax rates.

      If we wanted to use property taxes to fund transportation maintenance, we would quickly bump into the caps, and would have to choose to reduce funding to other general fund services: police, fire and parks.

      There has been discussion for many years of a region-wide bond measure to fund transportation investments (of all flavors: auto, freight, transit, active transportation). The polling has never resulted in a go forward recommendation. But that mechanism won’t work for maintenance.

      • bjcefola
        May 29, 2014 at 6:16 pm Link

        I’m not sure why upgrading unsafe playground equipment can be funded with a parks bond but upgrading unsafe street crossings or bikeways can’t be funded with a streets bond, but I’ll take your word for it. Let’s say that a capital bond is not feasible. That still leaves other kinds of levies.

        The children’s fund isn’t a capital bond, but that delivers $10M a year. The police and firefighter fund takes a lot more than that and it isn’t a capital bond. The library isn’t funded by a capital bond. I think there’s more than one way of using property taxes to fund service, and we fund a variety of services with them even with caps.

        I have seen compelling arguments that the current property tax system is unsustainable and will produce chronic and growing shortfalls. But that makes this worse. It isn’t just a one time fee that happens to be grossly inequitable, it’s an entrenchment of a grossly inequitable fee system as the solution to broken property taxes.

        The cure is worse than the disease.

      • Anandakos
        May 29, 2014 at 6:29 pm Link

        Chris,

        That’s because every group (the drivers’ team, cyclists, transit-lovers and walkers) expects that the other groups will get all the cookies. So everyone is against an “omnibus” solution, no matter how apparently equitable.

        The same thing happened in Puget Sound. In 2007 “Road and Transit” flamed out while a year later “Sound Transit 2″ passed comfortably.

        The transit folks voted against “R’n’T” because they didn’t like the “R” part, joining the BANANA’s who always vote “No”. The transit folks of course voted for “ST2″, and so did the drivers’ team folks who believed that the new expresses and regional LRT would help congestion.

        Of course, the rapid growth of Pugetopolis in the last five years overwhelmed any congestion relief that ST2 provided, so now that the Great Recession and another five years of frothing-at-the-mouth bloviation against transit has been spewed, this year the drivers’ team switched sides and voted with the BANANA’s out in the county, defeating Prop 1.

  4. m
    May 29, 2014 at 8:25 am Link

    With all due respect, when you say things like “we desperately need the revenue, and it’s not going to come from a fuel tax” you really lose credibility in my book. The fact of the matter is that revenue has been RISING for the department. The problem is where the money is being spent. There has been an ongoing strategy across departments to spend general revenue on pet projects and seek additional revenue for what most citizens consider to essential services. This has been going on for years and is getting worse. There is enough money for maintenance already. And I say that as a liberal Democrat. I will be actively supporting a public vote on this issue if Ms. Fritz votes in favor today.

    For example see the auditor’s report from last year:
    http://www.portlandonline.com/auditor/index.cfm?c=60923&a=431819

    m

    • Chris Smith
      May 29, 2014 at 8:43 am Link

      We can debate what priorities for transportation funding should be. But I would challenge you to go through the PBOT budget and identify $30-50M of “pet projects” that you would cut. Discretionary programs simply don’t exist at that scale.

      • m
        May 29, 2014 at 9:17 am Link

        On an annual basis, probably not. But when you continue to ignore maintenance year after year and let it build up like it has now due to nonessential pet projects, it’s disingenuous to then say immediately find me $30-50 million to solve the problem. There needs to be a return to essential projects along with a reduction in headcount and a cap on salaries.

        And if revenue is actually needed, raise the gas tax, index it to inflation and come up with a viable VMT program. The street tax is a terrible idea for all the reasons expressed by others.

      • Oregon Mamacita
        May 29, 2014 at 12:00 pm Link

        There is a mentality in PDX that just because saving 1 million here and 1 million there will not solve the big deficit- it is still alright to avoid the small cuts.

        To restore trust, I would like to see the 650,000 light rail study scrapped, street seats scrapped as a waste of staff time and energy, and bike share put on ice.
        If the street fee is perceived as permission to keep spending time an energy on non-core issues, it may not get support. I feel like Novick will not make any concessions and I am frankly tired of his leadership style.

        When you are in a hole- stop digging. PBOT needs to stop digging- even with small shovels.

        • EngineerScotty
          June 2, 2014 at 4:14 pm Link

          Why do you assume that bikes and transit are “non-core” issues? There are non-trivial numbers of users of these modes; yet many voters seem to think that these are “extras” that should only receive funding once auto infrastructure needs are fully satisfied.

  5. charlie
    May 29, 2014 at 8:57 am Link

    Maybe in the future there will a day whwn no one drives gas burning automobiles anymore. But that day is ot this day. The vast majority of people still do-raise the gas tax. If it causes a few drivers to switch to something else, thats a GOOD thing.

  6. charlie
    May 29, 2014 at 8:57 am Link

    Maybe in the future there will come a day when no one drives gas burning automobiles anymore. But that day is not this day. The vast majority of people still do- so raise the gas tax. If it causes a few drivers to switch to something else, thats a GOOD thing.

  7. Brian Davis
    May 29, 2014 at 9:54 am Link

    Great perspective on this, Chris. I agree that the gas tax is not a realistic alternative to the street fee, and the notion that it could be is one that has festered a bit too long among many low- / no-car types. I’ve been wondering if part of that problem is that team Hales/Novick/Treat is over-correcting for the overtly pro-bike, grandiose sales pitch that Adams tried and failed. It’s a bit hard to get walk/bike enthusiasts excited to pay to fix roads we weren’t the primary culprits in breaking.

    You make a good point that this is essentially two separate taxes: the household fee and the business fee. I’m glad that the mayor hit the brakes on the latter one to think it through more carefully. One thing that needs to be explicitly defined is whether the “trip generation” that the fee is based upon refers to vehicular trips or person trips. That’s one way the Oregon City model might not work as well in Portland–those two things are probably reasonably similar there, but vastly different here. It would be good to ensure the fee rewarded businesses and institutions for encouraging non-automotive trips. But this would certainly complicate the implementation of the fee.

    The most regressive thing about the fee is that a business that generated 250,000 trips in a month would pay substantially less than one that generated 5,000. Since it seems clear that the former business would need to draw from a much wider area than the latter, these higher trip rates would be correspond to longer and more likely automotive trips which would have a greater impact on the road. I hope this model is also subject to scrutiny as Council returns to the drawing board on the business fee.

    • Chris Smith
      May 29, 2014 at 10:25 am Link

      Brian, you’ve shared some interesting insights into the calculation methods, a few characters at a time, on Twitter. How about rolling those up into a post on Portland Transport?

      I’m inclined to agree that we should be using person trips, not vehicle trips!

      • Blake
        May 29, 2014 at 10:57 am Link

        I will pay the tax if it is passed. I have concerns about the equity of this tax, and I think the business tax is poorly designed. However, allowing them to kill just the business tax will leave the city forced to rely on one-off taxes for everything including basic maintenance, and set a precedent that businesses should be exempt (because who are we kidding, if they don’t pass the business tax now, they won’t later pass one in a different form).

        Each tax may be laudable (even the much maligned Arts tax) but the collection costs are very high and will only get higher the more individual taxes there are. The reliance on these individual taxes that can only be used in one city bureau will make it increasingly hard to govern if there are more funds in one bureau and not enough in another and City Council cannot reallocate the funds from one bureau to another.

        In addition, tax fatigue will set in much quicker the higher the NUMBER of taxes or fees they are hit with, much more so than their overall rate (see, Texas).

        There will be other funding needs in the future in other areas. Rather than set the precedent for more single department taxes, a progressive income tax should be used to fund the project.

      • Brian Davis
        May 29, 2014 at 11:51 am Link

        I was indeed thinking about doing a post that delves into some of the nuances of trip generation. There are a lot of things floating around in the ether about trip generation calculations at the moment, and some of them are even true. It would be good to at least standardize the vocabulary…

    • Anandakos
      May 29, 2014 at 4:08 pm Link

      Brian,

      What exactly is the “Oregon City model”? Can you explain in some detail what it is and why you think it would not be equitably applicable to Portland?

      I’d guess from the sentence which follows the use of the phrase you think it would treat all trips equivalently (implicitly “person trips”) and that you’d prefer that such a tax/fee either be levied exclusively on “vehicle trips” or a a minimum penalize them.

      So I’m wondering why Chris said that he’s “inclined to agree that we should be using person trips, not vehicle trips.” I’m probably missing something, but it sure seems like you don’t think they’re best.

      Now I can see why Chris might think the way he does: transit riders are significantly subsidized by the Tri-Met payroll tax while pedestrians and bicyclists get to use the road system currently for no greater cost than if they didn’t travel at all [e.g. their property taxes]. So there’s clearly an argument for having all trips taxed equally in order to get some “skin in the game” from those groups.

      The question seems to come down to “Should this tax address only one question — road maintenance — or two: road maintenance and modal preference. It;s not an easy one to decide.

      Thank you.

      • Brian Davis
        May 30, 2014 at 10:46 am Link

        The Oregon City model determines non-residential fees based on data from the manual Trip Generation, from the Institute of Transportation Engineers (ITE). They’re hardly the only jurisdiction that does this, but it sounds like Portland is borrowing heavily from their model. They’ve got a pretty thorough FAQ page here: http://www.orcity.org/publicworks/transporation-utility-fee

        I think ITE rates probably correlate pretty well to actual trip rates in Oregon City since there’s little transit and a pretty high modal split for cars except for the small downtown area. Obviously in Portland, this is (fortunately) not the case for large swaths of the city. So there’s the need to define whether by “trips” we are talking about automotive trips, which is really the milieu of the ITE manual, or all trips regardless of mode.

        I guess I’m on the fence between using person-trips and vehicle-trips. If you used the former, it’d probably be defensible to use ITE rates since you don’t have to worry about modal splits, making the fee much easier to administer. This would also preserve the notion that everyone is pitching in roughly equally for the utility of the street. By contrast, using vehicle trips would provide a huge incentive for businesses to reduce automotive travel but this would vastly complicate implementation and would fail to correct many of the issues with the gas tax.

        I agree 100% that it isn’t an easy or obvious decision. This is exactly why I hope to see more discussion around this distinction as the non-residential portion moves forward.

        • Anandakos
          May 30, 2014 at 11:51 am Link

          Thank you. This was a very complete and understandable explanation.

  8. Chris I
    May 29, 2014 at 10:41 am Link

    Charging more for parking city-wide would likely achieve the funding goals of the street fee, without the money wasted on a new administrative structure. The city already knows how to charge for street parking. Charging for parking will reduce auto dependence and improve livability in the city. There will be fewer cars damaging the roads, and more people riding bikes, walking, and using transit.

  9. Alan
    May 29, 2014 at 11:03 am Link

    Frances Footpower already overpays for her street use while Mike Motorist underpays for his, i.e. motorists are subsidized by non-motorists. So, non-motorists already have “skin in the game.” That subsidy also means that the proposed fee is “perpetuating an auto-dependent system.” So much for those points. That leaves only “need the revenue, and it’s not going to come from a fuel tax.” Can’t argue with the first half of that, but the second half is a self-fulfilling prophecy and only true if citizens (and the pols they elect) make it true.

  10. Oregon Mamacita
    May 29, 2014 at 11:52 am Link

    I have skin in the game or rather in the gravel- I recently wiped out on one of Outer SE PDX’s many crappy streets, Now I have some scrapes.

    But, on another note, putting the burden on owners of single family homes- regardless of size or value- and giving a big break to multi-family places (even car-centric apartment complexes and luxury apartments with garages) is a political non-starter.

    BTW- everyone in PDX benefits from the roads because our food and beer and just about everything is delivered by truck. And we all need to pay for the damage the Tri-Met buses do. So- I think the street fee as proposed will fail. It is political suicide to vote for Novick’s plan.

    • Chris I
      May 29, 2014 at 12:40 pm Link

      It’s too bad that your developer chose to not build sidewalks or pave the streets when they built houses there. My developer did, and I had to buy a smaller house so I could have one in a neighborhood with sidewalks and paved streets. If my sidewalks crack, I have to pay to replace them.

      • Jeff F
        May 29, 2014 at 2:11 pm Link

        In my experience, developers include “amenities” like sidewalks because they’re required to do so by the local government. You don’t even need to go to Outer SE to see old, established neighborhoods without sidewalks or finished pavement–check out the Woodstock neighborhood. I don’t think it’s ever because a developer “chooses” to do the work.

      • Oregon Mamacita
        May 29, 2014 at 4:00 pm Link

        Why do you assume I don’t have a sidewalk in front of my house?

        Why do you assume that I have an unpaved street?

        You could have asked how I was- but hey- I guess this is the new Portland.

        But, I am glad you feel so good about yourself.

  11. Syd
    May 29, 2014 at 11:18 pm Link

    Response to above article re:
    —-Change when there is fluctuations in economy —-
    When there are changes in the economy or people buying gas less then, the gas tax amount can be adjustable to maintain the same revenue stream.
    —-”Last driver of a gasoline-powered car has to fund the entire street system”.—–
    As far as your argument about the very few drivers paying for everybody else when there is less car dependence in the future, then when the day comes when there is not enough cars on the road and there is no congestion, then i can see your point. But I think a reasonable boundary on when to few cars on the road are not enough for gas tax revenue, is the day there is no or minimal congestion on the roads. If you have a better way to define the boundary, then please let me know.
    —-Walk and bike exempt from paying tax,
    People that walk and bike pay for the streets, by not being on the streets with a car and using up the space, and allowing car users to enjoy less congestion. Maybe they dont pay with money, but they pay by allowing extra space on the roads, not to mention less carbon emissions. Can a monetary value be placed on these assets?
    —-Fossil fuel (fossilers) paying user and gas tax as paying additional to non drivers.
    Regarding: When you say that Fossilers are paying more then there fair share by paying both user fee and gas tax. The only problem is that the only thing that is increasing is the user fee only, and the walkers and fossilers pay have the same increase. I think that the fossilers should have a higher increase then walkers to encourage less car dependence. I think you have valid concern if there was an increase in the gas tax, parking fees, and the street fees at the same time.
    Thanks for reading my comments
    Hello
    Thanks for your reply.
    —–Thank You
    Please include this code with replies for my spam filter.
    asp ?.
    ————End of current comment——————————

  12. Curtis Ailes
    May 30, 2014 at 7:52 am Link

    Well thought out argument Chris.

    On the topic of the street fee itself, I will pay this and be optimistic that it leads to improvement to active transportation. There are many of us who ride and will continue to ride on the streets whether they have separated lanes or a painted on stripe. But the pragmatic in me hopes that this funding will open up more lanes where those not so inclined to ride on the streets can fully utilize them to get from A to B.

    While it is not a perfect arrangement (is there ever?) it is probably the one with the best chance of not failing when all parties are at the table.

    Compromise rarely ever looks great to anyone

  13. Joseph E
    May 31, 2014 at 4:08 pm Link

    I agree that additional funding for PBOT is necessary, and I support this fee.

    Ideally the gas tax would be raised. Although driving has been slowly declining in Oregon for years, there is still plenty of gasoline being burned. Raising the gas tax to the levels in every other developed country ($4 a gallon) would fund all our transportations needs, while also being a good source for other needs of the state. Even a $0.50 a gallon gas tax would raise much more money than this fee, and the tax could be set to slowly increase to make the decline in gasoline consumption.

    The next best choice would be from property taxes. But the city can barely raise property taxes because of legal limits, and property tax money currently funds schools, parks, fire and police. I would support cutting fire department funding and some administrative costs for the city, but there is not much else in the budget to cut without getting concessions from the unions or cutting needed city services.

    Increasing the price of street parking to market rates would help some, but likely would not raise the $40 million needed a year to keep the streets paved in the long-term.

    I wish our representatives were wiling to raise the local gas tax, or better yet the state gas tax. But without that option, a fee is a reasonable way for people to pay for the streets that provide access to homes and businesses. Perhaps it would be better to charge businesses by square foot, or street frontage, but I the general concept is good.

    My one concern is that a gas tax increase is still needed at the state level, if ODOT is going to be able to maintain all those miles of rural highway. We are still not going to be able to avoid raising the gas tax with this new street fee.

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