Maintaining Portland’s Streets: Funding Options


So having reviewed the challenge of the maintenance backlog for Portland’s street system and looked at some of the common questions around local transportation funding, now it’s time to look at the revenue options for dealing with it.

Here are few that are probably out of the question:

  • City registration fee (not legal in Oregon)
  • Tolls on City streets (don’t make sense, wildly unpopular)
  • Property taxes (would just cause ‘compression’ under Measures 5/50, resulting in no new revenue)

One that’s technically possible, but probably Sam will keep off the table, is a sales tax. A fraction of a cent sales tax has been adopted by lots of cities around the country to help with transportation. But those are all jurisdictions that already had a sales tax. Creating one, and the necessary collection systems, for the amounts we’re talking about would not make much sense. And as we know, Oregonians are downright phobic about sales taxes.

So what’s on the table? Probably one or more of these:

  • Local gas tax – several cities in the region already have them
  • Carbon tax (i.e. based on fuel efficiency for example)
  • Street maintenance fee – again several local cities have them
  • Parking tax – either on all commercial spaces or all paid spaces
  • A bond measure (i.e., capital bond, not subject to compression
  • A payroll or employment tax – this is how TriMet is funded

If I were a betting person, I’d say a combination of a local gas tax and a Street Maintenance Fee is a good bet. A payroll tax might also be a possibility. Collection systems exist for all three of those. The rest may still be a bit ‘out there’ for our electorate.

But we’ll see what happens after the next round of polling. Tomorrow we’ll also look at survey results from the neighborhood meetings.

Watch this space to see how the conversation develops!


26 responses to “Maintaining Portland’s Streets: Funding Options”

  1. Understanding that it is a widely unpopular stance, bridge and/or road tolls is the only fair solution. It forces those who use the system to pay for maintaining it. Revenues from gas taxes are only going to decrease (when you consider revenue per vehicle mile traveled) as vehicles become more fuel efficient or run on alternate fuels. A hybrid car causes the same wear and tear on the roadway as a gas powered car of the same weight, and both should have to pay an equal share of the maintenance fee.

    There is simply no fair alternative to user fees.

  2. road tolls is the only fair solution

    Agreed, but how realistic is it to install toll booths on city streets? Every block? Every neighborhood?

    Many proponents of tolling think that electronic toll collection is the answer – but what about the tens of thousands of cars each day in Portland that wouldn’t have a electronic toll transmitter – are they simply prohibited from entering the city of Portland (outside of state jurisdiction roads such as I-5?) What would be the economic loss from those vehicles/occupants forced to bypass Portland in favor of doing business in Vancouver, Gresham, Beaverton, Oregon City, Tigard, Tualatin, etc.?

  3. There is simply no fair alternative to user fees.

    I don’t agree. In fact, we all are users of the transportation system. And there is no perfect way of allocating all the costs according to who gets the benefit even if we could all agree on what those were.

    I don’t think we want to turn the Willamette river into a barrier dividing the region that you have to pay a fee to cross.

  4. No doubt it would be tough to implement. The OSU-ODOT study for road user fees (aka the “mileage tax”) to replace gas taxes in the state is possibly the best long-term solution, as it uses GPS receivers (not “transmitters” for those concerned about privacy) to determine location. For the short term, as I commented the other day (in “Alternatives to Congestion Pricing [in NYC] don’t Meet Muster”), installing collection facilities at key gateways to the downtown area (ex., Hwy 43, Hwy 99W, SW Broadway, Hwy 26, W Burnside, NW Cornell, Hwy 30, and the Willamette bridges) could reduce central city traffic and increase revenue for transportation projects, including maintenance. The same approach could be used for the city at-large, admittedly with more difficulty. If you drive into the city of Portland on one of the major gateways you would have to contribute to the maintenance of the system. This is still not a true “user fee” as it does not take actual use into account (i.e., miles driven) and no doubt some drivers would use side streets to bypass collection facilities, but diversions could be installed to reduce this or at least seriously delay those who attempt to bypass collection facilities, creating a major time inconvenience that, for most, would not justify bypassing a meager toll.

    Quite honestly, I would support this concept for the entire Metro area, which would make it easier to implement, as there are fewer routes around gateways to the Metro region than there are into the city of Portland from the surrounding suburbs. For example, it would be tough to prevent bypassing collection facilities from East County into outer SE Portland at the city limits (tolls at the I-205 overpasses would work for that, though, but that’s well within the city limits). Installing collection facilities at gateways to the Metro region would also address your concern about business being diverted to the suburbs.

  5. Oops… I kind of left out a few pieces that I had in my comments to the “Congestion Pricing” post the other day. I was already being so wordy with this one today that I pulled out a rather relevant piece of my content before I posted.

    So I’m going to try to keep this short.

    Needless to say, tolls for entering the Metro region at-large would have to include a combination of intra-region collection facilities, essentially resulting in a congestion-pricing strategy on major roadways at points where bypassing the collection facilities would present too great an inconvenience to justify the action.

    I believe that this would be a stop-gap measure for the fifteen to twenty years that it will take to implement the statewide road user fee system.

    I apologize for being so long-winded.

  6. Parking tax + street maintenance fee + congestion pricing + carbon tax could work. None of the fees or taxes need to be very high, and collectively could raise enough money to catch up the backlog and then keep up with all necessary maintenance.

  7. While I totally agree with a city/metro wide tolling system, according to the polling done by the city in January, only about 4% of the population would support it…

    Sure, it may be that people don’t understand how it would work, and with the right campaign you could get it higher, but lets face it, trying to go from 4% acceptance to 50+% acceptance is almost impossible… The fact that a gas tax is even up for discussion, after only 12% voted for it in the last election is actually very surprising…

  8. I can’t see GPS being used to track people’s mileage. It is trivial to block a GPS signal from reaching a receiver by closing off the antenna or the power source. The only way it would even be feasible for most is to integrate it deeply into the car’s systems. That would require closing off the electronics so much that it would be even more difficult for me or a small-shop mechanic to work on my own car. And if it’s just a receiver, how are cars going to be checked for operating equipment? A visit to DEQ/GPS Control? Will I be blocked from crossing the Hawthorne bridge because my receiver is broken?

    Tax all cars and all other users of the transportation system (yeah, bikes too). If you’ve got a lighter and/or a more fuel efficient car, you’re already saving money in gas.

  9. I could get behind raising the gas tax and implementing a commercial parking space tax, assessed by the tax assessor to the property owner and tacked onto their property tax bill as a fee.

    The gas tax is indeed a user fee, as most vehicles require gas to move, and they consume more of it the more they move. I’m not a big fan of the state’s distance/mile tax proposal, as it does nothing to encourage the use of more fuel-efficient vehicles. I think that indexing the gas tax to inflation is the best short-term solution. Long-term, I think there are other, better ways to deal with this issue, like phasing in fuel taxes on alternative fuels after they pass a certain threshold percentage of the market that indicates “establishment”.

    As for the commercial parking space fee, this does double-duty because it also could make landowners recognize the true value of the space that they dedicate to parking.

    A proposal that not only helps to meet the road maintenace backlog, but also helps the region to meet its land-use goals and encourage infill development?

    Now that’s something I can get behind!!!

  10. As for the commercial parking space fee, this does double-duty because it also could make landowners recognize the true value of the space that they dedicate to parking.

    I think the commercial parking space fee is a great idea if it is implemented region-wide. But as a Portland-only tax, I fear it will hit neighborhood retail on the city edges that competes directly with Clackamas and Washington County or the other cities in Multnomah County.

  11. Joseph-

    I don’t have questions about the program, I have concerns. Unless the road user fees are linked to a multiplier, perhaps tied to the weight of the vehicle, I see them as regressive in comparison to a simple gas tax. However, if they were multiplied by the weight of the vehicle (perhaps divided by 1,000 or something), then it would more accurately reflect the true wear-and-tear that each individual vehicle inflicts on the road surface (and, incidentally, on our atmosphere, given current technology).

  12. I would just note that Sam is NOT looking at GPS-based road (vehicle-miles-traveled) fee, that’s a state initiative (which I suspect will ultimately prove to unwieldy to implement).

  13. Chris-

    Thanks for keeping us on-topic. With regards to initiatives that the CoP could implement, the options *are* limited.

    Maybe Sam needs to bring this option up in the context of Metro? Certainly, both the parking space tax and the gas tax would be a lot more effective (and fair) if implemented regionally, rather than just within the city limits.

  14. A local gas tax does not address the need to tax the other users of the roads including transit riders and bicyclists, and therefore does not meet the “user pays” tax fairness principals Sam presented at the meetings. A carbon tax unfairly discriminates against people, families and businesses that need larger vehicles, low income people that have older vehicles and does not tap any revenues from vehicles that pass through Portland but are registered outside Portland. It also promoted Portland residents registering their vehicles outside the city. A street maintenance fee also has the same problem of not collecting revenues from street users that do not live within Portland. A bond measure allows property tax abated properties to get off paying nothing, and some of some those properties are in the highest land value districts of Portland such as in The Pearl.

    Sam also asked for other funding suggestions and ideas at each of the town hall meetings. Each and every time a bicycle tax was been brought forward by someone in attendance. Implementation would require an amount high enough to cover not only the administrative costs, but also contribute a significant amount of revenue approximately equal to the ever increasing amount of dollars spent on bicycle infrastructure in the PDOT budget. If Multnomah County can design an income tax to both bring in revenue and cover the administrative costs, so too can PDOT with a bicycle tax, Additionally, as unpopular as it may be, under the “user pays” tax fairness principals, Sam must also look to increasing transit fares or adding a surcharge to transit fares to help pay for street maintenance. Sam himself said at four of the five meetings, TriMet’s busses (having only two axles) do the heaviest/most damage to Portland streets. Therefore at a nickel, dime or possibly another quarter per ride, the costs for street maintenance can be shared by all TriMet passengers.

    In conclusion, the “user pays” tax fairness principals Sam presented as part of his Power Point presentation must be obtained first by directly taxing the alternative transport user groups that currently do not help pay for street maintenance before any unilateral tax is applied. Then consider which tax encompasses the broadest base of road users from both inside and outside the city, The fairest tax that fits that bill and addresses the most users is a payroll or employer tax, the same way TriMet ridership is subsidized. Such a tax however should only be used for street maintenance. Capitol projects should be the direct responsibility for each user group – bicycle infrastructure paid for only by a tax on bicyclists and bicycling, transit projects paid by transit users through the farebox, and highway improvements that improve motor vehicle travel and capacity paid by motorists, motor freight carriers, and since good roads can be used as a development tool, possibly a commercial parking tax.

  15. Once again, Terry, I’d be happy to have a system whereby everyone pays their way. If drivers pay me $1000 a year for the health care costs I’m saving by being active on my bike, and several hundred dollars a year for the air pollution I have to breathe, and several hundred dollars for the global warming impacts, I’d happily pay a few bucks for bike lanes.

    I’m tired of subsidizing drivers (though, yes, I am one).

    And as a cyclist, I pay for street maintenance through my property taxes, through my registration fee, through my gas taxes, through my income taxes, and through my sewer bill.

  16. Capitol projects should be the direct responsibility for each user group

    Ah yes, that firm belief in collective group responsibility as long as its the other folks in the “group” paying the bill. Why am I, as a motorist, responsible for paying for auto facilities that are only needed because other people want to drive their personal vehicle to work? What is needed is a commuter tax. Perhaps the solution is to expand the payroll tax for transit to pay for auto commuting facilities as well. The tax could be adjusted based on the mode split of a business’s employees.

  17. Why am I, as a motorist, responsible for paying for auto facilities that are only needed because other people want to drive their personal vehicle to work?

    Ross,

    You chose to be a motorist, right? That means that under the law in Oregon, you choose (it was not forced upon you) to pay the associated vehicle registration and drivers licensing fees for the privilege (not right) to operate your motor vehicle.

    In order for your vehicle to function, you must purchase a fuel which is taxed on a per-gallon amount. If you drive a lot, you burn more fuel, and thus pay more in tax. Don’t drive much, don’t pay much.

    So, you are absolutely right – as a motorist, you pay for facilities that you use in order to operate your vehicle. If you want to bitch and moan about it, sell your vehicle(s), and take the nearest TriMet route to a DMV (there’s even one on North Interstate accessible by Interstate MAX! There are several others that are accessible by bus, but given how much everyone here hates the bus…) and surrender your license. There – you are now free from all of those pesky road-supporting taxes that you hate so much.

  18. If you drive a lot, you burn more fuel, and thus pay more in tax. Don’t drive much, don’t pay much.

    That isn’t the way it works is it? How much you pay depends on how much fuel the vehicle burns, not how far you drive.

    And the new extra facilities are needed because of when people choose to drive, not how far they drive. So there is an almost complete disconnect between what is paid in gas tax and the actual need for facilities.

    You chose to be a motorist, right?

    Yep. Its like every other sales/luxury tax, you only pay it if you choose to buy.

    As a motorist, you pay for facilities that you use in order to operate your vehicle.

    I also pay for facilities I don’t use. But by lumping me into the group “motorist” instead of “commuter”, I get forced to pay for the extra facilities that are needed only by “commuters” who drive their own vehicle to work as “motorists”. And some apparently think they have an unlimited entitlement to that subsidy. If the road gets crowded when they are driving, I am responsible for paying more to widen it for them.

    There – you are now free from all of those pesky road-supporting taxes that you hate so much.

    I am not objecting to paying for roads. I am objecting to paying for extra road capacity that is only needed for commuters. Your answer seems to be that if I don’t want to subsidize other people’s irresponsible commuting choices, I can just quit using an auto entirely.

    But if I buy gas to go to the lumber yard or to drive around forest service roads in eastern Oregon, I am going to have pay for extra capacity for commuters that I don’t need and never use and that is being built solely for their convenience.

  19. But if I buy gas to go to the lumber yard or to drive around forest service roads in eastern Oregon, I am going to have pay for extra capacity for commuters that I don’t need and never use and that is being built solely for their convenience.

    So in other words you want your gas tax dollars to support only what you use, right? Then I am sure that you are in 100% agreement that the exact same principle should be applied to TriMet as well.

    60% of TriMet riders use the bus system. Therefore, 60% of TriMet’s budget should go towards the bus service. Today, 90% of TriMet’s capital budget goes towards building MAX and the bus system gets a measly 10%. Surely that isn’t fair to the 63 plus million TriMet bus riders, is it?

  20. I don’t follow. If only 60% of Tri-Met’s riders use the bus system, that means 40% only ride MAX or MAX + Streetcar. The 60% who use the bus system are heavily Bus + MAX riders. Every bus rider that I know uses light rail for at least some of their trips.

    What’s wrong with putting significant capital funds into a system that nearly every Tri-Met rider uses?

  21. “60% of TriMet riders use the bus system. Therefore, 60% of TriMet’s budget should go towards the bus service.”

    I believe that something like 80% of the operating budget goes to buses… Personally, I don’t think they should cut bus service to get that down the the 60% level, but if that is what you want TriMet to do, I guess we are just going to have to disagree on that one…

    “Surely that isn’t fair to the 63 plus million TriMet bus riders, is it?”

    Uhmm, well, I guess cutting bus hours would be fair, but that doesn’t make it a good idea. But whatever you are into…

  22. So in other words you want your gas tax dollars to support only what you use, right? Then I am sure that you are in 100% agreement that the exact same principle should be applied to TriMet as well.

    No, Erik. In fact, I think the “user pays” claims are mostly attempts to justify road expenditures on the basis of phony “equity” claims that can’t be defended on any other basis. The fact is I don’t stop being a transit user or bicyclist when I get in my motor vehicle and vice versa.

    I choose the mode appropriate to the trip I am making. But I also choose it, in part, based on the burdens it creates for everyone else. The fact is that walking, biking or using transit have much lower public burdens than motor vehicles. And, as public policy, we ought to do everything we can to make those modes more attractive for more trips.

  23. I believe that something like 80% of the operating budget goes to buses… Personally, I don’t think they should cut bus service to get that down the the 60% level, but if that is what you want TriMet to do, I guess we are just going to have to disagree on that one…

    Ironically, had TriMet properly invested in the bus service we’d have hybrid busses (which would reduce fuel expense) and articulated busses (which would allow greater capacity, without expanding labor expense). By allowing neighborhood bus routes to be contracted out, labor expense (for the shorter routes) could be reduced as well.

    So, yes, I am in favor of decreasing TriMet’s bus operating costs. TriMet appears not to be so interested, however, and can use that to further decry additional bus service and investment.

    By the way, check your facts. They’re publicly viewable at TriMet’s website, and you’re wrong. You also fail to include the financing costs TriMet incurs on MAX projects/bonding authority, that somehow is not attributed towards MAX.

    The 60% who use the bus system are heavily Bus + MAX riders. Every bus rider that I know uses light rail for at least some of their trips.

    Based on what statistic? Are you stating that I am the ONLY person that doesn’t touch MAX as a part of their commute? Nearly everyone on my bus does not connect to MAX, and I’m on one of TriMet’s busiest (and a frequent service) bus routes.

    60% of TriMet’s ridership uses the bus. Are you saying that it’s OK that if you have to ride the bus you should expect poor service, but if you ride MAX you should get a limo ride? Or that busses should only be connectors? In that case we better CANCEL every frequent service line, because every frequent service line is not a MAX connector route.

    By looking at TriMet’s ridership statistics on their website, it appears that MAX originating rides is 27.2M vs. boarding rides of 32.6M. That can only mean that 5M of the 32.6M MAX riders – one out of SIX – originated on a bus. Meanwhile, for the bus system 47.7M originated on the bus, compared to 63.1M that rode a bus. Less than one out of THREE originated on the train.

    That’s hardly a majority.

    What’s wrong with putting significant capital funds into a system that nearly every Tri-Met rider uses?

    I ask myself the same question each day. What’s wrong with putting significant capital funds into a system (busses) that nearly every TriMet rider (60% plus) uses?

    But TriMet and Metro seem to think it’s wrong.

    I choose the mode appropriate to the trip I am making.

    But for many, the mode appropriate for the trip is a private motor vehicle. Heck, even TriMet thinks so – just look at the parking lot at the capital planning offices at 7th & Multnomah right next to the MAX tracks, and the parking lot at Center Street Garage. And so does Metro with their publicly financed parking garage.

    If TriMet/Metro want to tell me how to commute, then they need to lead the example. Otherwise they are expecting someone else to make a change so that they may do as they wish (“do as I say, not as I do”), and that’s hypocritical at best.

    I’m glad you stand up for making a right decision but as public policy, TriMet and Metro have a policy to disinvest in the bus service, and take dollars that are supposed to go towards systemwide transit and puts it in the hands of private developers in downtown (SoWa, Pearl). That means folks in Forest Grove, Cornelius, Sherwood, Tualatin, Tigard, West Linn, Oregon City, and numerous other towns pay for a service that TriMet and Metro intentionally does not provide, yet being legally required to do so. Is that fair? Or should the solution be to break up TriMet?

  24. But for many, the mode appropriate for the trip is a private motor vehicle.

    For a lot of trips its appropriate only because there are no alternatives. For others its appropriate only because we have failed to provide attractive alternatives. And for a lot of commuter trips, it isn’t appropriate at all. Its just a very expensive convenience where much of the cost is shared by everyone.

    Again, the fact is that walking, biking or using transit have much lower public burdens than motor vehicles. And, as public policy, we ought to do everything we can to make those modes more attractive for more trips.

  25. at means folks in Forest Grove, Cornelius, Sherwood, Tualatin, Tigard, West Linn, Oregon City, and numerous other towns pay for a service that TriMet and Metro intentionally does not provide,

    That simply isn’t true. All of those communities are connected to the transit system. And the employers in those communities who pay the transit taxes get benefits from a transit system that relieves congestion on the road network even if their employees don’t make direct use of transit.

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