Portland mayor seeks to delay proposed carbon tax after businesses complain

By Shane Dixon Kavanaugh

Portland Mayor Ted Wheeler suggested this week he wants to delay a proposed city tax on major greenhouse gas producers and air polluters as the coronavirus pandemic continues to batter businesses big and small.

The proposed tax, unveiled in November by the Bureau of Planning and Sustainability, would be used to fund an array of local climate change initiatives and would be the first of its kind in the nation.

Large manufacturers, hospitals and colleges and universities would pay most of the proposed tax, documents show. City officials estimate it would raise more than $10 million a year.

Wheeler has previously announced his support for the plan. But the mayor voiced concern Monday that some of the employers it targets have already taken a financial hit from the pandemic, now in its 11th month.

“I’m still 100% committed to clean air. I’m still 100% committed to an air quality program,” Wheeler said during a press conference. “But it may make sense for us to hold off on the increased fee, at least in the near term, until we get through some of the economic fallout from COVID.”

The mayor did not specify a timeline for when he thought the City Council should take up the proposal, which city officials had initially hoped would be enacted by the end of last year. Neither did Commissioner Carmen Rubio, who was assigned the planning and sustainability bureau when she assumed office this month.

City officials have yet to release a final version of the tax plan, an indication that a vote by the City Council was not on the immediate horizon even before the mayor made his recent remarks.

“I know there is a significant amount of interest in this proposal,” Rubio said in a statement Tuesday. “My staff and I are communicating with stakeholders and working with BPS to ensure a thorough process.”

Under a draft proposal of the plan, facilities in Portland that produce 2,500 metric tons or more of carbon a year would be required to pay a fee of $25 per carbon ton annually beginning as early as this month. The base fee would be $62,500.

Additionally, the city would impose an annual surcharge ranging from $15,000 to $40,000 on entities that are identified as “major sources” of air pollution under the Clean Air Act or required to obtain air contaminant permits from the Oregon Department of Environmental Quality.

Health care facilities that fall under either category, however, would be exempt from paying such fees until April 2023 due to the financial strain they face from the coronavirus pandemic, officials said.

Based on those criteria, the city estimates the plan would ultimately generate $11.3 million a year from about 88 businesses, hospitals and colleges in Portland. That money would flow into a pair of newly created funds dedicated to reducing fossil fuel emissions and improving air quality.

City officials received hundreds of responses from Portlanders about the proposed tax during a public comment period that ended Jan. 8. Most of them were in support of the measure.

Portland’s business community, however, has come out forcefully against it, criticizing not only the prospect of a new local tax but also what it says was a hasty attempt to craft the plan without consulting industries first.

“This predictably resulted in one of the worst pieces of proposed policy by any city of Portland bureau in years,” a coalition of business groups wrote to the mayor and city commissioners in a Jan. 6 letter.

Among them were the Portland Business Alliance, Central Eastside Industrial Council and Oregon Association of Minority Entrepreneurs.

“The business community has made it very clear of its concerns about any new taxes and fees during the economic downturn,” Amy Lewin, a spokeswoman with the Portland Business Alliance, said Tuesday. “It’s a relief to learn that the mayor shares those concerns.”

This article appeared on the Oregon Live website at https://www.oregonlive.com/business/2021/01/portland-mayor-seeks-to-delay-proposed-carbon-tax-after-businesses-complain.html


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