What You Need To Know About Portland Clean Energy Measure 26-201

Sep 20, 2018
Originally published on September 23, 2018 9:58 am

This November, Portland voters will decide whether the city should tax certain businesses to create a clean energy fund.

The measure is referred to as the Portland Clean Energy Community Benefits Initiative — or the Portland Gross Receipts Tax, depending on who you ask.

Proponents of Measure 26-201, which will formally show up on ballots as the Portland Clean Energy Community Benefits Initiative, say the city needs money to fund clean energy projects if it's serious about meeting its clean energy goals.

To do that, its backers are turning to businesses. Proponents of the measure say they're the ones who have the financial resources  — and obligation — to support the goal of decreasing carbon emissions while maximizing community benefits like job training. Proponents expect it to raise more than $30 million annually for clean energy projects, green jobs and other projects.

Opponents say the people the measure is supposed to help will only be hurt by it. The measure imposes a 1 percent surcharge tax on certain companies doing business in Portland, a tax opponents say will impact business choices and eventually pass down to consumers at the cash register. They say the measure will contribute to the affordability crisis in Portland, and that a tax on businesses isn't the best way to deal with climate change.

What Is The Question Before Voters?

Should large retailers pay a 1 percent tax on the revenue they generate in Portland to fund renewable energy projects and job training?

Which Retailers Will Be Affected?

The measure aims the tax at businesses that make more than $1 billion in gross revenues nationally and $500,000 in Portland. The 1 percent tax will apply to the gross revenue made in Portland.

The tax will not apply to groceries, medicine or health care services.

Who's Behind The Measure?

The measure's supporters are a motley group of environmental and culturally specific organizations. Its steering committee includes Verde, the Coalition of Communities of Color, the Asian Pacific American Network of Oregon, the Portland branch of the NAACP, the Audubon Society of Portland and the Oregon chapter of the Sierra Club.

The measure has even gotten the attention of CNN political commentator Van Jones.

What Do They Want?

Supporters say the city's adopted Climate Action Plan needs money behind it if it wants to meet its goal of powering 100 percent of the community's electricity needs with clean renewable energy by 2035.

So they're looking at businesses, who they say have an inherent financial responsibility to support the city's climate goals. Proponents of the measure say businesses are a significant contributor to carbon emissions in manufacturing, shipping and supply chain practices.

It's also no coincidence that cultural organizations are supporting the measure; proponents say climate change has a disproportionate impact on low-income communities and communities of color. Money from the fund will prioritize clean energy project and job training in those communities.

Who's Against The Measure?

The Portland Business Alliance, which has more than 1,900 members that include well-known retailers and airlines, is against the measure. Eighty percent of the alliance's members are small businesses, said Andrew Hoan, president and CEO of the Portland Business Alliance.

"This is a big tent chamber of commerce," Hoan said.

The South Portland Business Association and the Taxpayers Association of Oregon are against it, too. Even the progressive-leaning advocacy group Tax Fairness Oregon has come out against the measure.

Why Are Opponents Against The Measure?

In a position paper on the measure, Tax Fairness Oregon says the proposal could obstruct future attempts to reform statewide business taxes.

"If the initiative fails, regardless of the reason, opponents will claim that taxing big business is unpopular and make it even more difficult for the legislature to pass a statewide tax just like the failure of M97 made the legislature’s task harder," the position paper states.

But for the most part, opponents are rallying behind the concept of keeping Portland affordable, perhaps a jab at elements of the measure that its supporters tout (20 to 25 percent of the clean energy fund will be prioritized to job training for low-income people of color, for example). They say the tax on businesses will trickle down to everyday people who live, work and shop in the city of Portland.

"To translate very unequivocally: a gross receipts is a consumer tax," Hoan said. 

"It is a regressive tax that will be borne ultimately by the people who truly can least afford to pay for it."

Will The Tax Really Trickle Down To Consumers?

The City Club of Portland, which voted to endorse the measure, released a report concluding there's no evidence to support this.

"While the arguments against the PCEF mentioned the potential trickle-down effect of the surcharge to consumers—thus unfairly distributing the tax—the committee found no evidence that this would, in fact, occur," the report states.

Hoan with the Portland Business Alliance said a small business may not be a direct target of the tax, but the goods and services a business may use to run a business — real estate, advertising and marketing services — could be.

"They'll have to raise the prices of their goods, and if they raise the prices of their goods they may lose customers," Hoan said. "It's economics 101."

Proponents of the measure say the financial impact will be minimal, but the social impact will be huge — especially for communities of color.

"We recognize that inequality and the climate crisis are interconnected and that we can actually create good jobs while taking climate action at the same time," said Khanh Pham, manager of immigrant organizing at the Asian Pacific American Network of Oregon.

"There isn’t this false choice businesses want us to create between jobs and the environment."

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