Alliance statement on proposed business license tax increase (expanded)



Alliance statement on proposed business license tax increase (expanded)

This week, Mayor Wheeler released his 2018-19 proposed budget, which includes an increase in the business license tax from 2.2 percent to 2.6 percent. It also increases the owner’s compensation deduction to $125,000, a long time Alliance priority.
 
The Alliance has engaged with the mayor for the last three weeks on this issue and has communicated the need for specificity in how the additional tax revenue will be spent and the need to focus the additional revenue on the city’s top priority – homelessness – as well as small business support. Additionally, we have asked that performance measures be established and spending monitored to ensure those measures are met. The proposed budget also reflects a commitment to a 10-year moratorium on further increases in the BLT, as well as a commitment to revisit this increase if economic conditions or the tax environment changes.
 
The Alliance issued the following statement:
The Portland Business Alliance partnered with the Mayor on the proposed increase to the business license tax in his proposed budget. The Alliance has expressed willingness to step up on this tax increase in order to help address Portland’s top issue, homelessness, which impacts businesses and livability throughout the city. Importantly, the additional revenue will be targeted toward measurable outcomes. These include stabilizing and increasing funding for the Joint Office of Homeless Services, adding the ability to place 240 additional families and individuals into permanent housing, and expanding mental health caseload capacity by 50 percent. Small businesses will also benefit from additional revenue focused on supporting underrepresented business owners, including communities of color, low income residents and women, as well as an increase in the owners’ compensation deduction on the business license tax. We are pleased to work collaboratively with the mayor’s office to address these critical issues and appreciate that the mayor shares our focus on economic competitiveness and concerns related to potential additional proposals to raise business taxes.
 
In addition, we expressed concern about the potential for more than one business tax increase over the next year, including the proposed Portland-only gross receipts tax initiative, which would create a costly and divisive ballot fight. The mayor shares our concern and he is working with us to bring the parties to the table to explore an alternative plan to address the concerns being raised by the initiative’s proponents, such as minority contracting opportunities and energy efficiency aimed at underrepresented households, using existing resources.
 
The mayor also agreed with our concern about overly burdensome tax increases on business that could impact Portland’s economic competitiveness, and has included in his proposed budget a note stating that, if other new business taxes are enacted, his budget submission next year will not include the increase to the BLT being proposed today.
 
The Alliance is committed to being a partner to help address the community’s most pressing issue. We will continue to be at the table as the budget is discussed in advance of a vote of the full City Council on May 16.