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Comment of the Week: The problems with bespoke funding

In a week of strong comments, Charley’s stood out for its even tone and thoughtful analysis. Writing in response to last week’s post about the political tightrope the Portland Clean Energy Fund (PCEF) walks because of unexpected revenue windfalls, Charley broadened his critique beyond PCEF to include a certain type of ballot measure.

This comment is so polished, it’s almost as if Charley was angling for Comment of the Week. And you know something? that’s OK. Put some effort into it, write a short op-ed, that’s what we’re here for.

Here’s what Charley wrote:

PCEF is one example of a taxing and funding policy that has been used to fund popular ideas, but has some real flaws. In short, it would be nice if we could actually direct our local governments’ funding priorities, rather than create these easily mismanaged, bespoke funding mechanisms!

Other examples are the Multnomah County Homeless Services Tax and Portland Arts Tax.

Characteristics:

a voter approved ballot measure, with a bespoke tax, which was marketed to voters as a way to fund a popular priority (such as addressing climate change), and which ends up being used to patch holes in the budget which are caused by the government’s other spending priorities.

It works like this: voters feel that their local governments aren’t adequately addressing some issue (arts funding, climate resilience), and advocates get a ballot measure passed by arguing that the ballot measure will force the City to address the priority.

As I see it, these measures are voters’ attempt to direct a local government’s budget prioritization, because the elected leaders don’t seem willing or able to change the prioritization themselves. Voters could theoretically vote for individual candidates that agree with their preferred policies, but the issues at stake in elections haven’t been specific enough to resolve this mismatch

Practically, all of our local candidates are “for” affordable housing, the arts, and climate resilience. Especially in City Council elections, it hasn’t mattered what a candidate runs on, because the Mayor could put them in charge of completely unrelated bureaus!

Some flaws:

Since these taxes haven’t changed the real priorities of these governments…

The taxes add to the existing tax burden, rather than re-direct funding. We all just pay more taxes, rather than, for example, diverting funding from auto-oriented road projects to bike-oriented projects. The funds are subject to diversion. For example, while the Arts Tax was marketed to local arts organizations as a way to get steady funding, they’ve seen little steady money from the tax, even though the local arts community lobbied the public in support of the measure, and the public understood the tax to be of great benefit to these organizations. Sometimes, governments just literally don’t spend the money (Multnomah County Homeless Services Tax). There’s little democratic accountability. One can’t just vote the Arts Tax out of office.

I seriously think people are fed up that local governments don’t address climate change, fund the arts, or make more housing and would be happy if they perceived that City had made these kinds of things priorities in the budget; they may not be thinking about the total amount of taxation, or the fact that the money will end up going other places!

Thank you Charley. One characteristic of a good comment is that its sparks other good comments. Take a peek at the responses, they are worth reading too.

Original author: Lisa Caballero (Assistant Editor)
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