Mayor Ted Wheeler’s last-minute city budget amendments left Portland transportation stakeholders feeling like they've had the rug pulled out from under them. Now, they want every Portlander to know: The city’s transportation system is in trouble and the effects will have far-reaching impacts.
Wheeler’s plan to reduce utility fee increases and halt plans for a 40-cent parking meter price increase was spurred by his concern that people are leaving the city because it’s too expensive to live here. He said he thinks people will be more likely to stay if they weren’t saddled with additional utility and parking fees.
“These increases are choking the life out of this community,” Wheeler said at a May 17 City Council meeting. “Studies now show that people are choosing not to stay here.”
The 40-cent hourly parking meter increase was approved last year by members of City Council—including Wheeler. To the Portland Bureau of Transportation (PBOT), this plan was a lifeline to keep the bureau’s dwindling budget in check. It was expected to rake in about $24 million for PBOT in its first five years, revenue the bureau says it is in dire need of, given the losses it suffered during the pandemic.
Commissioner Mingus Mapps, who oversees PBOT, firmly rejected Wheeler’s proposition. He ultimately negotiated for the additional parking fee to be cut to 20 cents an hour, instead of scrapping it altogether.
Before the budget vote, Mapps said he was “mystified” by the mayor’s amendments, adding that it “doesn’t pass the smell test to say the reason why people are leaving the city is because of parking meter rates.”
“If we continue down this route, we’re talking about layoffs at PBOT of more than 100 people, maybe many hundreds of people in the next couple of years,” Mapps said. “I'm not against belt tightening and reimagining how we do our work. But if one of the expectations of the people of Portland is that they pay their taxes and get good services, I can guarantee you this is going to undermine our ability to provide the people in Portland with transportation services.”
The conversation at City Hall last week revealed challenges for PBOT that go much deeper than just one parking meter fee. It could also herald a transformation in how PBOT officials communicate about budget problems with the public.
“It's important for everyone on this council and [in] Portland to know that PBOT is on life support,” Mapps said at the meeting. “If we do not begin to support it… we pull the plug.”
How PBOT is funded
Portland transportation insiders have long been calling for the city to reassess PBOT’s funding streams, which are rapidly dwindling. They also want the public at large to be more aware of PBOT’s budget crisis and how it will impact everyday Portlanders.
“A lot of folks don't really understand how the transportation system is funded or where the money is going,” Shoshana Cohen, PBOT’s intergovernmental, resources and policy affairs manager, said at a May 18 PBOT Bureau & Budget Advisory Committee (BBAC) meeting.
Right now, PBOT is mainly financed by a mix of parking fees, city and state gas taxes, state motor vehicle registration fees, and federal grants. These funding sources keep the bureau reliant on people driving and parking gas-powered vehicles, which sustainable transportation advocates say is directly contradictory to PBOT’s climate and equity goals.
“We're beholden to a system where you as a bureau have a key role to play in transitioning us out of the fossil fuel economy," BBAC member Ignacio Simon said at the May 18 meeting. "But instead, everything from your revenue down to your mentality is still completely tied to a system that has destroyed the planet.”
“I try to ascribe good faith motives to people I disagree with, but it’s hard to see one here that isn’t just rank political pandering to business interests.”—James O’Laughlen, Local 483
In 2016 and again in 2020, Portland voters approved the Fixing Our Streets gas tax, which consists of a 10-cent per gallon fuel tax and a Heavy Vehicle Use Tax used for street paving, filling potholes, improving lighting, and more. PBOT leaders hoped this funding would make a dent in the bureau's $4.4 billion maintenance backlog, and while staffers say the gas tax has helped the city avoid the worst maintenance outcomes, the list of unmet needs on Portland's streets continues to grow. And as electric vehicles become more ubiquitous in Portland, fewer dollars will flow into the gas tax fund.
In 2021, City Council accepted the Pricing Options for Equitable Mobility (POEM) report, which recommends a suite of potential new fees for people driving in Portland, which PBOT can use to invest in multimodal and sustainable transportation options. Based on POEM recommendations, PBOT implemented a flat 20-cent Climate and Equitable Mobility Transaction Fee on all parking meter transactions last summer.
PBOT officials say programs like the Fixing Our Streets gas tax and POEM serve dual purposes. According to PBOT, POEM fees are intended to “send a price signal about the costs of driving” and “help people consider the impact of their travel choices and encourage certain behaviors.” But the bureau also uses the money generated from the fees for crucial programming, like the Transportation Wallet program and Biketown For All.
At the May 18 BBAC meeting, Cohen said PBOT wants to shift its ethos around funding.
“We don't want to be beholden to parking fees and fossil fuels to fund the bureau…. We want to use pricing to manage the system,” Cohen said. “We have a ways to go between here and there.”
In addition to being reliant on driving fees, PBOT’s funding mechanisms are also unreliable, as evidenced by the hit the bureau took when people’s travel behavior changed during the pandemic.
In PBOT’s Fiscal Year 2023-24 requested budget, Mapps laid out the dilemma to the rest of City Council.
“PBOT continues to be in a state of revenue crisis. The pandemic has significantly impacted PBOT’s revenues, resulting in losses of over 18% of expected General Transportation Resources over the last three years,” Mapps wrote. “PBOT needs revenue sources that are stable, not reliant on fossil fuel consumption, increase with inflation, and able to be controlled at the local level.”
Another hit to PBOT morale
Amid dwindling revenues, the transportation bureau is also trying to maintain staff. Earlier this year, workers from Laborers’ Local 483 went on strike to demand cost-of-living increases and wage adjustments to keep their pay competitive with the private sector. Local 483 and the city agreed on a new contract a few days after the strike began, but tensions remain.
To PBOT workers, Wheeler’s proposed rate reductions are another example of how Portland utility employees aren’t treated fairly by the city. Concerned about potential layoffs resulting from the budget crisis, Laborers’ Local 483—which represents employees from PBOT, the Bureau of Environmental Services and the Parks Bureau—expressed their disapproval of Wheeler’s suggestion.
“There will be consequences of this rate reduction for years to come. It doesn’t benefit Portlanders like Mayor Wheeler has said. The rate reduction will save Portlanders about $2 a month, but it will cost the City through layoffs and deferred projects,” Ryan Sotomayor, business manager of Laborers’ Local 483, said in a press release. “Nothing about this rate reduction keeps our shared interests in mind. Our City Council must prioritize its current residents and the services they rely on, not visitors to Downtown Portland.”
“I try to ascribe good faith motives to people I disagree with, but it’s hard to see one here that isn’t just rank political pandering to business interests,” James O’Laughlen, field representative & organizer for Local 483, told the Mercury. “These cuts aren’t going to save anyone money. They’ll just hurt the city’s ability to provide essential services and undermine the relationship with the employees even more.”
One PBOT employee who asked to remain anonymous told the Mercury that while she is proud to work for the city, she wants to see more support from city officials.
“I’m very proud to work for PBOT. To see our politicians side with businesses and developers who are always going to find fault is disappointing,” she said. “To be the mayor for so long and not really bother to have an understanding of what different bureaus do is disappointing… I’d expect that our commissioners and the mayor would understand that our staff work hard for them.”
The path forward
PBOT officials and advisors have suggested several possible new funding sources over the years. In 2014, then-Mayor Charlie Hales and PBOT Commissioner Steve Novick proposed a transportation utility fee—also known as a “street fee”—that would issue a monthly flat charge to Portland households dedicated for PBOT use. The proposal was controversial and ultimately failed. Earlier this month, Mapps backed a new iteration of the transportation utility fee, but in the current political climate, PBOT staff know a new charge will likely be a non-starter. They hope to resuscitate the idea at a later time.
Members of BBAC have proposed the city allocate more cannabis tax and general fund monies to PBOT. They’ve also recommended exploring “new, nontraditional funding options” from sources like the Portland Clean Energy Fund (PCEF). PCEF earns revenue to fund decarbonization projects from a tax placed on large businesses and has set aside $100 million for transportation over the next five years. The fund will also contribute $10 million for transportation improvements on 82nd Avenue.
Many transportation advocates have commended Mapps for how he’s handled negotiations with Wheeler and advocated for PBOT.
“I’m encouraged that Mapps was able to maintain some of the rate increase, otherwise I think it would’ve all been rolled back,” BBAC member David Stein told the Mercury. “His ability to advocate on behalf of PBOT to minimize the damage is encouraging.”
O’Laughlen expressed a similar sentiment.
“I’m pleased that the utility commissioner is more than well-informed enough to recognize the foolishness of this course of action,” O’Laughlen, the union rep, said to the Mercury. “His office’s response to these last-second changes were in lockstep with [the union’s]. It’s unnecessary, costly to the workers and the public, and going to create short and long-term problems.”
Advocates also say this moment is an important opportunity for PBOT officials to be firm with other policymakers and demand more to keep the city’s transportation system afloat in a sustainable way. This could mean cutting key programs in an effort to show the public just how important PBOT is for everyday Portlanders.
“PBOT’s been doing a good job over the past several years trying to MacGyver everything together so it looks like everything’s okay enough, and that’s led us to what happened [with Wheeler’s amendment],” Stein said at the May 18 BBAC meeting. “I’m inclined to say, to a degree, blow it up. Because the longer PBOT appears to be functioning, the longer people like Mayor Wheeler are going to be able to make decisions based on [that appearance].”