It’s a perennial query that politicians running for office face, and we tracked down the answers from the leading candidates for Multnomah County chair, Jim Francesconi and Deborah Kafoury.
The county charges a business income tax of 1.45 percent a year on net income after the first $50,000 a business brings in. The $58 million the tax raises makes it the county’s second-largest source of general fund revenue.
The Portland Business Alliance recently succeeded in lobbying to raise the city of Portland’s owner’s compensation deduction from $90,500 to $100,000, effectively lowering the tax, and wants the county to do the same.
Here’s the how the PBA put it to Francesconi and Kafoury on its endorsement questionnaire:
“We believe that the county Business Income Tax (BIT) and the City Business License Tax (BLT) represent significant disincentive to business investment. Portland City Council recently adjusted the City tax and increased the owner’s compensation deduction to $100,000. Would you match the City’s increase by adjusting the County [deduction] to the $100,000 level?”
Jim Francesconi: No.
“When I was a city commissioner, I did propose phasing the owner’s compensation deduction over time to the $125,000 limit. It was actually my idea. I applaud the city of Portland’s efforts in this regard.
However, as county chair, I would not agree to this for the following reasons. The county government shares a percentage of the business income tax with the cities in east county, specifically Gresham, Fairview, Troutdale and Wood Village. In fact, I would specifically agree to a written agreement guaranteeing these cities an ongoing share of this business income tax rather than holding it over them to be negotiated.
The reason is simple: Their tax bases are approximately 30 percent of the tax base of the city of Portland. This business income tax is a critical source of revenue for them.
The county also is the social safety net that protects our most vulnerable residents, yet poverty has nearly doubled in Multnomah County in the last 11 years. There are already more people in need than we can serve.”
Deborah Kafoury: Yes.
“I believe that the city of Portland and Multnomah County should have the same rate for the owner’s compensation deduction.
As the city of
Portland has raised theirs to $100,000, I support adjusting the county
BIT to the same level. I will enter into conversation with the city of
Portland and with our partners in the smaller east county cities about a
further adjustment. I am particularly interested in the possibility of
the Multnomah County Department of Assessment and Taxation taking over
collection of the BIT and the BLT as this may save money in the long