City Council Unanimously Approves Exempting Construction, Garbage and Recycling Firms From New Clean Energy Tax

The Portland City Council voted unanimously late on the afternoon of Dec. 12 to make significant changes to the 2018 Portland Clean Energy Fund.

Voters approved the measure 65 percent to 35 percent last year, agreeing to impose a new tax on retailers that have sales of more than $500,000 in Portland and more than $1 billion nationally.

The definition of "retailers" in the measure was vague and, after passage, city officials determined it would include large construction companies and companies that pick up garbage and recycling.

That infuriated those industries and led to negotiations between the Portland Business Alliance and City Hall. PBA pushed for exemptions of those industries and revenues from the sale of qualified retirement plans.

In a letter to city council, PBA President and CEO Andrew Hoan said his organization could live with the proposed changes that emerged from negotiations.

"By explicitly exempting the construction industry, the sale of retirement plans and residential garbage service—industries that are not retail by any definition—the amendments take an important step toward aligning the PCES with what the community was informed, in both campaign materials and official measure documents, was a tax only on large retail businesses," Hoan wrote.

The exemptions will reduce revenue from the new tax by an estimated $10 million a year, according to Revenue Division Director Thomas Lannom. The new estimated revenue is $44 million to $61 million.

In council testimony, Oriana Magnera, the climate and energy policy coordinator at Verde, a non-profit that played a key role in promoting the measure, said the coalition of groups behind the Portland Clean Energy Fund could accept the compromise as well but would resist any further tweaks.

"We will fight fiercely if any future erosion occurs," Magnera told the council.

Commissioner Jo Ann Hardesty, who helped create the new tax, said she thought that even though the changes will mean less money, they are reasonable.

"It wasn't until after it passed that we found out the definiton [of retailer] was much broader than we anticipated," Hardesty said before casting a yes vote. "I am the mother of the PCEF and I stake my reputation on making sure it's enacted exactly as we envisioned."

The final tally was four to zero, with Commissioner Nick Fish absent.