After nearly two decades of largely failed or aborted attempts, Portland officials are once again exploring ways to permanently raise millions of new dollars for the city’s ailing transportation system.
This time could be different.
A potential tax on residents and businesses known as a “transportation utility fee,” additional charges on utility agencies that damage the public right of way and a surcharge on food and retail deliveries are all under consideration.
The Portland City Council is expected to take up a final proposal within the next month.
City leaders are seeking to close a chronic funding gap within the cash-strapped Portland Bureau of Transportation and slow the ongoing and costly crumbling of streets, sidewalks and other public assets.
Mayor Keith Wilson, who began eying additional options for local transportation funding soon after taking office last year, has already thrown his full support behind the effort. So has Council Vice President Olivia Clark, chair of the council’s Transportation and Infrastructure Committee.
Yet even the most ambitious options on the table — estimated to net up to nearly $47 million annually — are unlikely to turn the tide on a soaring multi-billion-dollar backlog of infrastructure maintenance, the price tag of which officials say grew by $600 million in just the last year.
“We have to do something,” said Clark, whose committee is scheduled Monday to receive a bureau update on the funding project. “Our streets are just going to continue to deteriorate.”
The latest push comes at a critical time for a city government grappling with an array of widening fiscal challenges. It is also an inopportune one for the many Portlanders who are already feeling squeezed financially or increasingly frustrated by what they see as the city’s inability to deliver basic municipal services.
In addition to possible new transportation fees, Portlanders are set to see another round of large water and sewer rate hikes this summer. And they could face a new city tax on streaming services like Netflix and Spotify to help bolster live entertainment across the city.
Years of declining revenue, rising costs and competing priorities and commitments have left the Transportation Bureau, along with its vast infrastructure holdings, in a world of hurt — and residents fuming.
Gnarled asphalt and pernicious potholes mar miles of rutted roads and bike lanes citywide. Street sweepers rarely traverse major thoroughfares. Traffic safety hazards — and fatalities — continue to be stubbornly high. Many city neighborhoods lack sidewalks of any kind or even paved roads.
“I think the conditions speak for themselves, they’re deplorable,” Clark said. “It’s a system failure.”
Many outside City Hall appear to agree. A large survey of Portlanders published by the city last year found residents deeply dissatisfied with the upkeep of streets and sidewalks, ranking street maintenance dead last among municipal services tracked in the survey.
Nearly 67% of those surveyed said streets, sidewalks and transportation should be a top funding priority for the city, second only to the 72% of respondents who gave top priority to affordable housing and homeless services.
Yet only a small portion of the Transportation Bureau’s overall budget each year is earmarked for street maintenance. Last fiscal year, according to officials and city figures, that amount was just over $21 million — or about 3.6% of the $580 million authorized for the agency.
To be sure, much of the city’s transportation funding is restricted to specific projects and other expenses. Meanwhile, current and former city leaders have tasked the bureau with an extensive array of programs and financial obligations ranging from derelict RV and graffiti removal to safety improvement projects to public plaza management to paying off outstanding debt for the Sellwood Bridge.
The bureau’s discretionary fund, which has historically relied heavily on a variety of fixed fuel tax revenues, currently faces at least a $25 million shortfall for next fiscal year, according to city budget documents.
“Revenue is not keeping up with inflation. It’s that simple,” said Hannah Schafer, a Transportation Bureau spokesperson.
The leading proposal under consideration is the transportation utility fee, a monthly surcharge that would be paid by most residents and businesses. With a $12 a month levy per house, $8.40 per apartment and $61 per non-residential and commercial property, Portland could generate up to $46.7 million a year, estimates show. Thirty-one other Oregon cities, including Hillsboro, Lake Oswego and Milwaukie, have some form of transportation utility fee, according to bureau officials.
Officials are also looking at what it is calling a street damage restoration fee that would apply to utility companies, contractors and other entities that excavate or trench in the public right of way. Such a fee, which cities like Seattle, San Diego and San Francisco already employ, could generate up to $22 million annually in Portland.
In addition, transportation officials are also exploring a surcharge of up to 50 cents on individual food or retail deliveries by companies such as DoorDash, Amazon and FedEx. Those could raise as much as $13.5 million a year.
“The delivery surcharges are still very much in the conceptual phase,” Schafer said. “They would still need to be cooked more internally.”
Wilson, meanwhile, has made known his strong preference for a transportation utility fee, saying that it would ensure all Portland households and businesses pay their fair share for upkeep and wean the city off its reliance on federal, state and local taxes on fossil fuels.
At a recent Transportation Bureau event held at Southeast Portland’s Atkinson Elementary, the mayor said he’d vow to phase out the city’s current gas tax — which brings in about $17.6 million annually — should the City Council approve a utility fee. Citing bureau statistics, Wilson also highlighted that more than 65% of Portland streets are now in poor or very poor condition, a figure far higher than most U.S. cities, he said.
“We’re in trouble,” the mayor said. “It is absolutely vital that we repair, that we maintain (our roads).”
Yet city transportation officials concede that while any of the current funding options would provide extra money and stability for the bureau, none of them alone or even combined would begin to reverse years of runaway costs in needed asset repairs.
Records show that Portland’s transportation maintenance backlog now sits at $6.6 billion, a 10% increase over the $6 billion figure the bureau publicly shared throughout most of last year.
“We are not going to be able to wave a magic wand and have streets fixed,” Schafer said. “But injecting more money into the system will allow us to get a little more caught up.”
Previous failed attempts to impose a transportation utility tax have come at a steep price.
Sam Adams, the former Portland mayor, first pursued a street fee while still a city commissioner in 2008 as a way to help chew through what was then a $550 million transportation infrastructure backlog. He abandoned the idea, however, after oil lobbyists targeted the proposal and later polling showed voters reluctant to support it as a ballot measure.
In 2014, as the backlog climbed to $1.8 billion, then-mayor Charlie Hales and City Commissioner Steve Novick pitched a street fee to help pay for repairs and safety improvements. It was later rewritten as an income tax but never won the support of other city councilors. Voters instead passed the city’s 10 cents per gallon gas tax in 2016, renewing it twice in 2020 and in 2024.
In early 2023, then-Commissioner Mingus Mapps, who oversaw the Transportation Bureau, and agency staff briefly floated a transportation utility fee to raise about $35 million annually for road maintenance and upgrades. The bureau’s deferred maintenance price tag at that time was $4.7 billion.
The effort prompted immediate pushback from businesses and residents who at the time were wary of any type of tax or fee increase, spurred in part by the shaky implementation of new voter-approved, specialty tax-funded preschool, homeless services and clean energy programs.
Clark, the council vice president, said she intends not to repeat the actions — or lack thereof — of her predecessors.
“My hope is that, perhaps, at this point in history, there will be more of a willingness to tacklethe problem,” she said.
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