Charlie Hales' business-tax hammer: Editorial Agenda 2016

toolbelt.jpg

Portland Mayor Charlie Hales during his 2013 state of the city speech. He brought his tool belt to demonstrate that he intended to help fix up the city.

(Ross William Hamilton/Staff)

Charlie Hales, Portland's lame-duck leader, is nothing if not dramatic. The one-time Mayor Fix-It, who toted a tool belt to an early state of the city address, whipped out a hammer Monday and smashed what remained of his relationship with the city's business community. Despite enjoying record revenues and a multimillion-dollar budget surplus, Hales wants to hike the city's business tax by 14 percent.

Editorial Agenda 2016

The mayor acknowledged the controversy his proposal would generate, The Oregonian/OregonLive's Brad Schmidt reported, but said he "would rather have controversy over doing the right thing, and taking care of the most vulnerable people in the community, versus the controversy of, 'Oh my god, you're raising my taxes.' Pick your poison."

Leave it to Hales to suggest that it's somehow poisonous for the city to live within its means even during a revenue boom. Portland does have plenty of problems, from homelessness and violent crime to decaying roads (for which, by the way, the city is asking voters to approve a gas tax this month). And addressing these problems does cost money. But a better mayor would celebrate the expected budget surplus and propose to allocate it in the most effective way possible without reaching out for even more. That's called restraint, not poison.

Credit Commissioners Dan Saltzman and Steve Novick for spotting -- and acknowledging -- the deeply unserious nature of the mayor's proposal. Saltzman was particularly blunt, saying, "There is not a compelling rationale here, other than, 'Give us all the money we can possibly get our hands on, and we'll spend it for you,'" Schmidt reported. Saltzman does not support the tax hike.

Neither does Novick, who described himself as puzzled. "The lesson I learned on the street fee discussion is you don't roll out a tax and fee increase without doing your homework and outreach."

Such was Hales' lack of outreach to his colleagues that Sonia Schmanski, chief of staff to Commissioner Nick Fish, told Schmidt Monday, "We haven't gotten past the surprise." She did not offer a position on Fish's behalf, as Fish is traveling to visit family in Spain. But on Tuesday, Fish told The Oregonian/OregonLive editorial board via email that he has concerns about how Hales proposes to pay for what's in his budget and will speak with colleagues and stakeholders when he returns before taking a position. Fish tellingly said he'd be "particularly interested in the perspective of Venture Portland and local small business owners."

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Amanda Fritz, the remaining commissioner, has said she won't develop a position on the tax hike until hearing from her constituents.

To pass the tax, Hales needs the support of two colleagues. So far, he has two no votes and two undecideds. The tax seems likely to go nowhere.

But why would the mayor propose to hike taxes on city businesses during a revenue boom without first trying to line up votes from his colleagues? "I think he's, frankly, trying to get at PBA," Saltzman told Schmidt, referring to the Portland Business Alliance. "Obviously, the relationship soured there a long time ago."

To this end, Hales' timing speaks volumes. Businesses in the Portland area already face an effort by Portland State University to establish a payroll tax. Also looming is a possible vote on a massive gross receipts tax on large corporations sought by the state's public employee unions. The businesses that pay this tax would pass along the hurt to smaller businesses, which, by the way, will be adjusting over the next several years to the state's huge minimum-wage hike. Proposing a 14 percent tax hike in this context seems to be a particularly vindictive act.

But credit the mayor with reminding Portlanders during his final months of a quality the city needs in his successor: an eagerness to build relationships with local businesses, especially before asking them for something. This quality is an important one for commissioners to have as well, and to that end the immediate opposition of Novick and Saltzman to the tax hike is reassuring, as is Fish's evident skepticism.