Councilor Novick proposes 0.33-point hike to clean-energy surcharge to help close Portland budget gap

At a Portland City Council Finance Committee meeting April 21, Councilor Novick proposed raising the city's existing 1% corporate clean-energy surcharge to 1.33% and directing the additional 0.33 percentage point to the general fund as a way to reduce planned cuts to police, fire, parks and homelessness services.

Novick said the measure would use the same taxing mechanism voters approved in 2018 for the Portland Clean Energy Fund and estimated it would generate about $66 million a year before subtracting a proposed $3 million increase in the business-license exemption for small businesses and a 10% contingency reserve. "I am not particularly excited about making deep cuts in any of those things," Councilor Novick said, arguing new revenue would make it "easier to come to consensus" on the budget.

The proposal drew immediate pushback from colleagues and staff who raised legal, political and timing concerns. Councilor Avalos said the change would put the Portland Clean Energy Fund at risk by creating a political precedent for redirecting funds voters approved for climate work: "This proposal is the threat, to PCEF," Avalos said. Ruth Levine, director of the City Budget Office, recommended budgeting conservatively and placing a portion of the first year's receipts in contingency because of uncertainty about initial collections.

What Novick proposed

Councilor Novick asked the committee to consider an ordinance that would increase the surcharge paid by very large retailers (corporations with $1 billion national revenue and at least…