Multnomah County is looking at a familiar government problem with an expensive sports twist: how to pay for a $101.6 million pledge tied to the expected $600 million renovation of the Moda Center without leaning too hard on taxes residents and visitors already pay.
At a public work session Tuesday, county chief financial officer Eric Arellano laid out four possible ways to cover the county’s share. The options ranged from doing nothing on taxes to raising the rental car tax by 1% or 1.25%, or increasing the hotel tax by 1%.
County commissioners agreed Aug. 6 to contribute to the renovation, but they still have not decided how to pay for it. The county’s piece is only one part of a larger deal that remains unsettled, and Portland’s top administrator was in Texas last week meeting with new Trail Blazers owner Tom Dundon as the city tries to move negotiations forward on a new 20-year lease for the city-owned arena before a critical December deadline.
Arellano urged commissioners not to go after the local hotel tax. He pointed out that the 13% rate is already above the national average, while occupancy levels still have not fully bounced back to where they were before the pandemic.
“And though we’ve seen some increased occupancy downtown and room rates are slightly starting to grow, it’s been slow, slow progress,” he said.
By contrast, he said the 17% local rental car tax sits about 2 percentage points above the national average, but is still below some of the highest rates in the country. Even with a 1% to 2% increase, Oregon would not crack the top 10, and rental car business has “recovered really well” since the pandemic.
That helped make the case for Commissioner Julia Brim-Edwards.
“To me, the only viable option is the increase in the motor vehicle rental tax,” Commissioner Julia Brim-Edwards said.
Arellano also ran scenarios that used half, or all, of the $35 million in tax revenue the county expects from the sale of the Blazers. But that approach has already run into resistance. Three of the five commissioners previously voted against using that money, arguing it could be needed for other county services.
“We really landed in a place of not wanting to use things that we might use for services,” Commissioner Shannon Singleton said.
There was also little appetite for raising the hotel tax.
“I’m glad to hear that there’s kind of a shared consensus of not going after an increase to the transient lodging tax,” Chair Jessica Vega Pederson said. “I do think it’s always good to look at all the options.”
One frustration hung over the presentation: none of the funding models included any money flowing back to the county in return for its contribution. The county’s August resolution called for revenue that could include a payment to offset the lost property tax revenue.
“We passed a resolution saying that we expected … them to come up with a revenue stream,” Brim-Edwards said, adding, “If we don’t get it, we’re going to reduce.”
A public hearing and final vote on the funding plan have not yet been scheduled.
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