Release: Councilors Novick, Morillo and Dunphy Propose Legislation to Mitigate Cuts to Vital Services and Support Small Businesses

April 3, 2025 

Councilor Steve Novick, along with Councilors Jamie Dunphy and Angelita Morillo, are recommending that, in order to avoid unacceptable cuts to vital city services, the Council should consider increasing the City’s tax on giant retailers by one-third of one percent – from 1% to 1.33% – and directing the increased revenue to the General Fund, which funds police, fire, parks and homeless services. The councilors also ask the Council to consider helping small businesses by raising the exemption from the Portland business license tax from $50,000 to $100,000.

“Five weeks ago, the City Administrator released a budget document which proposed just a fraction of the cuts that would be necessary to balance the City budget. Since then, in forum after forum, we have heard from hundreds of Portlanders that many of the cuts he proposed – cuts to after-school programs, community centers, and youth sports – are unacceptable,” Councilor Novick said. “And yet, to balance the budget, the Mayor and Council would have to cut much more. Since the vast majority of the General Fund goes to police, fire, parks and homeless services, it seems unavoidable that those services are at risk. Faced with those choices, we feel it is incumbent on us to put an alternative on the table for consideration.” 

The tax up for consideration is the same tax used to fund the Portland Clean Energy Fund, which only affects giant retailers with an annual national revenue of $1 billion and at least $500,000 in Portland revenue. The increase is estimated to raise over $60 million per year for the General Fund. 

This giant retailer tax proposal would be paired with legislation to double the business license tax exemption cap from $50,000 to $100,000, bringing it in line with the current exemption level in Multnomah County. This change will help reduce the tax burden for thousands of local entrepreneurs, helping them reinvest in growth, hire workers, and contribute to the city's economic vitality. 

“It’s long past time we stop asking our smallest businesses to carry the same burden they’ve shouldered since 2007. Raising the small business license fee exemption to $100,000 gives real relief to the independent contractors, startups, and family-run shops that keep Portland’s economy moving. This change is about fairness—and it’s funded in a way that protects the parks, public safety, and essential services that Portlanders count on every day. We’re making sure big corporations pay their fair share so our city can keep working for everyone,” said Councilor Dunphy. 

Councilor Morillo added that avoiding cuts to vital services is critical to the City's future. “During our community budget town halls we’ve overwhelmingly heard from constituents that Parks and Recreation is a vital, life saving service for people. For many kids, these recreation programs are where they get their meal for the day if their family is struggling. The connections formed between community members in these public spaces creates public safety. These are vital parts of Portlander’s lives. We cannot afford a decline in the very services that make people want to live, work, and invest here.” 

Portland currently levies a 1% gross receipts tax on billion-dollar corporations to support the Portland Clean Energy Fund (PCEF), which funds efforts to fight climate change and climate resilience initiatives for people of color and low-income residents of Portland. Some City Councilors have expressed interest in taking money from PCEF to help address the current budget shortfall – removing funds intended for such climate projects. The proposed increase of 0.33% would be directed to the city’s General Fund, leaving Portland’s investment in PCEF intact. 

The tax would apply to giant retailers, approximately 1% of which are headquartered in Portland (and even the Portland-based ones doubtless get the vast majority of their revenue from out of state). There are strong reasons to believe that many large, national or multi-national companies have national or regional pricing structures and are unlikely to “pass on” the tax to Portland residents specifically. If some companies did go to the trouble to adjust Portland prices to account for this tax, it would add, for example, thirteen cents to the cost of a $40 item. This tax also excludes everyday items like groceries and pharmaceuticals. 

“We have heard again and again that to avoid an economic ‘doom loop,’ we need to address concerns about public safety and unsheltered homelessness. And we have been reminded that for many Portlanders, parks and recreation services are vital parts of their lives, which tie them to the city. We think protecting these services is an economic imperative,” said Councilor Novick.

 Councilor Novick noted that his purpose today is to put an option on the table for consideration, in advance of the Mayor’s budget proposal on May 7. “If Mayor Wilson presents a balanced budget without unacceptable cuts to public services, I’ll be happy to pull this measure. But if not, then I believe adding new revenue should be a part of the conversation.” 

This proposal is a starting point for additional conversations with community and council members. It will first be discussed by Climate, Resilience and Land Use Committee members during its meeting on Thursday, April 10th at 9:30 am, with opportunities for public comment available at future committee and city council meetings. 

Contact: 

Spencer Knowles 

spencer.knowles@portland oregon.gov