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PORTLAND, Ore. (PORTLAND TRIBUNE) — Questions continue to swirl around the legality of the income taxes that Metro is planning to begin collecting on July 1 to fund homeless services.

The $250 million-per-year ballot measure was approved the elected regional government’s voters at the May 2020 primary election. But the Multnomah County Circuit Court has not yet approved Metro’s request to validate the legality of its rules to collect the taxes. In fact, a court hearing on a challenge to the rules is set for June 21, a little more than a week before individuals, couples and businesses become liable for them.

Despite that, Multnomah County Chair Deborah Kafoury has included $55 million as the county’s share of the taxes in the budget she is proposing to take effect on July 1. She says the money will greatly reduce homelessness in the county by providing needed services to the homeless and those at risk of homelessness. It is expected to increase to $100 million in future years.

The challenge was filed by a coalition of businesses and business organization, including the Portland Business Alliance. They agree Metro has the right to collect the taxes approved by the voters. But they argue the rules must be the same as the Oregon Department of Revenue’s rules for collecting such taxes. Metro’s rules are different, meaning businesses in the region must pay the cost of filing different returns and could pay more taxes than the state would collect on the same income in some cases.

Metro admits that its rules are different, but argues they are legal because they were adopted under the home rule charter approved by voters in 1992. Both sides have submitted lengthy and detailed files arguing the fine points of numerous court rulings on tax law and the authority of home rule charters.

Judge Steffan Alexander will conduct the hearing remotely.

The measure was approved at the May 2020 election by a majority of voters in all three counties within Metro’s jurisdiction. It will collect a 1% income tax from people who make $125,000 annually or couples who earn $200,000 combined. It also includes a 1% tax on businesses that generate $5 million annually.

The funds will be distributed to Multnomah, Washington and Clackamas counties to support services to help prevent people at risk of losing their housing in their homes, and to keep the chronically homeless in their subsidized housing. The counties must submit plans for spending their share of the funds to Metro for approval.

The measure took effect on Jan. 1. Metro is contracting with the city of Portland to collect the taxes.