Mar 18, 2024 - News

Portland Clean Energy Fund plans to dole out millions

Illustration of a landscape made from money, with a one hundred dollar bill as the grass, a stack of pennies and cluster of dimes as a tree, and a quarter for the sun.

Illustration: Annelise Capossela/Axios

A Portland tax that bankrolls clean energy projects is raising four times as much money as originally expected, sparking debate over what to do with the extra cash.

Why it matters: Voters in 2018 approved the Portland Clean Energy Fund (PCEF), a tax on roughly 500 corporations, to pay mainly for nonprofit environmental justice projects like insulating and cooling low-income homes.

  • Now, with the tax expected to bring in $200 million per year instead of only $40 million to $60 million, city officials are considering whether to use the extra money to plug holes in the city budget, for things like replacing streetcars and upgrading the Keller Auditorium.

Catch up quick: The PCEF imposes a 1% tax on corporations that earn more than a$1 billion nationally and more than $500,000 locally.

  • The money goes to private Oregon nonprofits for green energy projects and job training, with the goal of benefiting disadvantaged communities first.

Yes, but: The money has been slow to roll out, causing the city last August to launch a five-year plan to disburse funds more quickly.

The latest: All told, the city projects an unanticipated $540 million windfall from the tax over the next five years.

  • Portland City Commissioner Carmen Rubio, who oversees the Bureau of Planning and Sustainability, wants to spend that $540 million making "greater investments in the city's climate work," including paying for affordable housing projects, per a news release.
  • Of the projects she proposed, the PCEF committee OK'd around $370 million, $100 million of which was for the maintenance of 240,000 right-of-way street trees.

Some city commissioners are interested in using the fund to fill other budget holes and pay for green projects that are already in the works, such as building a "climate-resilient future Keller Auditorium," The Oregonian and Willamette Week reported.

What they're saying: PSU urban studies professor Megan Horst, co-chair of the PCEF's community advisory committee, told Axios she hopes for more collaboration among nonprofit, for-profit and public entities.

  • Horst said her committee had mixed feelings about allocating $260 million to city bureaus. "I don't think we as committee members want to see PCEF just become a city budget."
  • A June 2023 market study estimated it would cost $18 billion to complete energy-efficiency projects for the low-income populations the fund is supposed to prioritize, and $49 billion for all of Portland.

What's next: The PCEF board meets March 21 to discuss its process for considering projects.

Annual revenue and forecasts for Portland Clean Energy Fund
Source: Reproduced from The Oregonian; Chart: Axios Visuals

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