Tuesday, May 05, 2026

What Sort of Tax or Fee Should Fund Local Street and Sidewalk Maintenance?

Portland, Oregon, has a problem. Its streets, sidewalks, street lights, and related infrastructure is deteriorating at a rapid rate. The reason is insufficient revenue from the local gasoline tax an decreases in federal and state funding. So, according to this story, shared with me by reader Morris, the town council is proposing a fee that would be imposed on property owners. The monthly fee would be $12 for a home, $8.40 for an apartment unit, and $61 for commercial properties. A similar proposal failed ten years ago. Other cities in Oregon have imposed similar fees.

The city estimates it needs $6 billion to bring its street and sidewalk infrastructure to fair condition. The proposed fee would raise about $47 million annually. It takes many years of $47 million to raise $6 billion. More than 127 years.

The town explains that "The fee is meant to charge people based on their street usage," and that the lower rate for apartment units is because, "according to the city, apartment residents take fewer trips." That conclusion is highly questionable.

Several of the people who oppose the proposal claim that it is a tax that needs voter approval to be put into place. It is structured as a fee, though the greater the disconnect between the person paying the fee and the person's use of the roads and sidewalks, the more the charge resembles a tax. Landlords explain that the fee would force an increase in rents, an outcome not wanted by landlords or tenants. Business owners in Portland, already facing high taxes, see the fee as yet another hurdle for them to keep operating. Others want the local gasoline tax to be allowed to expire before any other fees or taxes are enacted.

So who should pay for maintaining streets and sidewalks? Though I support the mileage-based road fee, it is difficult to implement at the local level. One reason is that annual or semi-annual odometer readings are recorded by states and not localities. Another is that odometer readings are much more correlated with in-state driving than they are with in-town driving.

So who should pay? Maintenance of streets should be financed by those who use the streets. Someone who lives in a home or apartment in a city does not necessarily own a vehicle and thus does not use the streets. It is true that they receive services, such as postal and other deliveries, from individuals and businesses that use the street, though those service providers can take their street use costs into account when charging for deliveries. What's the best way to measure the street use by those who use the street, especially if a mileage-based road fee cannot be implemented locally? A gasoline tax is flawed, because city residents can purchase gasoline outside the city limits. Would toll gantrys work? They are expensive to install and would be needed everywhere. What about making use of the many traffic and traffic light cameras that read license plates? That's certain to raise all sorts of objections. Perhaps the answer is to consider that Portland streets are used not only by Portland residents but also by non-residents, and that the state should assume responsibility for the maintenance and repair. And the state can fund the costs through, no surprise, the mileage-based road fee.

Sidewalks (or as some call them, pavements) are a different matter. They are not used, or at least are not supposed to be used, by vehicles. They are used by pedestrians, who may or may not even own a vehicle. In the places where I have lived that have sidewalks, it was the responsibility of the property owner to keep the sidewalks in proper maintenance. Ordinances require that the sidewalk be cleared of snow and ice within a specified number of hours after the storm ends. Surely there is no reason that this approach cannot be adopted by Portland.

The challenge facing Portland demonstrates the difficulty of deciding who bears the burden of funding things that benefit society generally when trying to measure each individual's or business's benefit is difficult if not impossible. Balancing what is fair with what is necessary surely requires some degree of compromise. Compromise, though, has been increasingly difficult to attain in current social, political, and economic climates.