How does the payroll tax increase (Senate Bill 34) affect TriMet and will the extra money help offset our current budget shortfall?

Senate Bill 34, which is expected to be signed by Governor Kulongoski, is an authorization to TriMet and Lane Transit District’s board of directors to phase-in a payroll tax increase of 0.1% (up to 0.8%) over a ten-year period, but not until there is an economic recovery.  The transit agencies may adopt an implementing ordinance after the required public hearings are held, and after making a finding that the economy in the district has recovered.  After the board of directors approves an increase to the payroll tax the measure may be referred to the voters by initiative petition.

Why is authorization important if the payroll tax can’t be implemented until the economy recovers?
In order to compete for federal discretionary transit funds in the current session of Congress, and to meet ridership demands, an increase in the payroll tax authorization is necessary.  Transit providers must demonstrate 20-years of future operating capacity in order to obtain these funds; payroll tax authorization to 0.8% does this.  TriMet and Lane Transit are competing with transit agencies from Los Angeles to New York City.  Congress and the Obama Administration view public transit as a key element in achieving America’s goals of energy independence and reducing greenhouse gas and other environmental pollutants.

Why is the payroll tax important?
TriMet receives almost 55% of it’s funding from the employer payroll tax.  With demand for public transit outstripping the region’s ability to provide it, an authorization to increase the employer payroll tax will enable future capacity and, when competing for federal capital funds, will help demonstrate 20 years operating capacity.  This future operating capacity is a requirement by the Federal Transit Administration for federal discretionary matching funds for future capital projects such as light rail and bus rapid transit.  Without this capacity TriMet and LTD will not be able to compete with other transit agencies.

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Comments (1)

  1. nottionged1973

    Sometimes the management of funds and taxes safe the economy of the state automatically. The article writer is also expert in cv writing and he can also write for addressing his views about the concepts behind the taxes.

    September 19, 2016