MultCo Board of Commissioners consider delaying Preschool for All tax increase
PORTLAND, Ore. (KOIN) — The Multnomah County Board of Commissioners pushed forward a plan on Aug. 29 that would delay a 0.8% tax increase scheduled to go into effect in 2026 for the Preschool for All program.
The voter-approved program, which provides free preschool education to a growing number of children in Multnomah County each year, generates funding by taxing the wealthiest 9% of Multnomah County’s earners. The program takes 1.5% of all taxable income from individuals making a minimum of $125,000 per year and joint filers making at least $200,000. An additional 1.5% tax is imposed on individuals making more than $250,000 a year, or couples making more than $300,000 per year.
The program, which currently serves more than 2,000 preschool students across the county, has generated a surplus of more than $200 million since the measure passed in 2020. The plush reserves have caused pushback from taxpayers asking that the county either spend the funds or ease up. The county has maintained that the reserves are a temporary result of the program’s infancy, and that the funding will balance out as the program grows.
However, after assessing the possible effects of delaying the scheduled 0.8% tax increase coming in 2026, the county found that it could give taxpayers a one-year reprieve from the increase without significant impacts to the program. A one-year delay would also allow the county to better assess the needs and impacts of the program, Multnomah County Chair Jessica Vega Pederson said.
“Based on the results of our updated modeling, along with concerns we’ve heard about the impact of our tax, I believe it is appropriate to delay the scheduled increase and deadline for that technical committee report by one year,” Pederson said. “This will give us one additional year of post-pandemic data to help us make informed decisions as a board about how we remain on track to universal preschool access by 2030.”
Multnomah County Economist Jeff Renfo told commissioners Thursday that a one-year delay is possible. However, eliminating the 0.8% tax increase altogether would bankrupt the program in less than 10 years.
“The lowest point we get with our fund balance is close to $300 million, that’s a pretty significant cushion, which is why we started to explore the tax delay,” Renfro said. “With the delay, that (surplus) drops down a little under $200 [million], which means the county can still delay the tax by a year and still implement the program as planned. However, if there were no tax increase at all, the program would run out of money by 2032.”
Multnomah County Senior Policy Advisor Hayden Miller said that the county is in the early stages of building a technical advisory committee, which will advise commissioners on alternative options for funding the preschool program. The county expects to staff the committee by Halloween.
“This technical advisory group will consist of technical experts,” Miller said. “It will really be focused on people who can look at the revenue and financial needs of this program: Economists, demographers, it will also include our County Chief Financial Officer Eric Arellano, our County Economist Jeff Renfro, and the Preschool for All Director Leslee Barnes.”
County commissioners passed the ordinance to a second reading. Commissioners will make a final decision on the proposed tax delay on Sept. 5.