For decades, Multnomah County has taken a backseat to the city of Portland on economic policy, due in large part to a 1980s resolution to cede influence over the local economy to the city government.
But with the Portland region’s economy lagging behind its neighbors and other large cities of similar size, the county commission wants to reconsider that role. Commissioner Julia Brim-Edwards and Commissioner Jessica Vega Pederson hired two consulting firms to begin mapping out the county’s economic status and its stimulus and development options.
The board received an initial briefing on the effort Tuesday, including several draft recommendations on how the county can spur economic recovery. The preliminary proposal contained few specifics, but consultants generally recommended that leaders make unspecified potential changes to the county’s high tax rate and coordinate efforts with other agencies and businesses. They also noted that the county could tout the economic benefits of some of the social services it already provides.
Brim-Edwards said the purpose of the economic analysis is to “identify where the county should play an active role in recruiting and retaining local businesses and building safe and livable communities.”
The board agreed last April to spend a one-time $100,000 to begin an economic analysis.
Economists in the Portland area, which includes the county, are sounding the alarm over the region’s weak fiscal situation. Multnomah County’s unemployment rate was 5.0% in December, compared with the national unemployment rate of 4.4%, according to the U.S. Bureau of Labor Statistics. Real estate investors and other industry experts continue to criticize Portland as undesirable.
Multnomah has several unique factors holding it back, according to research firm BCT Partners and New Growth Innovation Network, a nonprofit the county hired to study the economy. First, there is a lack of available industrial land outside the city limits compared to Washington County, Clackamas County, and even Clark County across the Columbia River.
The second challenge is high local tax rates. Multnomah County and the city of Portland levy a combined local business tax of 4.6%, while other counties do not, according to the consulting firm. The county also has the highest personal income tax rate in the region for high-income earners, which has long drawn the ire of business groups and wealthy residents.
“Companies can move 20 minutes away, stay in the same labor market, keep the same employees, and eliminate taxes entirely,” said Abby Alfred, director of program management and analytical solutions at BCT Partners.
BCT Partners and New Growth Innovation Network also found that the county’s “trade sector employment,” which includes sectors such as manufacturing, agriculture and technology development, decreased by 6.8% from 2019 to 2024. Similar counties in Texas and Colorado saw these jobs increase by 22.7% and 24.8%, respectively, during the same period, the companies said.
Although counties don’t have the most powerful toolbox at their disposal, consultants and county staff have presented some ideas on how the government can help. The draft recommendations include tracking how social services impact the business environment, starting discussions with cities and other organizations about tax rates, and working to get advance notice if trade sector employers plan to leave the area.
The consultant group also recommended reframing social services provided by the county, such as shelter and housing assistance, as an economic benefit. The logic is that if the county can keep people off the streets and maintain services that ease the financial burden on residents, it can create a better fiscal environment overall.
In addition, big projects like those funded by county library bonds and the currently stalled Burnside Bridge replacement will boost construction and trade jobs, officials said. The county’s tuition-free preschool program has also been highlighted as a potential economic driver that would free up funds for working families and support new preschool providers.
The conversation comes as the county prepares for a tough budget cycle that includes deep cuts to homeless services and smaller cuts to health and community programs. Officials expect the general fund shortfall to be about $10.5 million, totaling $789 million of the county’s $4 billion budget. This significant amount is the largest discretionary fund at the county’s disposal.
As part of Tuesday’s press conference, commissioners Shannon Singleton and Vince Jones-Dixon also presented a report focused on how the county can strengthen the region’s pipeline to stable careers in trades and manufacturing. The report’s recommendations included funneling county funds to employment organizations, community colleges and state-run preschool programs. The county may also consider expanding access to apprenticeships and internships in areas such as road and bridge maintenance.
“We do a lot of anti-poverty work in the county, but we do very little to help these people move out of poverty and earn a living wage or family wage income,” Singleton said.
Singleton and Brim-Edwards are both running for county chair in the November election.
The County Commission plans to revisit these topics and explore additional ways to support the local economy. Consultants and county staff plan to produce a final report on the economic situation later this month, said Brian Hockaday, chief of staff for Julia Brim Edwards.
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