Supporters of a capital gains tax to help tenants facing eviction push forward on initiative after legal decision

Backers of a proposed capital gains tax that would provide lawyers to tenants facing eviction are mounting a signature gathering effort in hopes of getting the initiative on the November ballot after a Multnomah County judge ruled last month that the proposal could move forward with modified language.

The ruling comes in response to a challenge filed by the Portland Business Alliance in March contending that the language for the proposed ballot measure failed to adequately explain what it would do or how the tax would be levied.

Multnomah County Circuit Judge Katharine von Ter Stegge ruled partially in favor of the business group May 25, making several modifications to the ballot title question, summary and explanatory statement. The ruling was not made public until earlier this week.

In the wake of the ruling, the Multnomah County Elections Division informed backers of the initiative that they could proceed with signature gathering. However, they will have limited time to mount an effort to get the initiative on the November ballot due to the delays from the court case.

Advocates would need to obtain 22,686 valid signatures – representing 6% of county voters who voted for governor in the last election – by the July 18 deadline for the measure to qualify for the November ballot.

John Bethencourt, a co-coordinator of the “Eviction Representation for All” initiative, acknowledged that could be a tall order. He said if the coalition of tenants’ rights and community groups backing the initiative are unable to collect the required signatures in time for the November ballot, they will instead try to get it on the May 2023 ballot.

“While gathering the necessary signatures by the July 18 deadline for the November election is ambitious, the early returns from our signature drive suggest that the urgency of the housing crisis may very well lead our community to do so,” Bethencourt said in an email. “Many of us worked on the 2020 universal preschool initiative, which successfully met the same signature requirement in an even shorter period of time.”

The coalition has raised only about $1,000 in cash and received another roughly $11,000 in donations of goods and services – more than three quarters of which came in the form of legal representation to fight the challenge from the Portland Business Alliance, according to campaign finance records. The coalition has not reported any expenditures for signature gathering.

The initiative would levy a countywide adjustable 0.75% capital gains tax to fund a program that would provide free legal representation for all tenants facing eviction.

The business group said in its challenge that the wording in the initiative was misleading because the legal representation would not only be provided to residential tenants facing evictions, but in a broad array of cases, including “counterclaims, appeals, collection actions, appeals to maintain assistance under federal Section 8 rent assistance, administrative hearings with the Portland Public Housing Authority, post-foreclosure matters, removal of illegal trespassers and squatters, and more.”

The group also raised concerns about the measure failing to define capital gains, failing to state that it could delay eviction cases and inadequately explaining that the 0.75% tax rate could be increased.

Von Ter Stegge agreed in part with the business group, modifying the ballot language to refer to the tax as “adjustable,” make clear that the free legal representation would extend to cases beyond eviction proceedings and note that eviction cases could be postponed until a lawyer was appointed. She disagreed with some of the business group’s other challenges, including their claim that capital gains tax was not adequately defined in the measure.

Jon Isaacs, vice president of government affairs for the Portland Business Alliance, said he was pleased with the court’s changes to the proposed measure. However, he criticized the initiative as extreme and unnecessary.

“Portlanders already face one of the highest local tax burdens in the nation, and this measure will exacerbate our region’s slide into unaffordability,” Isaacs said in a statement. “This is one of the most politically radical measures ever proposed in Oregon.”

Bethencourt said that backers of the initiative were content that von Ter Stegge had made only minimal changes to the proposed ballot language and said the business group’s court challenge would not deter advocates from continuing to push to get the measure on the ballot.

“We are disappointed but not surprised that the PBA once again attempted to obstruct a progressive ballot initiative in an effort to protect the profits of Portland’s wealthiest residents,” Bethencourt said in an email.

There has been a growing movement toward ensuring that at least low-income tenants have legal representation during eviction proceedings. Washington, Maryland and Connecticut passed legislation last year guaranteeing counsel for those tenants. Thirteen cities across the United States have similar laws.

Both the City of Portland and Multnomah County allocated money to seed eviction legal defense programs for low-income renters last year.

John Maher, president of Oregonian Media Group, is a volunteer board chair of the Portland Business Alliance and does not receive any financial compensation for the position.

— Jamie Goldberg; jgoldberg@oregonian.com; @jamiebgoldberg

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