Portland Is Doomed, but Don’t Blame the Mayor

I hear it from my friends and neighbors. I hear it from business owners. I hear it from my wife: “Ted Wheeler is the worst mayor ever!” But they’re wrong. Very wrong.

Charlie Hales was the worst, Sam Adams was second worst, Ted Wheeler is third worst, and Tom Potter was the best mayor since Vera Katz. So, by this measure, Ted Wheeler is the second best mayor we’ve had in nearly two decades. Hales made the homeless crisis worse. Adams destroyed our streets and gave us the much-hated Arts Tax. Potter did nothing. And, that’s where we are — we measure the success of our mayors by how little damage they do to the city.

But it’s not all the mayors’ fault. Under Portland’s commission form of government, every member of council is a mini-mayor heading up their own bureaus. In order for the city to work as a whole, the bureaus need to work together. That means city council members have to get along with each other. But they often get along so well in that, in the interest of collegiality, no one wants to be the dissenting vote on a crucial issue. That puts the city on cruise control while it’s heading toward a cliff.

This played out a few weeks ago with a city council vote to approve nearly $120 million in grants under the Portland Clean Energy Benefits Fund, or PCEF. In 2018, Portland voters approved the PCEF measure by a two-to-one margin. The measure requires larger retailers to pay a 1% surcharge on their Portland sales. The tax burden is enormous — an average of $425 per Portland household. Because the tax is on retail sales, it’s a regressive tax, meaning lower income residents pay a larger share of their incomes on the tax than do higher income households.

The tax money raised is placed into the Portland Clean Energy Community Benefits Fund. A committee appointed by the City Council recommends how the money should be spent. Funding priority is given to clean energy projects intended to assist communities of color, women, persons with disabilities, and the chronically unemployed. City Council must approve or reject the committee’s recommendations.

Very little scrutiny was given to these grant proposals. The PCEF Committee made its recommendations under what they dubbed a “blind” approach in which committee members are kept in the dark about which organizations are asking for the funds. In other words, committee members don’t know if an application is coming from a well-known organization with a long history of successful projects or a fly-by-night operation that will take the money and run.

You can guess where this is going.

The PCEF Committee recommended funding more than 60 projects, with a total price tag of nearly $120 million. About a third of the recommended spending was for projects that have no quantifiable metrics to measure their success or failure. That’s $36 million in projects with virtually no accountability to the PCEF Committee, city council, taxpayer or voters.

The Committee recommended spending $4.7 million to provide “seed money” for a speculative real estate development in North Portland. It also recommended spending $3.7 million over three years to support 45 students pursuing two-year associate degrees or one-year certificates, amounting to about $83,000 per student—that’s more than eight times the cost of community college.

When it came time for city council to vote on the package, Mayor Wheeler and Commissioner Mingus Mapps showed some deep skepticism over the spending proposal and asked some tough questions that deserved straightforward answers. I thought to myself, “This is it; we might actually get some ‘no’ votes on this.”

But, like Charlie Brown with the football, I was disappointed again. Council approved the spending unanimously.

I was stupid to be optimistic. I should have known better. The PCEF program is Commissioner Jo Ann Hardesty’s baby, as she claims to have led the campaign to pass it. The PCEF program is run out of Commissioner Carmen Rubio’s bureau. There is no way Wheeler or Mapps would vote no on the program because they might need those two votes later on for one of their own pet projects. So, in the interest of city council comity, even the worst ideas pass unanimously.

What’s wrong with city council isn’t the commission form of government. It isn’t the weak mayor system. Portland was named one of the most livable cities in the United States under the commission form of government. No one would say Vera Katz or Neil Goldschmidt were weak mayors.

The problem with Portland City Hall — and elsewhere in local government — is that the people who run for office and get elected are all cookie cutter versions of each other. They staff their offices with activists who push disastrous polices and sycophants who supply an echo chamber of accolades to their bosses. They travel in the same social circles. On the one hand, they’re terrified that some Antifa or other “direct action” player will ruin their restaurant dinner. On the other hand, they’re tickled at the thought that they’ll get invited to wine-and-dine at a conference at some posh resort to talk about “The Portland Way.” Repeat that process over a few decades, and you have a council that is little more than a rubber stamp. A recent post on Jack Bogdanski’s blog sums it up:

And then there’s the people who run for office — often ideologues who want to prove their point. They don’t have to run things well, and there are not enough good, competent, centrist people who run. When they fail, or have ridiculous policies they double down on their ideas — like not requiring background checks before disbursing millions of dollars to a nonprofit. (Portland Clean Energy Fund which was about to give money to a woman who was a white collar criminal.) They have zero shame.

We need some “no” votes on council. We need council to reject bad proposals. It’s OK to vote no. It’s OK to tell staff, “This is a bad plan, go back to the drawing board.” If every vote is unanimous, what’s the point of having an elected council at all? Talk to some Portland old timers. Some of them can tell you stories of explosive council meetings during the 1980s. That’s because big spending and bold policies need a decent dose of pushback.

Some might say, we just need to elect better people to public office. But, that’s a weak excuse. Where will these “better” people come from? Where have they been over the past few decades? Many of them are happily working in the private sector, away from the chaos and scrutiny of public life. What we need is a shake-up to the system. Institutions and incentives matter. With bad institutions and the wrong incentives, even the best people make bad choices. With the right set of institutions and incentives, even not-so-good people can do the right thing.

That’s why I like the Charter Reform Committee’s recommendation to expand the council to 12 members elected by district and to remove council member management of city bureaus. It’s the best chance we have to see some intellectual diversity on council and removes the incentives to create bureaucratic fiefdoms. Moreover, it’s much harder to get to seven “yes” votes than it is to get to three. With an expanded council, you might see some real compromises that short-circuit some of the worst public policy provisions.

But, I say “might,” because we also might get a council stuffed with members of the nonprofit industrial complex who think the best solutions to the city’s problems involve more taxes to fund nonprofit service providers.

Many of the other ideas recommended by the Charter Reform Committee will light a dumpster fire of uncertainty that will be tied up in the courts for years. For example, under the reforms, the mayor is not a member of city council, but magically becomes a voting member in the case of tie votes. Is the mayor supposed to hang around council chambers just in case there’s a tie?

The committee’s recommendation for ranked choice voting is a hot mess. I have a doctorate in economics, and I have only a vague idea of how ranked choice voting would work in practice. Voters will lose all faith in city elections if they find that the person who they thought was winning on election day ends up losing weeks later after the ranked choice process chugs through its algorithm. I hope the Portland Business Alliance succeeds in breaking up the charter reform proposals into separate ballot measures.

I wish I could be more optimistic, but I fear Portland is doomed. No matter how bad things get, they can always get worse. Aside from expanding city council, the charter overhaul will make things worse. No matter how bad you think the current mayor and council are, there’s a long line of even worse candidates already planning their next campaigns.