PSU business tax campaign suspended as college affordability coalition forms

A controversial tax proposal on Portland Metro Area businesses to support Portland State students was suspended today, with an agreement between the university and the business community to address alternative solutions to college affordability.

Initially proposed by PSU President Wim Wiewel and advocated by the Yes for PSU citizens’ committee campaign, the tax proposal faced opposition by several groups, including the Portland Business Alliance and Portland Public Schools. PBA, which represents nearly 2,000 businesses in the tri-county area, has previously warned that opposing member businesses could cease donating to PSU as a result of the tax proposal.

The agreement seals the formation of a College Affordability and Success Coalition, which includes Wiewel and Portland business leaders from PBA and other business organizations. It commits the coalition to seeking $25 million annually in additional funds for scholarships and faculty and advisory staffing by 2019, with options on the table including increased philanthropy, legislative advocacy and other solutions.

Scott Gallagher, PSU director of communications, pointed out that business leaders and the university administration continued to discuss alternatives despite opposition to the ballot measure.

“It just came about over time that they all wanted to find a solution [to student financial need],” Gallagher said. “The business community didn’t like the solution that PSU and the [PSU] Foundation and the citizens’ committee came up with, so they continued to meet and eventually we came to an agreement of this coalition.”

The initial proposal, if passed, was projected to raise up to $35 million for PSU students and faculty annually over eight years. Gallagher acknowledged that the coalition agreement would raise less money at its minimum, arguing that the lack of an eight-year sunset date could ultimately provide greater relief for students over time.

“This commitment from the business community has no sunset,” Gallagher said. “It will be more money for more students.”

Despite the tax campaign’s suspension, Yes for PSU Campaign Director Peter Zuckerman called the agreement a win for the university. He pointed to the support of students and community members, including some businesses such as Dark Horse Comics.

“To be totally honest, I never expected to win so quickly,” Zuckerman said. “Support kept growing and growing by the thousands.”

Wiewel, who previously referred to the ballot measure as one of the most significant moves of his presidency, also touted the agreement as a success during a press conference earlier this morning.

“Business leaders recognize our students need significantly more support and our stepping up with this commitment to make it happen,” Wiewel said.

Greg Ness, chairman and chief executive officer of The Standard and chair of the Oregon Business Council, will co-chair the coalition with Wiewel. An opponent of the Yes for PSU ballot initiative, Ness pointed to his opposition as a matter of the proposed funding mechanism rather than the objective.

“Higher education in this state is underfunded by the state, and that’s an important issue that we have to deal with,” Ness said during the press conference. “[Wiewel and I] also agree that the financial barriers hinder academic success for students here, and it impacts graduation rates for a very unique student population compared to other universities. And we agree, certainly, that all of us need to do more to remove these barriers.”

PBA President Sandra McDonough said in an email that the PBA supported the new coalition despite its opposition to the tax initiative. On whether the shift in direction would ameliorate relations between angered members that threatened to halt donations to the PSU Foundation, McDonough said it was too early to tell.

“Because the announcement was made today, we haven’t had the opportunity to talk to many of our members, though our membership has always thought of PSU as a partner,” McDonough said in the email. “Many are contributors to the PSU Foundation and we hope that support will continue in the future.”

As part of its support for the tax campaign, the PSU Foundation previously donated $100,000 to Yes for PSU. PSU Foundation Board Chair Mark Rosenbaum said during the press conference that it was currently undetermined how much of the donation had been spent thus far on the campaign. He noted that the remaining funds would be returned to the foundation.

Rosenbaum also acknowledged disagreement on the foundation’s decision to fund the campaign, but argued that the decision supported its mission of creating access for students. He pointed to a $5,000-per-student disparity in state allocations between students at PSU and those at the University of Oregon and Oregon State.

“[Our students] work hard in order to be at school—they sacrifice greatly in order to be able to study,” Rosenbaum said. “We must find ways to help support them, to grow this community and to encourage our financial strength and their strength. Many of our students are first-generation college graduates, and their needs have to be addressed.”

Gallagher also dismissed the impact of the $100,000 donation if lost, pointing to the funding of Yes for PSU as an investment.

“Remember, even if it’s $300,000 that was spent, the result from that is this agreement, this commitment from the business community,” Gallagher said. “A $300,000 investment to create a $25 million minimum fund for students in perpetuity, potentially? That’s a damn good investment.”

But the commitment is far from a guarantee. When asked about what mechanisms the coalition would pursue to secure funding, Ness pointed to many mechanisms already pursued by PSU—philanthropy, legislative advocacy, incentivization of contributions and even alternative taxes. But he assured that business leaders would put in the needed effort to get results.

“We want to have strong ties to PSU; we want to work together on this,” Ness said during the press conference. “We think that’s the way we get the better answers in the state of Oregon, in a collaborative approach. So we need to demonstrate that here, and we’re going to work hard to see that we get the result we need.”

Wiewel, Ness and Gallagher all agreed that it would likely involve a piecemeal approach involving a patchwork of the pursued solutions. Gallagher said that building collaborations within the community was a demonstrated PSU strength; he pointed to the construction of the Academic and Student Recreation Center as a recent example of the successful collection of funds from multiple sources.

“PSU is doing what PSU always has done and knows better than anybody else,” Gallagher said. “We collaborated with the business community to find a solution. We’re still working out the details, but it’s a commitment from the business community for $25 million, minimum. That’s no small thing.”