The switch to working and shopping from home, accelerated by the COVID-19 pandemic, dramatically changed downtown Portland. It’s high tech, not high taxes, emptying downtown office buildings.
Killing our national model of a universal preschool program will not revive our old downtown-centric economic model. But it will cost us one of the few bright spots attracting families to Portland, families now struggling with both housing and childcare that are unaffordable and scarce. Urban counties nationwide are losing young families, who are critical to a thriving community.
Portland enthusiastically adopted working from home, ahead of the nation even in 2014. Portlanders are saving themselves family time and money as well as the aggravation and pollution of commuting. Businesses are spending less on office space, shifting some workspace expenses to the people whose jobs can be done from home, whether full-time or a few days a week.
Even before the pandemic, we lost major stores downtown and in Lloyd Center. Without Meier & Frank, Macy’s and REI, our in-person shopping options are limited to boutiques, Nordstrom and malls on the edge of town. Since our parking meters were contracted out, they are poorly maintained, scratched and grubby for occasional users who don’t download the app. It’s no wonder people aren’t shopping as much downtown.
There’s no real evidence linking downtown’s woes to local taxes. No flight of the wealthy shows up in the statistics. The number of Multnomah County households with incomes over $500,000 a year tripled from 2019 to 2023, according to Census data analyzed by the Oregon Employment Department. The number of tax filers paying the preschool tax grew by more than 5,000 from 2022 to 2024, based on their incomes the previous year.
It makes sense to be taxing at the top, where economic gains have been increasingly concentrated for several decades now, by a combination of policy and market forces. But progressive taxation — higher taxes for those who can most comfortably afford to pay — requires maintaining large program reserves, because incomes at the top can vary widely from year to year. Big, unpredictable swings in capital gains incomes, especially, must be expected to change income tax revenues from year to year.
Our vision for downtown must move with the times. Though downtown property owners have been very influential in our local and state governments, they have been less influential in their contributions to the city’s tax base. Downtown office buildings paid only 4% of Portland’s property tax revenues in 2024, according to the city economist. Lower prices on office buildings make it possible for developers to convert them to housing, as is happening in New York and elsewhere.
We need a new economic development strategy, investing in people — our labor force — rather than tax breaks for those wealthy enough to already benefit from huge 2017 federal tax cuts, which now stretch forward in time, thanks to the recent budget passed by Congress.
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This article appears in July 30, 2025.