Multnomah County Universal Preschool Initiative Coming to the Ballot

This November, Multnomah County residents will have the opportunity to vote on a county preschool initiative, referred to as Preschool For All (PFA) or MULTCOINIT-08. Details on the initiative have recently become clearer as two competing plans destined for the ballot indicated earlier this month that they will join forces.

The program would provide an estimated 7,000 additional preschool slots by 2026. The first slots will be available in the fall of 2022 with priority going to specific populations including low-income children, foster children, and children with disabilities. The plan also includes measures to ensure preschool teachers earn wages on par with those of kindergarten teachers and teaching assistants.

The PFA plan, as written, would be funded by a tax in Multnomah County starting in 2021. The tax rate would range from 1.5% to 3% based income levels for individuals living in the county.

Individuals with income over $125,000 single and $200,000 married filing jointly would be subject to a 1.5% tax on income over those thresholds. This rate would increase to 2.3% in 2026. Taxpayers with income over $250,000 single and $400,000 married filing jointly would be subject to a higher tax rate of 3% on income over those amounts.

As voters await the plan implementation details, it is unclear if an exclusion will apply to business income earned in the county that is reported by individuals. Business income earned in the county is currently subject to county and city level taxes. More than four of the largest metro areas in the U.S. already have universal preschool programs, including New York City, Washington D.C., Boston, and Chicago.

This countywide tax will arrive on the ballot just months after the Metro homeless services tax passed this May. That tax is set at 1% on high-income individuals and businesses located in Multnomah, Washington, and Clackamas counties.

The tax landscape in Portland continues to evolve with each election. Aldrich is here to help you plan for changing taxes while achieving your goals. If you’re unsure how to adjust your tax plans, please contact your Aldrich Advisor.

This article was written with the most current information as of September 3, 2020. Our team is monitoring the potential plans closely and will continue to provide updates as the ballot measures evolve.