Multnomah County's "Growing Tax Base" Claim Doesn't Survive Contact With the Data

Preschool for All filer counts might be rising. That's not the same as a healthy tax base.

A scheduled tax rate increase is coming for Multnomah County’s Preschool for All program in 2027. The case for it partly relies on a claim that the high-income tax base is stable and growing.

Two recent news articles—from the Portland Mercury and the Oregonian—highlighted that case using the latest filer data. County Economist Jeff Renfro is quoted in both pieces, expressing confidence that the base is expanding.

Both articles, however, measure growth incorrectly, ignore the areas where the county is actually falling behind compared to the rest of Oregon, and treat an initial filer count with a large unexplained anomaly as conclusive evidence.

Despite the reports, the latest data reveal nothing about whether Multnomah County taxpayers can or will accept another income tax hike.

When you compare Multnomah County’s filer growth against statewide filer growth, the picture looks considerably less reassuring. The middle brackets of the PFA tax base ($150k to $250k) are falling behind compared to the rest of Oregon. And the entry-level bracket is growing so fast in the initial years that inflation, not genuine income growth, is almost certainly the primary driver. A filer count inflated by workers crossing a fixed nominal threshold as prices rise is not evidence of a healthy tax base.

The policy stakes are real. The same data used to reassure county commissioners is also cited to justify a scheduled 0.8 percentage point rate hike on January 1, 2027. The actual base matters for that discussion.

The Wrong Denominator

Both articles focus on the absolute number of PFA filers as the key measure. In a growing economy, that is the wrong denominator. The right question is whether Multnomah County kept its share of Oregon’s high-income population.

County PFA return data, compared with Oregon Department of Revenue statewide figures, show what that comparison looks like.

The $500,000-and-above tier—the one both articles focus on—tells you almost nothing specific to Multnomah County. The county’s share of Oregon’s highest earners barely moved, while the absolute count fell locally and statewide by nearly identical percentages. What drove that decline and partial recovery is primarily the volatility of capital gains—a point Renfro himself has made. That is a national and statewide phenomenon, not a Multnomah County story.

The county-specific story is in the middle brackets. The $200–$250k range grew statewide by nearly 24% between 2021 and 2023. Multnomah County grew that bracket by only 13%. Had the county simply held its 2021 share of Oregon’s $200–$250k earners, it would have recorded roughly 770 more filers in that bracket in 2023 than it actually did. The $150–200k bracket tells a similar story: 21% statewide growth, 6.5% in Multnomah, with the county’s share falling from 3.7% to 3.3%.

These are the brackets most populated by salaried professionals, two-earner households, and small business owners—the people Portland Metro Chamber CEO Andrew Hoan described last year as the “highly mobile middle class and higher-income earners who are choosing to leave.” Neither article examines these brackets in any detail.

What the Entry-Level Surge Actually Signals

The entry-level bracket—filers between $125k and $150k—grew by 103% in Multnomah County between 2021 and 2023, against 15% statewide. That kind of divergence is consistent with bracket creep: inflation pushing workers over a fixed nominal threshold without any real gain in purchasing power.

However, in 2024, the entry-level count dropped by roughly 60%—from 6,911 to 2,733. The 2024 data are preliminary, and late filers may push that number higher. But no one has explained the drop, and the articles do not mention it. A tax base with a 60% single-year swing in its entry bracket is not obviously a stable one, and preliminary data with unexplained anomalies of that magnitude is a thin foundation for confident conclusions.

The PFA tax thresholds are fixed in nominal dollars and not indexed to inflation. Commissioner Julia Brim-Edwards brought indexing proposals to the Board of Commissioners twice. Both times, the board declined to act. The result is that, year after year, as nominal wages rise with the cost of living, more households cross the threshold without any real gain in purchasing power.

Prices in the Pacific region rose roughly 20% between early 2021 and late 2024. Multnomah County’s median household income rose about 16% over the same period. Adjusted for inflation, real per capita personal income in the county actually fell. Households are earning more dollars and buying less with them.

A worker earning $103k in 2021 who received standard cost-of-living raises through 2024 would cross the $125k threshold—and become a PFA taxpayer—without being any better off in real terms. The county counts one more filer, and the articles report a growing base.

The Oregonian acknowledges in passing that inflation “played a role” in filer growth, and quotes Renfro saying the base grew even after inflation was factored out. That may be true in aggregate, but neither article shows the work, and the 103% surge in the entry bracket compared to 15% statewide is not addressed at all. That gap is where the bracket creep signal lives.

For context: Metro’s Supportive Housing Services tax has a similar structure. Metro’s own materials state that starting in tax year 2026, SHS thresholds will be adjusted annually for inflation. The policy logic is exactly what Commissioner Brim-Edwards proposed for PFA. Metro took action. Multnomah County did not.

What Follows

None of this proves that the PFA tax is the primary cause of Multnomah County’s demographic trends. Housing costs, public safety, and remote work are all operating at the same time, and separating their effects requires more data than currently exist. Claiming certainty about the causal story goes beyond what the evidence supports.

What the evidence does support is narrower but important. Multnomah County is underperforming the rest of Oregon in the middle brackets of its own high-income tax base—the brackets where the PFA burden is most felt and where residents have the most options.

The increase in entry-level growth through 2023, which boosts the headline filer counts, is better explained by inflation rather than by in-migration or rising incomes. Both articles compare preliminary 2024 data with finalized 2023 figures: the current 2024 total of approximately 36,233 is actually about 6% lower than the 2023 final count of 38,561—a fact neither newspaper reports directly.

The county economist may be correct that the final 2024 figures will show a year-over-year increase. That would be worth noting. However, it wouldn’t resolve whether the base is truly healthy. An increasing filer count, driven partly by inflation and partly by a statewide economic trend that Multnomah County is underperforming, isn’t the same as having a resilient tax base.

That distinction matters because the 2027 rate increase is still current policy. The argument in favor of it partly relies on the idea that the base can handle more.

The data, read carefully, do not clearly support that claim.