Multnomah County taxpayers won't see a scheduled income tax hike next year after all.

The Board of Commissioners voted unanimously on Aug. 27 to delay a planned 0.8% increase to the Preschool for All (PFA) marginal income tax by one year. The increase will now take effect Jan. 1, 2028, instead of Jan. 1, 2027.

The board had initially considered a two-year delay, pushing the increase to 2029, as recommended by the Preschool for All Technical Advisory Group (TAG), an independent panel of economists, demographers and policy experts mandated by the ballot measure.

But Commissioners Shannon Singleton and Meghan Moyer offered a friendly amendment shortening the delay to one year, according to a county news release. Chair Jessica Vega Pederson had initially supported the two-year delay but accepted the one-year compromise as a friendly amendment.

This is the second time the board has pushed back the increase. The 0.8% hike was originally set for 2026. Commissioners delayed it once in 2024, moving it to 2027.

Why the delay

The TAG said a pause would give the county time to resolve outstanding cost questions, allow additional analysis and reduce near-term economic risk, according to the county's news release.

Updated population projections from Portland State University's Population Research Center played a central role. The forecasts show the county needs just over 8,000 preschool seats to reach universal access by 2030, roughly 3,000 fewer than earlier estimates.

That smaller target has left the program with a $610 million fund balance, as reported in the county's most recent Annual Comprehensive Financial Report, Willamette Week reported Aug. 20.

County economist Jeff Renfro told commissioners at the Aug. 20 meeting that the revised projections changed the outlook: "…are doing significant work to make us think the program can be implemented as we currently plan."

Not everyone agreed a delay was wise

At the Aug. 20 first reading, several public commenters opposed any delay. They argued the county should not cut off a potential revenue stream before understanding the full cost of the program, including supports for high-need students.

Candice Williams, executive director of For All Families Oregon, testified that the board needed a complete picture of the true cost of inclusive care before making decisions. She warned that adequate reserves "shouldn't be mistaken for room to slow down progress toward this high-quality program."

Renfro's modeling showed that if participation reached 90% instead of the county's assumed 77.5%, the program would need about 11,000 seats. Combined with higher seat costs, that scenario would push PFA toward a $400 million deficit by fiscal year 2039.

Voters approved the Preschool for All income tax in November 2020. It took effect Jan. 1, 2021, and applies to high-income earners: single filers pay 1.5% on income above $125,000 and 3% above $250,000. Joint filers pay 1.5% above $200,000 and 3% above $400,000.

The board will revisit a potential tax increase in 2027, according to the county's news release. No specific meeting date has been set.