Will a second US city tax billion-dollar firms to fund clean energy?

Amy Winton doesn’t like that she has to depend on fossil gas for her restaurant, Mexican taquería Pandita in Eugene, Oregon. But she’s stuck with the gas-fueled burners, heaters, and outdoor fireplace that came with the space. 

“We just don’t have the funds” to switch to electric equipment, Winton said. ​“If we had the financial backing for it, we could do it.”

In the wake of the Trump administration’s legally dubious clawback of billions of dollars in federal climate incentives, Eugene voters will have the chance this November to create their own clean energy funding. By imposing a fee on billion-dollar corporations, the ballot measure could deliver a windfall for projects that reduce planet-heating emissions, including restaurant retrofits.

If the measure passes, behemoth companies like Amazon, Chase, Home Depot, Walmart, and Wells Fargo that make both $1 billion or more in gross profits nationally and at least $500,000 in gross profits within Eugene will be charged a 2% fee on those profits made within city limits. The initiative exempts gross profits from groceries, medicines, residential garbage and recycling, and healthcare services.

The initiative is expected to bring in $15 million to $37 million per year to support renewable-energy and efficiency programs, clean energy job training, and green infrastructure projects that sequester carbon, like tree planting. The fund would prioritize projects that benefit low-income and historically marginalized communities.

“We’re really excited about … making big corporate retailers that are making over $1 billion a year pay their fair share,” said Jennifer Davis, executive director at Eugene-based environmental justice nonprofit Beyond Toxics, which supports the measure. ​“This is such a great opportunity to improve not only indoor air quality for residents in Eugene” — by switching to zero-emissions electric appliances — ​“but also transition the city off of fossil fuels and really serve as a model for other cities across the state and the country.” 

Eugene could end up pulling in more funding than anticipated, as Portland, Oregon, did after it pioneered this approach in 2018. Portland’s clean energy fund, which comes from a 1% fee on the local sales revenue of the largest corporations, has raised not the initially estimated $30 million to $90 million per year but nearly $200 million annually, thanks in large part to unexpectedly high online sales. The city has collected a total of $1 billion for climate projects as of June, according to a city representative.

Thanks to the funding, Portland has issued more than 400 community grants, increased annual renewable energy generation by over 500 megawatt-hours, reduced nearly 35,000 metric tons of greenhouse gas pollution, and supported the workforce training of about 1,500 individuals.

The projects make tangible improvements that touch Portlanders’ lives, according to state Sen. Khanh Pham (D), a former community organizer who helped launch the city’s clean energy fund ballot initiative. Projects include a nature sanctuary and community solar garden that will lower electricity bills for 140 low-income households; an affordable housing project with wildly efficient electric geothermal heating and cooling; and sidewalks built near schools to make young pedestrians safer. Another effort is distributing more than 24,000 portable air conditioners, mostly heat pumps, to people at high risk of extreme heat–related illness. Better access to cooling would have saved lives during a record-breaking heat wave in 2021, which scientists attributed to climate change. 

A few other cities have created climate funds based on fees, but typically not on large corporations. Boulder, Colorado, has a tax on utility customers; Fort Collins, Colorado, created a dedicated sales tax; Ann Arbor, Michigan, raised property taxes; and Denver increased its sales and use tax. Seattle’s approach is closer to the one Eugene is considering, with a payroll expense tax levied on larger businesses.

The nonprofit Building Decarbonization Coalition isn’t aware of any cities other than Portland with a clean energy fee on billion-dollar corporations. 

Eugene’s initiative is backed by an unusually broad coalition, according to Dylan Plummer, clean heat campaign advisor at the Sierra Club. More than 100 environmental organizations, labor unions, local businesses, community leaders, and elected officials support the fund, including the Oregon Just Transition Alliance, Oregon League of Conservation Voters, Eugene Education Association, IBEW Local 280, three Eugene city councilors, four state lawmakers, and one of Oregon’s two U.S. senators, Jeff Merkley (D).

Opposing the ballot initiative are the Eugene Area Chamber of Commerce, Northwest Grocery Retail Association, Oregon Bankers Association, and Oregon Business & Industry, according to local publication Lookout Eugene-Springfield. (Oregon Business & Industry, a major state trade group, is also leading a lawsuit to strike down the state’s greenhouse gas reduction program.) An opposition website funded by the Oregon Business & Industry Issues PAC says that the fee would constitute a ​“hidden sales tax” that would raise retail prices. ​“We will see increased costs,” said opposition campaign spokesperson Laura Sedwick. 

This is a misconception, according to Danny Noonan, climate, energy, and labor strategist at Oregon-based nonprofit Breach Collective. Citing a 2016 study by the Oregon Consumer League and the Our Oregon coalition, he noted that large retailers set their prices nationally or regionally, and differing state taxes on corporations haven’t been found to drive local consumer prices. Voters can check this for themselves: On Amazon, an item costs the same whether the shipping address is in Portland or Eugene, despite Portland’s 1% clean energy fee.

“If there was evidence that price increases were directly traceable to [the Portland Clean Energy Fund], our opponents would be putting that evidence on their website, on billboards, on the airwaves, etc,” Noonan said. ​“This isn’t occurring.” The measure still exempts basic necessities in an effort to assure voters that those goods and services won’t be affected.

Advocates for the Eugene initiative also point out that companies pay much less in taxes than they have historically. The share of Oregon income taxes that are paid by corporations has fallen by more than 40% since the mid-1970s, according to the Oregon Center for Public Policy. Last year, large corporations also received massive tax cuts from the Trump administration.

If Eugene’s initiative passes, companies would start paying into the clean energy fund by 2029.

Pandita owner Winton says she hopes to apply for a grant from the fund to help electrify her restaurant. 

“The pulse from folks coming into our business and talking about [the fund], is they’re all for it,” Winton said. ​“It’s a no-brainer.”