On a former landfill in Portland, Oregon, workers are installing hundreds of solar panels in a community solar project that will help people living nearby save on their electric bills. The new solar farm was funded by an unusual source: the city’s pioneering tax on billion-dollar corporations, which was enacted in November 2018 and has raised more than $1.7 billion to fund hundreds of climate-related projects.
The first-of-its-kind program, created through a citizen-led ballot measure, charges a 1% tax on the local retail sales of large corporations like Amazon and Walmart. The city hasn’t disclosed which companies have to pay, but it applies to corporations with more than $1 billion in annual retail sales and at least $500,000 in sales within Portland city limits, with some exemptions for necessities like groceries. Around 500 large companies are affected, and the revenue goes both to community grants and larger city projects, with a focus on climate justice.
Turning a landfill into a community asset
In the case of the solar farm, around 170 low-income families can sign up to use a portion of the electricity that’s generated. Because the city fund is covering the cost of putting in the solar panels, the project immediately creates steep savings for those customers—as much as 40% less than what people were paying on their utility bills before.
“Without those funds, it wouldn’t exist,” says Jessica Carmona, the renewables program director at the Bonneville Environmental Foundation , a nonprofit working on the project. “It’s not possible to build these types of sites for nonprofits that are low-income benefiting, with such high levels of savings, if you’re not getting funding.”
[Photo: The Bird Alliance of Oregon]
The solar farm sits on land now owned by the nonprofit Bird Alliance of Oregon , which is using another grant from the city fund to restore wildlife habitat on the former landfill. A high school across the street has gotten grants for youth climate action. On the same street, the city has used grant money to plant trees to help reduce extreme heat, and another grant will help fund a major new rapid bus corridor.
From a ‘bike bus’ to clean energy retrofits
Changes are rolling out throughout Portland, thanks to grants from the Portland Clean Energy Community Benefits Fund, which administers the revenue from the 1% tax. The latest round of grants includes expanding a “ bike bus” program to help kids get to school safely on bikes—with the goal to ultimately help replace more than half a million miles in car trips to school—and another program that lets employees at a local university borrow bikes for their commute to work.
Other grants support access to EVs . Another Bird Alliance grant is expanding a program that works with homeowners to restore habitat in their backyards , creating a network that connects to parks; while it helps wildlife, it’s also adding shade and helping clean the air for people.
“What [the Portland Clean Energy Fund] is allowing us to do is to work with a total of 420 new households focused in areas that have the greatest burdens of urban heat islands and air pollution and low tree canopy,” says Micah Meskel, the director of conservation and rehabilitation at the Bird Alliance of Oregon. At its core, Meskel says, the city fund is a climate justice program. He argues that it’s fitting that corporations “who have the most negative impact on climate change be the ones that are paying for it.” The Bird Alliance, along with other nonprofits in the city, helped fight for the original ballot measure after seeing a need for more funding to tackle the growing impacts of climate change.
Grant money is also helping retrofit homes to reduce energy bills, and training workers to perform energy audits. The grants have helped the city respond to climate impacts that are happening faster than expected—after a deadly heat wave in 2021 , for example, grants helped residents get air conditioners so they can be more resilient as extreme heat becomes more frequent. Several grants support new net-zero housing, which is housing that produces as much renewable energy as it consumes. The funding helps ensure that builders include features like heat pumps in homes even as the overall cost of construction keeps rising.
“We’re far too often in this environment where costs are going up tremendously and everyone is trying to figure out how do we get our housing built—which is so critical for our community—and they’re whittling away everything that they originally put into the plan,” says Sam Baraso, program manager for the Portland Clean Energy Fund. Heat pumps or extra insulation might get cut, he says, but the fund can help keep them in place.
As the Trump administration slashed federal funding across climate-related projects, Portland’s surcharge on billion-dollar companies helped it keep going. “There was an expectation that there were going to be other dollars for other things like electric vehicles and clean energy,” says Raffaele Timarchi, external affairs manager for the Portland Clean Energy Fund. “And when that stuff bottomed out at the federal and state level, we became the only game in town.” Several projects wouldn’t have moved forward, he says, if the fund hadn’t existed.
More money than expected
Corporations, unsurprisingly, fought the ballot measure when it was introduced, and the opposition campaign—with backing from Amazon and others—raised more money than the campaign in support. But it passed with a decisive 65% of the vote. (A later survey , in 2024, found that 65% of citizens had a favorable view of the fund.) The Portland Metro Chamber, a local business organization that had opposed the original ballot measure, defended it last year when questions arose about how the funds should be spent.
Soon after the climate fee took effect, two large supermarket chains added 1% charges to some non-food items in Portland stores. Customers sued the stores and won a settlement . It’s not clear whether any other companies have tried to pass on the cost in retail prices. But that likely has happened, says Eric Fruits, an economist who teaches at Portland State University who opposed the program. “Just naturally, it gets passed on,” he says. “Even if it’s not a line item, it’s going to get passed on in higher prices.” Any impacts have been hidden by inflation over the years since the program started, he says, though he believes that it didn’t ultimately do any real harm to consumers or retailers.
An early report from Portland’s city auditor in 2022 cited challenges with how the program was run, including a lack of clear goals to weak oversight of the effectiveness of the grants. A year later, the auditor found that the program had made progress , though management of the novel program still had room for improvement.
The team acknowledges that the program hasn’t been easy to build from scratch. “No one’s ever done this before, and sometimes it’s hard to make the road by walking,” says Timarchi. The law faced immediate challenges. After it went into place, the state passed a law that banned other communities from passing similar surcharges on the gross receipts of large businesses, though Portland got an exemption. As the nascent program began, planning also took time. The organizers recognized that the nonprofits they worked with would need time to build their own programs, and multiyear grants to make those programs last.
The funding also ended up being much larger than expected. The city had initially projected that the surcharge would generate up to $60 million a year; instead, it’s bringing in around $200 million a year. According to the city economist, one of the reasons was that the pandemic shifted shopping habits, and online retailers are selling more in Portland than they previously did; inflation also increased the dollar value of purchases. This meant that the program had to rethink how the money would be used. It expanded from community grants to also include funding for larger programs in the city.
“We have also seen great benefit in its evolution to bring in the city as an important partner to really scale the impact, especially within the built landscape and the sort of the set infrastructure of the city, whether it’s its park systems, its tree canopy, its transportation systems,” says the Bird Alliance’s Meskel. “It’s really tough for an individual organization or an individual to have an impact in those spaces. But when a jurisdiction takes a holistic approach to change a system, it can be really profound.”
As the money came in, there have been arguments about how it could be used. One ballot initiative this year, which failed, wanted to use some of the fund to pay for more police officers , not clean energy. As other cities consider similar programs (including Eugene, Oregon, which passed a related program this year), the Portland team says that it’s important to be clear about the goals and how the community will decide what gets funded.
And though the fund has had a visible impact, it’s still not enough for the city’s climate goals. “$1.6 billion that we moved over five years is just an illusion of abundance,” says Timarchi. “We’re a part of every energy efficient housing project that comes out of the city, nearly every green infrastructure project, urban forestry and beyond, and [transportation]. It’s just not enough money for all those projects, so this question of prioritization is really important.”
So far, the city estimates that the first three rounds of grants helped reduce around 25,500 metric tons of CO2 emissions. That’s a tiny amount in the context of the world’s 38 billion metric tons of emissions each year. But their impact can go beyond the emissions they directly prevent if it helps accelerate a broader shift toward lower-carbon ways of living. The grants are also making neighborhoods more resilient at a time when the risk of extreme heat keeps growing .
