One thing to keep in mind as the Portland City Council debates the street fee -- charging residents and businesses a fee to maintain the streets, on the ground that the City's revenues aren't sufficient to pay to maintain the streets -- is that this is not a new problem. The City, its residents, and its muffler shops have known for years that the streets have been decaying faster than the City was maintaining them. Something over two years ago, the City announced that it would stop maintaining most streets at all, reserving its paving dollars for arterials and streets needed for emergencies.
A few months earlier, in late 2011, the City Council created the Office of Equity. The Council allocated it $1.2 million from the budget for fiscal year 2013-2014. While $1.2 million won't patch a lot of potholes, it still represented a new program at a time when the City Council was painfully aware (or should have been painfully aware) that it didn't have the money to fund its existing programs.
Another way to look at it is that the Councilors all agreed two years ago, and again last year, that funding the Office of Equity was more important than patching potholes and repairing the streets.