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Thursday, September 5, 2013

Yes, You'll Still Be Paying Just $35 for the Arts Tax

Posted by Denis C. Theriault on Thu, Sep 5, 2013 at 5:19 PM

There was much hand-wringing this spring over the future of Portland's $35, voter-approved arts tax—with the Portland City Council enacting a handful of technical fixes even as battled back lawsuits and mulled over some more fundamental issues: like whether maybe could be a bit less regressive.

But after the council weighed a detailed report this summer on how or whether to dramatically restructure the tax—including raising how much people were charged, in part to raise more money—Mayor Charlie Hales' office today has confirmed news reports that he plans to stand pat and leave the tax as is. That means the tax will continue to raise less than revenue officials forecast—putting less money in the hands of arts organizations.

Hales' office has told reporters the mayor was persuaded by Commissioner Dan Saltzman, who loudly opposed making deep changes to a measure, no matter how flawed, voters overwhelmingly approved.

“I had been leaning toward a major change, but Commissioner Saltzman’s argument changed my mind,” the mayor said in a prepared statement. “I now think: Dan got it right from the start.”

But the reality is Hales didn't have the votes for a change. While Saltzman was firmly against making any tweaks, citing the trust of voters, Commissioner Steve Novick favored something much more progressive. Commissioner Amanda Fritz fell closer to Novick on the spectrum, with Commissioner Nick Fish leaning closer to Saltzman.

The news leaked out just days before Hales was to formally sit down with arts leaders and inform them of his decision.

Hales' office broke down the mayor's logic as such:

• Maintaining the tax as-is supports the will of the voters.
• Maintaining the tax as-is supports the goal of putting arts teachers in schools.
• Maintaining the tax as-is supports the arts community, although possibly to a lesser degree.
• Maintaining the tax as-is provides predictability for taxpayers.

Not raising as much money could put some pressure on the tax's administrative cap. It's not allowed to spend more than 5 percent of revenues over a five year period on administrative costs. Bringing in less cash shrinks that cap. A smaller staff makes it harder to collect what's owed, and so on. One possibility could see the city council pony up for administrative costs from from its general fund.

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