Debt on Pointe

City officials finally produced details last week of a new arts tax that voters passed last November, requiring Portlanders to pay $35 a year to fund arts teachers in the public schools and support many of the city's arts groups.

It's arrived just in time for taxpayers to help bail out one of the city's best-known arts groups, Oregon Ballet Theatre.

Records obtained by WW show OBT skipped paying all of its rent last year—$300,000—to the Portland Center for the Performing Arts. 

The ballet rents space at Keller Auditorium and the Newmark Theatre—both owned and operated under the umbrella of PCPA by the regional government, Metro.

In September, the Metropolitan Exposition and Recreation Commission, the Metro committee that oversees the facilities, approved what amounted to an interest-free loan to OBT: The ballet has five years to pay its back rent.

Teri Dresler, Metro's general manager of visitor venues, says the agency tried to balance the dual responsibilities of supporting arts groups and safeguarding public assets. "The commission took some risk here," Dresler says.

As WW reported previously ("Cashdance," WW, Sept. 30, 2009), OBT's ambitions—and spending—have long exceeded its ability to generate revenue.

OBT finance director Diane O'Malley says the company lost money on its trip to South Korea last year to perform The Nutcracker. After that, an ambitious new show in Portland sold far fewer tickets than expected.

"The wheels started coming off a little bit," O'Malley says.

OBT supported the arts tax, O'Malley says, but isn't banking on benefiting from it. She says OBT has agreed to a payment plan on the back rent, cut its budget by nearly 20 percent and is tracking cash flow very carefully. "We are current on all payments," O'Malley says.

The city expects the arts tax to raise $9 million this year and $12.2 million in 2014. A little over half will go to help hire and support arts teachers in schools. Much of the remainder is available for arts groups approved by the Regional Arts & Culture Council. 

The council's executive director, Eloise Damrosch, says groups such as OBT are eligible to receive up to 5 percent of their operating revenues from the new tax.

Last year, the arts council gave OBT $83,000. Based on next year's $5 million budget, OBT could be eligible for $250,000.

"OBT will get a sizable increase if they can present acceptable financials," Damrosch says.

Portland economist Eric Fruits, who opposed the arts tax, says he's unhappy the tax will bail out struggling organizations. 

"If these arts programs are so vital, why can't the private sector support them?" Fruits says. "Why can't they support themselves with ticket sales and contributions?” 

WWeek 2015