Mayor Charlie Hales wants to fix the Portland arts tax. But if he has his way, the administrative costs could exceed the cap promised to voters in the ballot measure. 

Those new costs? Mailing taxpayers a letter explaining the new rules, and giving them a form to ask for a refund.

Hales has placed an emergency ordinance before City Council this morning. It would fix what the mayor has called a "silly" flaw in the arts tax passed by voters in November: a requirement that all city residents living in households above the poverty line pay $35, even if their annual income was less than that.

Hales' fix raises the minimum personal income to $1,000.

But the ordinance notes that the change will cost the city $277,000 to $700,000 in tax revenue, while creating another $100,000 in start-up expenses as the city mails a letter to explain the new rules and mails a refund request form.

That creates the risk that administrative costs will exceed the 5 percent limit over five years promised to voters in the ballot measure.

City Council is expected to discuss several additional fixes to the arts tax this morning. Follow as the story develops.

UPDATE, 12:10 pm:
Thomas Lannom
UPDATE, 1:45 pm:
Stephen Marc Beaudoin
Anne-Marie Plass
Nick Fish
legally prevent the city from distributing tax revenues to schools and arts organizations.