Mayor Charlie Hales has struck a deal to give Portland Public Schools and five other school districts their first payment from the arts tax—whether or not the tax is struck down as illegal by the courts.

The deal calls for the City of Portland to cover two-thirds of the money the schools expects this fall, if it loses two pending lawsuits against the error-riddled tax.

But today's deal—regardless of what happens in the courts—means PPS won't hire as many arts teachers as planned, city and school officials tell WW.

The city is assuming two-thirds of the financial risk from its first $3 million payment to schools from arts-tax proceeds, due in November.

If the city has to cover $2 million of the arts tax, it would take $1 million of it from its 2014-2015 annual payment to the Regional Arts & Culture Council, which backed the tax.

The deal, reached this afternoon following a month-long negotiation, allows Portland Public Schools to include arts teachers in its budget for the upcoming school year.

PPS officials expressed gratitude today.

"When he ran for mayor, Charlie Hales said that schools are his number-one priority," says Jon Isaacs, a PPS senior policy official. "And he's delivered on that commitment. This deal honors the will of the voters so that changes can be made for next year."

But this deal is the last one the city will make with school districts—it is not guaranteeing its next payment, due in March 2014.

Portland Public Schools says it will take its first payment and stretch it out across its year-long budget—essentially cutting its share of the arts tax in half, from $6 million to $3 million. It is now budgeting for 30 arts teachers, instead of the promised 45.

"There are some schools that would have gotten a full-time art teacher," says Isaacs. "Now they're getting a half-time art teacher."

The announcement contains more bad news for RACC. Along with handing the arts nonprofit part of the financial risk if the tax is overturned in court, Hales' office says it won't give RACC any arts-tax money until all legal challenges are over.

"They will not, in fact, get any money this year unless these lawsuits are decided," says Josh Alpert, a Hales policy adviser. 

The tax is due this Wednesday, May 15.