Preschool for All Raked In More Than $18 Million From Winning Powerball Ticket

Late last month, the Oregon Lottery identified the three people who shared the $1.3 billion Powerball prize, the biggest in Oregon history: Cheng “Charlie” Saephan, 46, his wife Duanpen, 37, and their friend Laiza Chao, 55.

The threesome chose the all-cash option, which pays less, sooner, so they will share $621 million, before taxes.

Another big winner went unnamed as Charlie Saephan held up the big posterboard check for the press on April 29: the Preschool for All program. Because the ticket was sold in Multnomah County, the program is entitled to 3% of the winnings, or $18.6 million, a windfall for a program that is already swimming in cash.

As of June 30, the preschool program had a balance of $344 million, having raised a larger-than-expected $187 million from taxpayers in the fiscal year ending June 30, 2022, and $200 million in fiscal 2023, the latest period for which figures are available.

Taxes from the Saephans and from Chao account for about 10% of those annual totals. Chao, who lives in Clackamas County, still must pay because the ticket was sold in Multnomah.

The Portland Revenue Bureau, which collects the tax for the county, “has sent out a courtesy letter to each party informing them of their tax responsibilities as it pertains to PFA,” Multnomah County said in a statement to WW. “Based on the amount of lottery winnings, each individual will be subject to the full 3.0% tax rate. We cannot provide an exact amount of tax receipts to be received as that will depend on individual tax filings.”

The lottery winnings will boost other tax coffers, as well. The Metro regional government will collect about $6.2 million through its supportive housing services tax, a 1% levy on all taxable income of more than $125,000 for individuals and $200,000 for couples filing jointly. The state of Oregon, which has a top marginal tax rate of 9.9%, will collect about $61 million.

Conceived by the Democratic Socialists of America and finessed by then-County Commissioner (now Chair) Jessica Vega Pederson, Preschool for All is a tax on the wealthy, by design. Single tax filers pay 1.5% on income above $125,000 and 3% on income over $250,000. For married people, the thresholds are $200,000 and $400,000.

Multnomah County residents passed Preschool for All by a two-to-one margin in 2020, at the height of the pandemic. The program has been slow to create new preschool slots, angering the relatively small number of people who pay it.

Because the program is flush with cash, Vega Pederson plans to propose delaying an increase in the tax that’s set for 2026, when the rates are supposed to hit $2.3% and $3.8%.

“This is possible because forecasts show the program will have enough savings to provide free preschool to all Multnomah County 3- and 4-year-olds by 2030, right on schedule,” Sara Guest, a spokeswoman for Vega Pederson, said in an email.

Vega Pederson is convening a group this summer to examine the preschool program, Guest said, and the delay will provide an extra year of data to guide its recommendations.

“We’ll continue to keep a close eye on these funds,” Guest said.

Some data suggest that the high tax burden, due in part to Preschool for All, could be chasing high earners out of Multnomah County. The number of people paying the tax fell 19% to 4,919 in tax year 2022 from 6,063 in 2021, according to county figures. There are other possible reasons for the decline, including a delay in returns. And wealthy people may have made less in 2022.

Whatever the case, there are three new payers this year, and they are whales.