Audit Finds Portland Arts Tax Fails to Deliver on Promises

A new city of Portland audit finds the $35-per-adult arts tax fails to live up to the expectations of Portland voters who approved the tax in 2012.

"Funds collected remain below estimates, administrative costs are higher than the required cap, and oversight is fragmented," the July 28 report from Auditor Mary Hull Caballero reads.

The brainchild of former Mayor Sam Adams, the tax was supposed to generate about $12 million a year for art and music at elementary schools and nonprofit organizations. Instead, it's pulled in $7 million to $10 million in each of the past three years.

And while city officials estimated that 85 percent or eligible adults would comply with the law, only 72 percent of people who were supposed to pay the tax in 2012 have done so as of June 2015. Starting next year, the city plans to turn scofflaws over to collections agencies, which could increase administrative expenses.

Meanwhile, according to what backers told voters, administrative costs were supposed to be capped at 5 percent of revenue. "Revenue Division costs to implement the Arts Tax are above the 5 percent cap for reported costs," the audit reveals, "and many division costs are not reported." Those unreported costs include staff time during tax season.
There was some positive news in the report. Nearly $7 million went to schools in the 2014-15 school year. "As promised, the arts tax provided adequate funds each year to fund the six Portland-area school districts at a rate of one teacher per 500 elementary school kids, achieving a primary goal of the tax," the report reads. 

Two Portland charter schools were denied arts tax revenue due to a technicality—a development that the audit calls "inconsistent with the ballot title statement," which promised money to charter schools as well as traditional public schools. But those two schools, Southwest Charter School and Ivy Charter School, will get money from the arts tax going forward, the report says.

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