Money for God’s sake (a little 10cc there for our older readers).
One of Portland’s odditys (who knew this town had odditys?) is the annual Arts Tax. This is a $35 tax levied on all adults in order to fund local arts programs and K-5 music and art programs.
So far so normal. The main difference is that this is not levied out of property taxes, local income taxes or a sales tax. Instead we have to literally pay $35 to the city each year.
Essentially everyone over 18 is required to pay, there are exemptions for those who earn less than $1000 and who are in a family below the poverty level. But the vast majority of city adults have to file and pay.
Because every adult has to pay, it has faced several legal challenges against accusations that it is unconstitutional as a Poll-Tax. This argument has been rejected all the way up to the Oregon supreme court, the counter argument being that as there is an exemption built in, it isn’t a poll tax. It will be interesting to see if those goes further.
In theory because this is a ring fenced tax and is easily trackable it should be easy to determine if the money is being spent the right way. In practice though this seems to have been problematic.
The tax was brought in after a ballot measure in 2012. One of the requirements was that the overall cost to run the program would not raise above 5% of the overall raised money. However the city has been unable to stick to this, currently the cost is at 7.7% and the city is discussing removing the 5% cap. So there is quite a bit of resentment about the tax. Part of it is a vicious cycle, as costs go up, it becomes more contentious. Therefore less people pay (currently it’s around 73%) so more costs are required to force collection.
I think in principal Portland is the type of city where people are happy to contribute to the arts, but they want visibility on where the money is going. By making it a completely separate tax, it makes the program very visible. This tax is a small portion of the overall city budget but it is a very public part.
So what is the solution. Should it be wrapped up into the general revenue for the city? Possibly, but that would mean less oversight and ringfencing for the money. Maybe a progressive rather than flat tax is required so that higher income people pay more.
At the end of the day the tax has done good (the number of elementary art and music teachers has tripled in 4 years) but it seems to be a case study in how not to do this.