For years, millions of tax dollars meant for arts programs in Portland have sat unspent in city coffers.
The nearly $9 million in reserves comes from the city’s Arts Access Fund Tax, the oft-bemoaned fund familiarly known as the “arts tax.”
The annual $35 tax on any Portlanders who earn over $1,000 yearly generates around $12 million each year. It’s largely dispersed to public school art programs and art nonprofits.
Reserve funds aren’t uncommon for city programs and are often kept for emergencies. But the arts fund isn’t authorized to have reserves — and has no policy outlining their use. In spite of this, the city has accumulated millions of dollars in reserves since the arts tax started pulling in cash in 2013.
The untapped funds surface as city leaders raise concerns about unspent dollars identified in other city bureaus, prompting city councilors to call for outside audits ahead of another tight budget year.
The news comes as a blow to arts nonprofits that’ve seen a significant dip in arts tax dollars in recent years.
“If these funds were earmarked for a rainy day, this is the rainy day,” said Blake Shell, the co-chair of Portland Arts & Culture for Equity, an advocacy group focused on reforming the city’s arts funding.
Leader of Portland Arts & Culture for Equity Blake Shell, right, and Evan Lewis, a co-chair of Portland Arts & Culture for Equity stand in an exhibit at the Oregon Contemporary gallery in Portland, Ore. on Feb. 4, 2026. Shell is advocating for several nonprofit groups that have felt the impacts of declining grant money from the Portland Arts Tax, a fund which records show is currently sitting on about $9 million unallocated dollars.
Saskia Hatvany / OPB
Some at the city say this kind of financial cushion in the arts fund isn’t uncalled for. But it doesn’t mean the tax is working.
“This is what happens when we pit people against each other to compete for an increasingly small pot of money,” said Council President Jamie Dunphy. “It’s a perfect storm of failure. The entire tax needs to be rethought.”
Portland-area taxes have received much public, and political, criticism in recent years. But the lens of focus has been trained largely on taxes on high-income earners intended to benefit homeless services and turbocharge subsidized preschool for all. Those 2020 voter-approved programs also received scrutiny for collecting revenues beyond anticipated levels and not distributing them swiftly enough.
All the while, the tax that predated those programs by years — which has become a punchline in Portland for its ineffectiveness — has been sitting on its own cache of untouched money.
A quick start and sharp decline
The arts tax was passed by Portland voters in 2012, with the stated goal of improving youth access to arts programming across the city. The tax has raked in between $11.5 and $13.5 million annually.
The bulk of that money pays the salary for one public school arts teacher for every 500 elementary school students in the Portland area, with a small amount going to tax collection costs and the salary of the city’s arts education coordinator. The rest of the money is set aside for grants, specifically, to “non-profit organizations and schools to provide high-quality arts access for kindergarten through 12th grade students and to make arts, culture experiences available to underserved communities.”
Those grants were previously held and distributed by the Regional Arts and Culture Council. After councilors raised concerns with the nonprofit’s transparency, that role was handed over to the city’s new Office of Arts & Culture in 2024.
Since voters approved the tax, it’s become a perennial headache.
Unlike other regional taxes — which are based on household size, not individuals — Portlanders are required to pay the Arts Tax independent of their annual tax return process. This anomaly has led to many Portlanders accidentally missing payments, leading to late fees and collection agency involvement. The city was unable to provide to OPB the percentage of taxpayers who pay the tax on time each year.
It’s become dramatically more expensive to administer the tax, as costs have more than tripled since 2013, eating up nearly $2 million of the annual revenues. Meanwhile, the $35 flat tax has never changed to meet the needs of inflation, impeding its ability to pay for the same number of programs and grants year after year.
“So now we have a decreasing pot of money, an increasing challenge in collecting outstanding dollars, and increasing tensions between schools and the arts orgs which are just getting hollowed out,” said Dunphy, who represents East Portland in District 1. Dunphy previously sat on the board of Music Portland, a nonprofit that has received arts tax dollars.
The revenue dips have been felt the hardest by nonprofit arts organizations. Last year, the amount of arts tax dollars going to nonprofits dropped by roughly 44% compared to the previous year. (Public schools, meanwhile, saw a 5% increase.) At the same time, a new city policy has ensured that more arts tax dollars go to organizations with bigger budgets, abandoning a previous policy that considered equity.
For example, the Oregon Symphony Association received $391,000 last year, while $21,000 went to Portland Taiko, an organization that teaches and performs traditional Japanese drumming.
Data supports the sentiment raised by arts advocates that public dollars for the arts are declining in Portland. Southern Methodist University in Texas conducts an annual report on public arts funding across the country. In 2016, Portland ranked 47th for the amount of government support its arts community received. In 2025, it had dropped to 120th.
Funding sits untapped
These pressures are why Shell and others formed Portland Arts & Culture for Equity.
Shell is the director of Oregon Contemporary, a gallery in North Portland, which received $28,000 in arts tax dollars last year.
“A few of us started speaking out, and then connecting together and thinking about how small and mid-sized organizations that are focused on diverse communities could band together,” said Shell.
In January, she and others noticed a note in the December annual Arts Access Fund report, published by the volunteer committee that oversees the fund, about a “reserve balance of approximately $8.5M.” The committee wrote that it was the first year they’d been made aware of these reserves, but acknowledged it had been accumulating since 2013.
“It felt buried,” said Shell. “Maybe it’s not a big deal for the city. But for some of these organizations, $10,000 is the difference between keeping a staff person or staying open, and certainly $8.5 million more than fills that gap.”
She wasn’t the only one shocked by this news. In emails obtained by OPB, Office of Arts & Culture Director Chariti Montez expressed surprise when Revenue Division Director Thomas Lannom shared information about the reserves last spring.
“Where is the reserve publicly documented and accounted for?” Montez asked Lannom in a May 19 email. “No one on my team was aware of a reserve, and at one point, RACC got scolded for having a reserve of $3M.”
Montez is likely referring to when, in 2018, the arts council raked in an unanticipated $3 million in arts tax revenues.
According to Lannom, the millions in arts tax reserves largely comes from the first year of tax collections. While the city collected the new tax in 2013, it did not have any expenses or grants awarded until the following year, “so there has been an ongoing positive cash balance in the fund equal to about one year of revenue more or less,” Lannom wrote in an email response to Montez.
According to city revenue records, the city collected about $7.3 million in that first year. It’s since grown to over $8.5 million, bolstered with some funding left over during years with elevated revenues.
Yet, while the arts tax revenues have dipped over the years, the city hasn’t ever established a plan for what to do with the unallocated money.
“We probably should have tapped the reserve this fiscal year to keep your office whole,” Lannom said in his email. Montez’s office pays for nonprofit arts grants.
Can the arts tax have reserves?
Most city funds have explicit language directing how reserves can be spent, and how large they should be. For instance, the city requires its transportation reserve fund to be 5% of the Portland Bureau of Transportation’s budget.
That’s not the case for the Arts Access Fund. There is no code language allowing the fund to even have reserves, let alone directing how they should be used. Instead, they remain a holding place for money the city never budgeted.
In December, the city’s Finance Committee heard a presentation from the City Budget Office about how reserves can be used. A slide deck from the presentation reads: “Reserves should not be used as a ‘holding place’ for unprogrammed funds.”
The city did not make Lannom or Montez available for interviews for this story. But city spokesperson Elliott Kozuch told OPB that maintaining a year’s worth of reserves helps “ensure continuity in arts education and ongoing support for local arts organizations.”
City councilors were first alerted to the outstanding revenue last May. Since then, Kozuch said, city departments have been talking about what to do with the money.
Last summer, the Revenue Division suggested some new parameters to the fund, in hopes of clearing up how it could be used. In that draft document, obtained by OPB through a public records request, officials suggest capping the funds reserve at $3 million. City staff say this proposal has yet to be reviewed by city leadership.
Dunphy isn’t opposed to the reserve. He said that, because the arts tax is often collected year-round due to late payments, it’s important to have a “cushion” to keep funding moving to schools and nonprofits.
FILE: Portland City Council President Jamie Dunphy, pictured in 2025.
Eli Imadali / OPB
An overhaul?
Shell agrees that reserves are important to keep a fund afloat. But she says that, with such a massive decline in arts tax funding in recent years, this is the moment to tap them.
“I think that we’re at a point right now where there could be an argument to use it in full,” she said. “I would say it feels like an emergency.”
She has the support of another group of Portlanders who rely on arts funds: teachers. Angela Bonilla is the president of the Portland Association of Teachers, the union that represents educators at Portland Public Schools, a district facing its own budget uncertainties.
In a statement shared with OPB, Bonilla said the union “supports spending down reserves in times of crisis.”
Dunphy doesn’t disagree with this, either.
“I’m of the opinion that we need to get as many dollars out as quickly as possible with as little overhead as possible,” he said.
He isn’t surprised that, with depleting revenues, arts organizations are scrambling to find any funding they can. That’s why Dunphy, the newly elected council president, is gearing up for a fight to reform the arts tax.
From indexing the tax to match inflation, to ensuring that the money is shared equitably among organizations, Dunphy wants to see big changes to the tax.
His goal is to get a reformed arts tax before voters in November 2028. That will require a change in attitude for Portlanders who’ve grown increasingly concerned with new or expanded taxes. He knows it’ll be a challenge.
“It’s worth saying that people in Portland love art, people in Portland love kids, and everybody hates the arts tax,” he said. “But it needs to get done. This isn’t sustainable.”
