FILE - Jamie Dunphy pictured in a 2025 photo.
Eli Imadali / OPB
Portland’s unique arts tax will increase next year, but fewer people will have to pay.
On Wednesday, city councilors adopted a 43% increase in the annual tax and a plan to relieve an estimated 40% of current tax filers from paying.
The Arts Education and Access Tax, commonly called the arts tax, is a $35 tax on individuals who earn more than $1,000 annually that goes toward public school art programs and art nonprofits. The tax generates around $12 million annually, but has long been criticized by Portlanders for its clunky collection process and shrinking impact on local arts programs.
This proposal, led by Council President Jamie Dunphy, aims to fix some of those issues.
“We are doing as best as we can to try and make this less annoying and sustainable for the future,” said Dunphy at a May 13 council meeting.
Starting in 2027, the rate will increase from $35 to $50. Dunphy settled on that figure as a way to meet the rate of inflation since the tax was approved by voters in 2012.
The changes approved Wednesday also exempt anyone with a taxable income of $20,000 or less (or $40,000 for joint filers), meaning roughly 214,000 current arts tax filers will no longer need to pay. It’s expected to bring in the same amount of revenue in the first year, but will increase with inflation.
Yet, the city wasn’t able to adjust a common complaint: The tax is onerous to pay. Portlanders are required to pay the tax independent of their annual tax returns, often resulting in people forgetting they need to pay and missing the deadline. That’s led to late fees and collection agencies getting involved.
According to the city, this is a hard process to improve due to the way the tax was structured.
Earlier this month, Dunphy told councilors he would be open to further overhauling the tax.
“If we can come up with something that is more robust and is easier to pay and accomplishes the same thing,” he said. “I am very open to those conversations.”
The proposal has received support from the arts community and public schools that rely on funds to pay for arts programs.
Yet the tax hike didn’t land well with others.
Earlier this month, the director of Portland’s largest business lobby threatened legal action against the city if councilors approved the tax increase.
In a letter to city councilors, Portland Metro Chamber CEO Andrew Hoan argued that councilors don’t have the authority to unilaterally change a tax without voter approval. He pointed to previous legal rulings to support his case.
“If this council values its relationship with voters, then it is important to ask them for consent,” Hoan wrote.
At a previous hearing on the tax changes, City Attorney Robert Taylor told councilors he believes they aren’t required to refer the tax hike to voters.
The proposal passed with a 7-5 vote on Wednesday. Those opposed cited resistance to any new tax hikes and concerns that the proposal doesn’t go far enough to improve the tax.
“I think this is an example where the phrase ‘putting lipstick on a pig’ is really unfair to pigs because pigs are smart and the arts tax is stupid,” said Councilor Steve Novick at a May 13 hearing. He ultimately voted against the plan.
The new, higher arts tax is due April 15, 2027.
