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Arts Tax Continues To Puzzle Portland Officials

Arts tax flier.

Arts tax flier.

Rebecca Galloway/OPB

Portland’s arts tax is off to a rocky start. Portlanders have eight days left to pay the $35 tax that voters approved last fall. City officials just announced that some people who have paid the tax already, didn’t have to.

Word came out of the office of Portland Mayor Charlie Hales Tuesday that certain kinds of retirement income are exempt from the city’s arts tax. Dana Haynes is the mayor’s spokesman.

“So if you receive your money in a given year from PERS, from Social Security, or from a federal pension, we – the city – can not tax that.” Haynes says the city is responsible for the confusion.

“Whose fault? Yeah, the city’s fault. The administrative rules which were written in 2012 were unclear. They said ‘if you make money, you have to give it.’ It didn’t say ‘oh, but by the way, you’re exempt if you’re money is from PERS, for instance.’ ”

The city will refund $35 payments to retirees who are now considered exempt from paying it.  The city doesn’t know how many people fall into that category – and officials can’t easily know how many of them might demand refunds.

Mary Pliers is 75 years old, and gets her income from PERS and Social Security. She voted against the arts tax – but paid her $35. However, she doesn’t want the refund she’s likely eligible for.

“Since I paid the tax, I know it’s going to go for some – even if it goes to some, the symphony orchestra – that’s fine with me. Next year, of course, I wouldn’t pay it.” 

The deadline to pay the tax is next week. 

Pliers volunteers at a Portland senior center along with 86 year-old Mary Lindsley. They’re both probably eligible for refunds, and aren’t planning to ask for them. They’re confident some of the seniors they see will, though.

Lindsley says many of the elderly folks she knows were worried — scared even — not to pay it.

“This was an extra shock to many, many people — and mostly to the low-income people, because they thought that they would get into trouble, if they didn’t pay it.”

The regressive nature of the tax has drawn criticism, even among arts supporters, like Portland commissioner Steve Novick. In an appearance on OPB’s “Think Out Loud,” Novick said he wanted to replace the $35 tax with a graduated tax, based on income.

“Based on conversations I’ve had with the legislative revenue office, I think that to raise the same amount of money we were trying to raise with this, it would have to be something like 1.5 percent of your Oregon income tax payment.”

Novick says his approach would cost a Portland couple on average about $75.

Mayor Charlie Hales has asked the revenue office to come up with recommendations by July. In the mean time, the tax faces two lawsuits alleging it’s an illegal “head tax.”

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