Portland’s arts tax has long been a source of consternation for taxpayers. Now, those complaints are coming from some of the very organizations meant to benefit from the tax.

On Monday, a group of 50 Portland arts organizations sent a letter to Portland elected officials asking to use unspent arts tax money to buoy nonprofits that have seen a decline in city funding in recent years.

“These funds should serve as a bridge toward a renewed era of increased public investment in Portland’s vibrant arts and culture community and creative economy,” the letter reads.

The request comes after the city reported $8.5 million in unallocated arts tax money — all while arts organizations that receive arts tax money saw a 44% dip in city financing.

The Arts Education and Access Tax, commonly called the arts tax, is an annual $35 tax on any Portlander who earns over $1,000 yearly. It generates roughly $12 million each year. Voters approved the tax in 2012, but it’s long been a source of civic grumbling for years due to its unusual collection process — and enforcement that can lead to hefty fines.

The majority of funding goes toward public school art programs, with the rest going to administrative costs and toward grants for arts nonprofits that offer arts education. In recent years, these nonprofits have seen a steep decline in their arts tax funding, while the amount of arts tax for schools remains unchanged.

According to the city, the $8.5 million in the arts tax is meant to be used as a reserve, to backfill in case of emergencies and cover unexpected costs. Its balance fluctuates over the course of the year.

Arts nonprofit leaders say the current decline in local arts funding is the emergency these reserves should be used to address. In their letter, the organizations ask that the city return nonprofit grant funding to previous levels, using the reserve funds.

“At a historic low point for arts funding, this reserve presents a critical opportunity to stabilize Portland’s arts ecosystem,” they write.

Since the city started collecting the tax in 2013, it’s grown more expensive to administer. And, because the tax has never increased to meet the needs of inflation, it hasn’t been able to pay for the same number of programs and grants year after year.

At the same time, new rules adopted by the city’s Office of Arts & Culture have shifted the fund to prioritize nonprofits with larger budgets, icing out scrappier nonprofits that relied on grant support. Those new funding guidelines also disqualify any organization with a P.O. Box, which also impacts smaller nonprofits.

How Portland’s arts tax let $9M go unused for years

The coalition calls out this change in their letter. Along with asking for reserve money, the group asks to restore access to grant funds to nonprofits with P.O. Boxes and budgets under $200,000, a cap recently set by the Office of Arts & Culture.

“Portland’s major art institutions anchor our cultural identity and strengthen our economic vitality,” said Karie Burch, co-interim director of the Portland Art Museum, in a statement emailed to OPB. “But a thriving arts ecosystem depends on organizations of every size having the resources they need to grow and succeed.”

Burch joined directors of the city’s other large arts organizations, like Portland Opera and Oregon Ballet Theatre, in signing on to the Monday letter sent to Portland City Council and Mayor Keith Wilson.

At least one city councilor is on board with their call to action.

Council President Jamie Dunphy has called to reform the city’s arts tax since entering office.

“The bottom line is that the Arts Tax Fund, despite its outsized impact on lower-income Portlanders, was never indexed to inflation and is steadily running out of resources,” Dunphy wrote in an email to OPB. “Unless Council acts, we will see more of those cuts to artists — and eventually we may even start to see cuts to the arts teachers, who so far the City has been able to keep whole.”

Dunphy doesn’t want to “fully raid” the arts fund reserves, since the city needs at least $5 million on hand to keep programs funded year-round.

He wants to restore the 44% cuts in arts organization funding — which would amount to $1.5 million annually. In the meantime, he wants the city to focus on overhauling the tax to ensure it’s equitably distributed and fairly collected. He’s also interested in introducing a new fee on streaming services and potentially other entertainment companies to pay for arts programs and venues.

That’s welcome news for those advocating for reserve funds.

Blake Shell is the executive director of Oregon Contemporary, a North Portland gallery. She also co-chairs the Portland Arts & Culture for Equity, an advocacy group focused on reforming the city’s arts funding. She told OPB she’s “encouraged” by Dunphy’s vision for arts funding.

She also asked Dunphy to focus on making changes that support organizations equitably to “ensure that, unlike in the past, no groups are left out.”

Dunphy said he plans to introduce an ordinance by April that would send $1.5 million back to arts nonprofits.

News Source : https://www.opb.org/article/2026/03/09/portland-arts-nonprofits-tax-reserves/