Chamber Threatens Court Battle Over Portland Arts Tax Revamp

The largest business group in Portland is ready to sue the city council if it moves forward with a plan to change the city’s arts tax. In a letter sent to all 12 council members, the Chamber said that lawmakers cannot alter taxes without voters’ consent. The warning is stronger than before; it spells out the legal steps the Chamber will take if its concerns are ignored. The city’s top attorney, however, believes the council can legally make the changes. He argues that voters already give the city power to modify taxes when they approve them. The dispute centers on a tax that was set in 2012 to help fund arts programs in schools and community groups. The current rate is $35 per person each year, bringing in roughly $12 million.

The Chamber’s proposed plan would raise the tax to $50 and lower the income threshold that forces people to pay it. It also aims to exempt about 44 % of those who now owe the tax by raising the filing limit to $20, 000 per person or $40, 000 for a household. Both the Chamber and city officials agree that any changes must reflect voter approval, but they disagree on whether the council has the authority to act without a new vote. A study commissioned by the Chamber last year confirmed that a city cannot create or expand taxes on its own. The report was sent to council members and is the basis for the Chamber’s legal threat. The council, meanwhile, says it has “concurrent legislative authority” and that the changes align with the original purpose of the tax. The debate will play out in a council meeting scheduled for later today, as both sides prepare to defend their positions.

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