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July 28, 2015; Willamette Week (Portland, OR)

An audit of the arts tax in Portland, Oregon—an innovative public financing tool—says the $35-per-adult arts levy has failed to live up to the expectations of voters who approved it in 2012, according to a report in Willamette Week.

“Funds collected remain below estimates, administrative costs are higher than the required cap, and oversight is fragmented,” says the auditor’s report.

The tax was introduced by former Mayor Sam Adams and was supposed to generate about $12 million a year for art and music at elementary schools and nonprofits. However, it has only generated about $7 million to $10 million in each of the past three years.

And collection of the tax is not meeting expectations; city officials had estimated that 85 percent of eligible adults would comply with the law, but only 72 percent of people who were supposed to pay the tax in 2012 did so. Next year, the city will be referring scofflaws to collection agencies, which could increase administrative expenses, according to the article.

At the same time, the tax’s supporters promised to keep administrative costs capped at five percent of revenue, but the audit found that costs to implement the Arts Tax are above the five percent cap, with many costs, such as excess staff time at tax time, not reported.

Still, nearly $7 million went to schools in the 2014–15 school year to fund the six Portland-area school districts, a principal goal of the tax.—Larry Kaplan