PORTLAND — Portland’s controversial arts tax is legal, the Oregon Supreme Court unanimously ruled Thursday.
The tax does not violate the Oregon Constitution’s ban on a “head tax” because it exempts some taxpayers based on income and household resources, the court ruled.
Justice Jack Landau wrote the opinion, which was unanimously agreed to by all six justices who deliberated on the case. Landau announced this week that he will retire later this year.
Individuals and households at or below the federal poverty line are exempt from the tax, as are taxpayers earning less than $1,000 per year who live in non-poverty households. The arts tax also does not apply to income from Social Security or Oregon public employee pensions.
Portland voters in 2012 imposed the arts tax of$35 per person ontaxpayers age 18 and older with certain levels and types of income.
Wittemyer said he supported funding arts for children — like his trumpet-playing grandson –but filed suit because he could not condone an unconstitutional tax of any kind.
City officials countered that the tax is not a head tax, in large part because many people, including children, low-income individuals and households and retired public employees, are exempted.
Deputy City Attorney Denis Vannier argued those exemptions make the tax legal. The Portland Public School District and the League of Oregon Cities, which represents 241 incorporated cities, filed briefs supporting the city.
The city has struggled to collect the arts tax since its implementation. Voters approved the tax to expand arts and music education in schools and help fund other arts initiatives, but the city has only collected an average 74 percent of the tax each year, according to a report presented to the Portland City Council last week.
City officials have also overspent on collections, the report found. They exceeded a voter-mandated 5 percent cap on administrative expenses, diverting almost $1 million more from arts grants than they should have from 2012 to 2015, the report said.
Portland Mayor Ted Wheeler does not yet have a position on how to address the excessive administrative spending, his spokesman Michael Cox said in a text.
“He continues to work with his council colleagues on the issue,” Cox said.