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The Portland Metro Chamber this week sued the city of Portland in Oregon Tax Court over its recently reformed Arts Tax, arguing that the Portland City Council acted unconstitutionally when it reformed the tax earlier this year without referring those changes to voters.
The chamber of commerce in a statement says the lawsuit isn’t driven by the chamber’s dislike of the reforms to the Arts Tax itself, but because the council made unilateral changes to a tax that was created by a voter-approved measure in 2012. Any changes to a voter-approved tax, the chamber now argues, must go back to the voters who approved the program in the first place.
“Transparent process matters more now than ever, but some on the City Council decided to increase a voter-approved tax without referring it back to Portland voters, despite the city’s charter and the Oregon Constitution,” Andrew Hoan, president and CEO of the Metro Chamber, said in a statement. “Our city should demonstrate commitment to democratic values by giving residents more opportunities to vote, not fewer.”
Hoan said that the lawsuit “does not dispute the importance of what the Arts Tax funds, only how changes were made without the voters’ consent.”
Hoan is listed as one of two plaintiffs in the lawsuit, and he’s joined by local coffee shop owner and frequent testifier at City Hall Loretta Guzman.
“At a time when the very right to vote is under attack nationwide, this case presents a basic but sometimes overlooked principle: A vote is meaningful only if the government respects the decision the voters make,” the lawsuit states. “Portland should be the last place where the right of the people to vote on matters delegated to the people (and not to the City Council) should be ignored.”
The City Council voted in late May to make structural changes to the much-maligned Arts Tax, which has historically imposed a tax of $35 per person per year and pays for art teachers across local school districts and provides grants to arts nonprofits.
The council increased the income threshold for paying the tax from $1,000 up to $20,000 for single-filers and $40,000 for joint-filers, and increased the tax to $50 annually beginning in 2027. After 2027, the tax amount will be pegged to inflation.
The council said the increased rate would bring in additional revenue for arts programming, while also exempting low-income Portlanders from paying the tax. The resolution passed 7–5. The reform efforts came after years of grumbling by residents that the tax is onerous and that the money is not spent effectively or well, a sentiment that was partly vindicated by an audit of the program earlier this year.
At the time, the Metro Chamber warned that it would sue.
A city spokesperson declined to comment on the lawsuit, citing pending litigation.
