Portland’s $35 Arts Tax Fund Built an $8.5 Million Reserve, Prompting New Spending Policy Calls

A voter-approved tax with two mandates

Portland’s Arts Education and Access Income Tax—widely known as the Arts Tax—was approved by voters in 2012 and first collected in 2013. City code sets a $35 annual tax on most income-earning Portland residents age 18 and older, with exemptions tied to federal poverty guidelines and other eligibility rules.

The structure of the program is prescriptive. Net revenue must be distributed first to support certified K–5 arts teachers across the school districts serving Portland students, using a formula equivalent to one arts teacher for every 500 elementary students. The code also caps the City’s arts education coordination costs at up to 3% of net revenues. Remaining funds are designated for arts access grants and programs.

How an $8.5 million balance accumulated

As of fiscal year 2025, the Arts Access Fund carried a reserve balance of approximately $8.5 million. The fund’s oversight committee identified the balance and attributed it primarily to the program’s initial year of tax collections, with ongoing disbursement and “true-up” processes that reconcile payments to school districts based on actual enrollment.

The same oversight report also documented year-to-year revenue movement. Total tax collections were reported at $12,364,701 in fiscal year 2024, followed by $11,893,024 in fiscal year 2025. Net revenues for fiscal year 2024 were reported at $10,415,723 after collection costs.

What the Arts Tax paid for in schools and grants

In the 2024–25 period, the fund disbursed $7.8 million to schools, supporting roughly 58 full-time equivalent K–5 teaching positions funded directly by Arts Access dollars, alongside additional district-funded arts positions. The oversight committee reported that about 28,700 children had access to certified arts educators supported by the fund and that the six area districts averaged an arts staffing ratio better than the minimum required by the ballot measure.

On the grants side, the oversight report stated that in FY2024–25 the fund generated more than $2 million for grants and, when combined with a prior reserve, supported $3.3 million in general operating support grants and $340,000 in project grants.

Policy questions raised by the unspent balance

The presence of a multi-million-dollar reserve has shifted attention to governance: how large a balance should be maintained, what it should be used for, and how it should be disclosed and forecasted. The oversight committee called for development of formal policies addressing the remaining fund balance, including minimum reserve size and distribution approach.

• Tax: $35 per eligible adult Portland resident each year, with exemptions tied to federal poverty guidelines and other eligibility rules
• Priority use: K–5 certified arts teachers, using a 1 teacher per 500 students formula
• Documented reserve: approximately $8.5 million as of FY2025

The Arts Access Fund is required to pay school districts first for K–5 arts educators; remaining dollars support arts access grants and programs.

Separately, City Council has adopted code changes in recent years that shift responsibility for distributing remaining funds away from the Regional Arts & Culture Council to the City’s arts office, placing additional emphasis on how reserves and annual grantmaking are managed within City government.