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Wednesday, March 27, 2013

New Deadline to Pay Embattled Arts Tax: May 15

Posted by Denis C. Theriault on Wed, Mar 27, 2013 at 1:59 PM

Here's an important side effect of Mayor Charlie Hales' push to clean up the strangeness in Portland's new $35 arts tax by adding a $1,000 income minimum: The deadline to pay the thing is being pushed back a month, out to May 15.

How come? The ordinance adding the minimum hasn't been fast-tracked as an "emergency" law that would have let it take effect immediately. Instead, it's being shuffled along like a regular law. The Portland City Council took it up for the first time this morning, with a vote scheduled for next week, on April 3. After since regular laws need 30 days before becoming official, you can see how the old April 15 tax deadline was pretty much blown out of the water. The change also delays, by a year, the city's ability to include the tax in programs like TurboTax.

That Very Important Detail wasn't the only one to come out of today's meeting—which featured a theatrical lineup of foes and fans and well-meaning city bureaucrats struggling to make good on running a tax that, despite winning 61 percent approval last fall, remains dogged by flaws and legal questions. And they suggest an inconvenient road for a tax sold as a boon for arts teaching jobs and arts organizations working with poor kids.

In another surprise, thanks to a lawsuit in tax court filed by blogger Jack "Bojack" Bogdanski (first reported by WW), Commissioner Nick Fish said it wasn't rather uncertain whether the city would decide to distribute the money to schools and arts groups while that suit remains unsettled. Bogdanski is arguing the the tax, which applies to most every Portland income earner, is an unconstitutional head tax.

"The city may not have the luxury of distributing these funds," Fish said. "My own sense of the coucnil is that if we are liable for returning 100 percent of proceeds in the unlikely event we lose the constitutional case, it's highly unlikely we'll allow any distribution until that issue has been resolved."

The $1,000 minimum is just the first change Hales wants in place and the most immediate one. A resolution adopted by the council this morning directs the city's revenue bureau to return by July with recommendations that could lead to a dramatic overhaul of the tax.

Those changes could even negate a suit like Bojack's if the tax winds up more progressive and less regressive. They'll also likely spell out a threshold before the city decides to send a credit collector after scofflaws who don't pay. The idea that council might make changes was one reason why the measure was sent to voters as an ordinance, not a charter amendment.

For now, the added money the city must spend offering refunds to anyone who paid before the minimum and doing other work, along with a slightly reduced mark for revenue ($277,000), puts officials at risk of exceeding the 5 percent cap on administrative costs approved by voters.

"We believe we'll remain under the cap on a going-forward basis," said Revenue Bureau director Thomas Lannom. "However, any contingency space we had is being impacted by today's vote."

Oh, and there was one other thing worth mentioning: Lannom, noting complaints from citizens and city commissioners about the city's arts tax website, said his staff is making fixes and, gloriously, will "soon" accept debit cards for payment.

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