Portland’s Arts Tax Audit Reveals Management Issues

PORTLAND, Ore. — A recent audit from the City Auditor’s Office indicates that Portland has struggled to manage its arts tax, approved by voters in 2012. The report highlights that there’s been little assessment of how effectively the tax has improved access to arts education for elementary students, particularly those from underserved communities.

The arts tax, set at $35 per income taxpayer, is designed to fund one art teacher for every 500 elementary school students, with remaining funds allocated to grants for art organizations. The city typically collects around $11.2 million annually from this tax.

City Auditor Simone Reed remarked that the city hasn’t adequately valued quality arts education nor ensured that grant funding reaches the intended students and communities. “It’s concerning that they’re not following through on promises made regarding arts tax funds,” she stated in a news release.

The report also noted that monitoring of partner organizations has not improved, despite recommendations from the Comptroller’s Office over ten years ago. Reed mentioned ambiguity regarding the role and authority of the Fund Oversight Committee, which raises the risk that funds might not be used correctly.

This week, a preliminary version of the 24-page audit was shared with the media. Once the official version is released, it will be made available to the public.

The audit included a response from City Administrator Raymond C. Lee III, who expressed agreement with many recommendations, acknowledging that they highlighted structural issues needing attention to ensure the fund’s sustainability.

In the audit, a list of twelve recommendations was presented to enhance the oversight and delivery of arts education, secure sustainable funding for grants, and ensure that funds are effectively utilized. These stem from findings indicating that the city had not recently set goals or metrics for measuring success, ultimately hindering its ability to assess student experiences.

Moreover, the auditors pointed out that the city has not defined the underserved student groups or collected data on how grant-winning organizations enhance access to arts education for these students.

• Grant-winning organizations are not required to report on their contributions to improving arts access.
• The funds available for grants are diminishing, partly due to taxes not being adjusted for inflation.

The city was also found to be paying school districts more than necessary to hire art teachers, which contributes to grant funding shortages. The audit suggests that the Arts Department should work with the Comptroller’s Office to renew agreements with school districts, ensuring fair compensation and sustainable grantmaking.

Furthermore, the report advises the Office of Cultural Affairs and Grants Management to collaborate in demonstrating that grants effectively improve access for underserved communities and advance program goals.

Audit committee members are urging enhanced oversight on how tax funds are spent. KATU will delve deeper into the audit findings on Wednesday, with further updates anticipated.