***This is the news release from Mayor Charlie Hales office explaining the problem with the Arts Tax.

MONDAY, MARCH 18, 2013 – The Arts Tax, as approved by voters in November 2012, contains a significant flaw, and the Portland City Council will take action this month to address the issue.

As written, any Portland resident with any income – living in a household above the poverty line – has to pay the $35 annual arts tax. So in a household that is above the poverty line, a teenager who made $10 last year dog-sitting is expected to pay $35 of that $10 to the arts tax.

“No one crafting this tax intended this to be the rule,” Mayor Charlie Hales said Monday. “This is just silly. And we need to move right now to address the Law of Unintended Consequences.”

To fix that problem, Council will discuss an emergency ordinance at the March 27 City Council meeting. The rule change would create an income threshold or $1,000, beneath which income is not taxed.

The change would be effective immediately and would affect Portland residents paying this year’s arts tax.

For those who already have paid, but whose annual income is less than $1,000, a refund will be required. City Revenue staff is aware of the situation and will work to address those who fall into this category.

There may be other issues of fairness in the arts tax to be considered at a later date.