Jack Bogdanski files constitutional lawsuit against Portland arts tax

Kari Chisholm

Last year, 62% of Portland voters approved the city arts tax -- a new $35-per-person fee that goes to fund arts organizations and arts for local schools.

That, despite the fact that it was one of the more controversial issues among BlueOregon readers - with strong arguments made both in favor and against.

Among the key arguments against? That the $35 tax is regressive, applying to nearly everyone regardless of income level.

And now, blogger and tax law professor Jack Bogdanski is taking the argument to another level. As reported by WW's Aaron Mesh, in a one-page lawsuit filed earlier this month with the Oregon Tax Court, Bogdanski alleges that the arts tax violates Article IX, section 1a, of the Oregon Constitution.

The relevant part of 1a reads:

No poll or head tax shall be levied or collected in Oregon.

So far, Bogdanski hasn't commented on the lawsuit - or explained his reasoning. But he's been blogging about it a lot.

About a week before he filed his lawsuit, Bogdanski wrote:

We still think the tax may be prohibited by the Oregon constitution. We're not paying it (except possibly under protest) unless the state supreme court tells us we have to. See you in Salem, opera lovers!

And then, writing just a couple of days before he filed:

[W]e all know the new Portland arts tax isn't really an income tax. It's a head tax. Which is why it's illegal.

Meanwhile, the day before the lawsuit, Bogdanski outlined a scenario that describes his argument that the city arts tax is constructed so as to define "income" in nonsensical ways:

Example. Mom has a good job. Her arts tax is $35. Dad stays at home and raises the kids. He has no income in the normal sense of the word. The oldest child, Daisy, just turned 18 and goes to school full-time. Daisy has no income in the normal sense of the word.

One of the younger kids brings home a flower and gives it to Dad. Dad now owes the city $35 arts tax. Daisy finds a penny on the ground, picks it up, and puts it in her pocket. Daisy now owes the city $35 arts tax.

As it turns out, it seems that Bogdanski was exactly right about this particular scenario - with Mayor Charlie Hales scrambling to amend the law so that such "silly" (his word) scenarios don't cause havoc:

"As written, any Portland resident with any income -- living in a household above the poverty line -- has to pay the $35 annual arts tax," a press release from Hales' office reads. "So in a household that is above the poverty line, a teenager who made $10 last year dog-sitting is expected to pay $25 of that $10 to the arts tax."

The release then quotes Hales: "No one crafting this tax intended this to be the rule. This is just silly. And we need to move right now to address the Law of Unintended Consequences."

To address this problem, the City Council will consider an emergency ordinance March 27 that would create an income threshold of $1,000. The change would take place immediately, and the Revenue Bureau would refund those who fall into that category but have already paid.

Now, despite my own concerns about regressivity, I ended up voting in favor of the arts tax. Not because it was the best policy option for funding arts in schools - but because it was the only policy option on the ballot. But it certainly seems like we should have seen an option with fewer logistical problems and constitutional questions.

What do you think? Did you support the arts tax? Do you think it's an unconstitutional head tax? And if so, what should the City of Portland do about it?

By Kari Chisholm March 19, 2013