A Portland city audit—released July 28—reported that nearly 200,000 city residents have not paid or filed tax exemption paperwork for Portland’s $35 arts tax. Approved by voters in 2012, the income tax is required of all Portland residents, 18 years or older, with an income over $1,000. The tax income pays for arts and music teachers in Portland elementary schools and benefits the Regional Arts & Culture Council which provides arts programs in underserved communities.

In addition, the audit noted other obstacles such as higher administrative costs than expected, as well as lower compliance rates—72% for 2012, 68% for 2013, and 61% for 2014. Yet, tax collection revenue has increased from $7.8 million in 2012 to now $10.5 million for the 2014 tax year.

With ongoing tax collection efforts surpassing the originally allotted 5 percent in administrative costs, auditors stated that the Portland City Council needs to either increase the 5 percent limit; provide money for the administrative costs from the city's general fund; or decrease administrative expenses by doing less tax collection. The report also recommended outlining clear guidelines on expected roles, responsibilities, and reporting from school districts and the Regional Arts & Culture Council.