Multnomah County Shortens Recommended Delay of Preschool Tax Increase, to Begin in 2028

Portland, OR. — The Multnomah County Board of Commissioners unanimously voted Thursday to postpone a scheduled increase in the county’s Preschool for All income tax until Jan. 1, 2028.

The increase had been scheduled to take effect at the beginning of 2027. Commissioners Shannon Singleton and Meghan Moyer proposed the one-year delay as an amendment to a resolution that originally would have postponed the increase for two years, until 2029.

County Chair Jessica Vega Pederson had supported the two-year postponement recommended by the Preschool for All Technical Advisory Group. The independent group was established to examine the program’s financial condition and advise commissioners about tax rates.

The advisory group concluded that delaying the increase until 2029 would give officials additional time to examine program costs and economic conditions without jeopardizing the program under most financial scenarios. It described a delay as a temporary and flexible way to address unresolved cost questions and reduce near-term economic risk.
Commissioners instead approved the shorter postponement, meaning the board is expected to revisit the tax increase during 2027.

Multnomah County voters approved Preschool for All in November 2020, and its income tax took effect in January 2021. The program seeks to provide tuition-free preschool to all interested families with 3- and 4-year-old children by 2030.

The tax currently applies to income above specified thresholds rather than a taxpayer’s entire income. Single filers pay 1.5% on taxable income above $125,000 and a combined 3% on income above $250,000. Joint filers face the same rates on income above $200,000 and $400,000, respectively.

The scheduled increase would add 0.8 percentage points to the tax rates. It was originally due to begin in 2026, but commissioners voted in 2024 to move its effective date to 2027. Thursday’s action represents the second postponement.

Updated population estimates from Portland State University’s Population Research Center influenced the county’s latest financial projections. Multnomah County has reduced its estimates of how many children the program will eventually serve as the number of young children and families in the area has declined.

Models presented to commissioners Aug. 20 indicated Preschool for All could continue operating while the increase is delayed. County officials said, however, that the program could not reach and sustain its planned level of service without an eventual rate increase.

The Technical Advisory Group had also recommended commissioning a detailed study of the actual cost of providing high-quality preschool in Multnomah County. The group said existing national market studies do not adequately reflect local expenses.

Preschool for All began offering seats in September 2022 and has expanded more quickly than its original schedule. County officials argue that the program improves school readiness, reduces child-care expenses for families and allows more parents to participate in the workforce.

The tax has also drawn criticism over its effect on the Portland area’s overall tax burden and questions about whether collections, enrollment and program costs have been accurately projected. The latest vote does not repeal or reduce the existing tax and does not eliminate the planned increase. It changes only the date on which the higher rates are scheduled to begin.