After a series of meetings on the future of the universal preschool program, the board voted to postpone indexing the PFA tax thresholds to inflation.
PORTLAND, Ore. — After a series of meetings focused on the future of Preschool for All, the Multnomah County Board of Commissioners voted not to make any changes, for now, to the tax that funds the program.
The lack of a vote on whether to index the taxable income thresholds to inflation is a de facto win, if only temporarily, to stakeholders who worry that changes to those thresholds could hurt its long-term viability.
“The decision preserves the program’s current financial standing and keeps it on its voter-approved track to provide universal access to free, culturally responsive preschool by 2030,” a county spokesperson said in a statement.
Multnomah County voters approved the Preschool for All tax in 2020, and it went into effect at the start of 2021. As the name suggests, the program is eventually meant to pay for preschool for all 3- or 4-year-old children of county residents.
For single tax filers, PFA is a 1.5% tax on income over $125,000 and an additional 1.5% on income over $250,000. For joint filers, the thresholds increase to $200,000 and $400,000.
The tax rate is set to increase by 0.8% in January 2027. In the meantime, Multnomah County has amassed a significant amount of unspent funds from the tax: $425 million in dedicated savings, according to the county.
Despite that sizeable surplus, the county argues that these early-year overruns will be needed to fund the expansions in later years required to reach universal coverage.
The decision to postpone a vote on indexing the tax is a blow to those who have been trying to rein in the tax burden in Multnomah County, which business leaders in particular have been blaming for an outflow of high-earning residents.
An advisory group attached to Gov. Tina Kotek‘s Portland Central City Task Force this week released a list of ideas for staunching that flow, most of them concerned with dialing back local taxes. PFA received the lion’s share of the group’s critiques, and indexing was the most modest suggestion.
“It’s an inflation catch-up,” said Commissioner Julia Brim-Edwards, who supports indexing. “So that … inflation isn’t the sole reason you’re pushed into paying for a tax.”
But also this week, a group of Portland city councilors (namely those in the progressive caucus, or “Peacock”) sent a letter to county commissioners urging them to reject any changes to PFA — either indexing it to inflation, adding means testing for eligible families, or pausing collection of the tax.
“Voters approved this tax as-is, and altering it now would be an affront to the democratic process,” the letter said, in part. “Any changes to the tax must follow the promised process — including a technical review and public engagement — not a rushed, backroom deal. And decisions about local governance certainly should not be made or preempted by state politicians.”
Throughout the month, county commissioners have been participating in a review of the PFA program’s progress and financial future. A technical advisory group formed to evaluate the PFA program under the original ballot measure — composed of economists and early childhood policy experts — gave a mixed recommendation on whether to make any changes to the tax.
“The TAG (technical advisory group) will conduct a broader review of the tax structure over the coming months and provide a full report in early 2026,” the county said in a statement. “In their next phase of work, TAG members will explore subjects including the impact of Preschool for All on the region’s economic competitiveness and the demographic trends that impact our path to universal coverage.”
On Wednesday night, the board held a listening session to hear public testimony on the program, which went on for hours and included widespread support for protecting the program from significant changes.
“We saw real people power over the last couple of weeks when it came to Preschool for All,” said Candice Williams, executive director of Family Forward and a defender of leaving PFA untouched.
PFA will soon account for some 4,000 children across more than 200 locations, the county said, representing a 70% increase in seats since last year. Thousands of children are still on the waitlist for PFA.
Taking other publicly funded programs into account, there will be enough supported preschool seats for 40% of the county’s 3- and 4-year-olds in the coming school year, the county said.