Oregon Governor Clashes With County Over Preschool Tax Blamed for Wealth Exodus

Oregon Governor Tina Kotek has expressed concern that Multnomah County’s Preschool for All tax may be the reason why high-income residents are leaving the Portland area.

Multnomah Chair Argues Concerns Rely on Old Data

However, County Chair Jessica Vega Pederson, says the Governor is basing her concerns on outdated tax information.

Kotek based a letter expressing her concern on a report that stated that Portland had lost more than 1,700 taxpayers since 2021. The Governor’s letter said data indicated a decline of nearly $55 million in tax revenue from top taxpayers collected between 2021 and 2024 in Multnomah County.

Vega Pederson says Kotek used outdated data on Preschool for All tax filers in the 2023 tax year. According to more recent data, there was an increase of 5,429 tax filers between 2021 and 2023.

Approved by voters in 2020, the Preschool for All tax is designed to provide 11,000 no-cost preschool spots by the year 2030. To achieve this goal, high-income earners whose remuneration exceeds $250,000  individually or $400,000 jointly, pay 3% of their income to the program.

In her letter, Kotek states that high-income earners in Multnomah County have the second-highest tax rate in the country at 13.9%.

The Governor has called on the County Chair to either reduce the tax rate payable for the Preschool for All tax or to freeze taxation for three years. Instead, she says maintaining existing preschool attendance levels should be the main focus.

Kotek also suggested that Multnomah County partner with the state by combining initiatives and finding alternative solutions for tuition-free preschool options statewide.

The Program Collected $213 Million More Than Estimated

Multnomah County has collected more money than originally estimated for the preschool program – $213 million more in the first three years. Currently, Preschool for All has $480 million cash on hand, according to County Economist, Jeff Renfro.

The Governor pointed out that operating the program cost slightly more than $106 million in the 2025 fiscal year.

The Preschool for All program has also raised concerns among Multnomah County Board members who are skeptical about the financial burden placed on the county’s top earners and, in response to Kotek’s earlier appeal, agreed to delay a proposed tax increase of 0.8% last September.

Also taking a closer look at the program are members of the Senate’s Finance Committee who verbalized concerns during the legislative session yesterday. Like Kotek, they believe the program duplicates an existing statewide preschool initiative.