Introduction to the Budget

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Purpose of a City Budget

Budgets help cities plan how to use money to achieve strategic goals, communicate about priorities and investments and accurately account for money.

The City of Portland provides funding for the City Administrator’s Office and four services areas: City Operations, Community & Economic Development, Public Safety, and Public Works

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Funding Sources

The money spent on providing different services is called expenses, while the money that is available to pay for expenses is called revenue. Revenue is generally divided into two types: legally restricted funds, and unrestricted revenue in the general fund. In Portland’s budget, nearly 90 percent of revenue is legally restricted to fund specific services, and about 10 percent is unrestricted —but still dedicated to core services. 

View full size image of A graphic shows 90% of the City of Portland's funding is restricted to specific uses, while 10% is unrestricted.

Restricted funds can only be used for specific purposes that are outlined in the law. For example, Portlanders’ water and sewer payments can only be used to support water and sewer services, and vehicle registration fees can only be spent on roads.

View full size image of A graphic shows examples of restricted funding, such as water and sewer bills, parking and vehicle registration, and permit fees.

General fund revenues have fewer restrictions. They can be used to fund services to address the City's needs. In Portland, most of the general fund supports fire, police and parks. The rest of the general fund is divided among the other services.

View full size image of A graphic shows how the general fund is formed and used. Details in web text.

Balancing the Budget

The budget must be balanced each year. When revenue is higher than expenses, the City has the flexibility to add more programs, expand existing programs and save money. On the other hand, when revenue is lower than expenses, the law requires the City to reduce expenses to balance the budget. Without more revenue coming in, adding or expanding programs requires difficult decisions about which programs to prioritize with limited funding. 

View full size image of A graphic shows two teeter totters: one weighted down by revenues that are bigger than expenses, the other weighted down by expenses that are higher than revenues.

The Budget Process

The City’s 12-month financial cycle begins July 1 and ends June 30 of the following year. 

The budget process includes five phases: prepare, draft, propose, approve and adopt. Every year, the City makes a forecast of revenues and expenses, which determines whether there is additional funding available or if a cut is required.

Once the mayor releases budget guidance, service areas start developing budget concepts. The city administrator and their leadership team workshop those concepts to create a draft budget – essentially, a recommendation to the mayor.

The mayor proposes their balanced budget, which they pass to the City Council to amend and approve. Finally, City Council votes to adopt the approved budget before the end of the fiscal year. If needed, the mayor serves as the tie-breaker during the approval and adoption phases. 

View full size image of A graphic shows the progression through five stages of the City's budget process: prepare, draft, propose, approve and adopt.

Learn about the latest adopted budget

See the highlights of the FY2025-26 budget

Budget Glossary

Look over the City's Budget Glossary for help understanding the language used in budget documents and meetings. It is a helpful list of terms and abbreviations used throughout the budget.

Get Involved

Interested in helping shape the City’s budget?

Learn about opportunities to get involved or provide input.