Click here for the presentation slides of Introduction to the Budget
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 six services areas: Budget & Finance, City Operations, Community & Economic Development, Public Safety, Public Works and Vibrant Communities
Funding Sources
Money coming into the City is called revenue, and the money spent on providing different services is called expenses. 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.
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.
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.
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.
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 balanced draft budget – essentially, a recommendation to the mayor.
The mayor proposes their 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.
Get Involved
Interested in helping shape the City’s budget?