Introduction to the Budget

This video, which has four parts, explains: what the City of Portland's budget is, how it works, where money comes from and how it can be spent, balancing the budget, and the overall process. You can watch it in whole above, or click the links in each section below to watch just the corresponding parts.

What is the City budget?

Watch Video 1 - What is the City's budget?

You may sometimes hear about the City of Portland's budget from your neighbors or on the news. But what is the City's budget exactly?

In your household, you may budget to keep track of your income and help you plan how much to spend.

View full size image of A household's budget may have income from a salary, investment income, and credit and loans. It may have expenses such as housing, groceries, childcare, other, and entertainment.

In the same way, the city budget is the plan Portland uses to decide how much money it expects to receive, and how those dollars will be used to serve the community, every year. Unlike your household budget though, the City budget has state laws it must abide by.

The budget shows what the City can afford to do, how services are funded, and what priorities community members and City Council want to invest in.

The money that the city collects is called revenue and the money spent to provide different services is called expenses.

The City receives revenue from a variety of sources like property and business license taxes, water and sewer bills, and service fees. These public dollars pay for the City's services that Portlanders rely on.

View full size image of The City's budget has revenue coming in from property taxes, business license taxes, water and sewer bills, and service fees, and other. It also has expenses like parks, water and sewer, housing, public safety, and much more.

Learning about the budget and taking part in the budget process helps community members share what matters most to them and have a voice in City decisions.

The City's multi-billion-dollar budget covers one year, from July 1 to June 30.

Utilities like clean drinking water, sewer and stormwater treatment take up the largest share of the City's budget, followed by transportation networks including sidewalks, bike lanes, and road maintenance. Other major areas include public safety—such as police and fire—and parks, green space and recreation, which serve families, businesses, and neighborhoods across Portland.

View full size image of This graphic shows that water, sewer, and stormwater services as well as transportation and roads take up the largest share of the City's budget. Other major areas include public safety and parks and recreation.

See the numbers behind the latest adopted budget (FY2025-26)

Where is City of Portland getting its money? How can the City spend that money?

Watch Video 2 - Where does the City of Portland get its money?

In your household, you have to make choices about how to spend a limited amount of money. Some of your expenses are fixed, or not easily changed — things like housing, transportation, or medical costs. Other parts of your budget are more flexible, like entertainment, travel, or dining out.

Cities work in a similar way.

Each year, the City has a certain amount of revenue — or income — coming in. Through the budget process, City leaders decide how to use that money to keep the City running.

The City receives two kinds of funding: restricted funds and unrestricted funds. City services are paid for by using a combination of both types of funds. 

Legally restricted funding, such as utility rates, transportation and federal funds are limited to certain types of uses. Unrestricted funding gives the city room to decide how the funds are spent.

View full size image of A graphic shows that most funding is legally restricted and can only be used for specific purposes whereas some funding is unrestricted and can be used more flexibly.

Most of the money the City receives is legally restricted, meaning it must be spent only on specific purposes. For example, Portlanders' water and sewer payments can only be used to provide 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.

A small portion of City revenue is considered unrestricted, meaning it can be used more flexibly. Most of these unrestricted dollars go into what we call the General Fund. The primary sources of that funding are property and business license taxes, along with utility and franchise fees.

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

Another way the City receives funding is through service fees paid by residents, as well as state and federal grants, loans, and transfers from other sources — each with different levels of flexibility in how the money can be used.

Some City services — like police and parks — rely heavily on unrestricted funds. Because unrestricted funds are limited and already support many core services, keeping the budget balanced requires careful choices. When the cost of programs grows faster than revenues, the City must either reduce services or identify new sources of revenue. By law, the City's budget must be balanced every year.

View full size image of This graphic shows that bureaus are funded with different combinations of unrestricted dollars from the General Fund and restricted funds.

What does it mean to balance the City's budget?

Watch Video 3 - Balancing the City's budget

Oregon law requires Portland to balance its budget every year. That means: The City cannot spend more money than it receives. 
If the City's revenue goes down, we must reduce costs — which can mean smaller programs, reduced grants, fewer staff, or cuts to services. If revenue goes up, the City can add or expand programs and services.

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.

Balancing the budget ensures the City is spending within its means. Just like in a household, when money is tight, you may need to adjust your budget and make trade-off decisions. For example, you may decide to lower your food spending to make the rent payment.

While households can usually decide how to spend their income, city governments don't have that same flexibility. When a budget year brings in less revenue than was expected, the City has to make careful decisions about how to shift funding—so essential services can continue.

Through the budget process, leaders face tough trade-offs to keep the City's budget balanced. That might mean moving funds from one program to support another, or in some cases, reducing services that community members rely on. 
 

What is the process for developing a budget and how can I get involved?

Watch Video 4 - Budget development and how to get involved

How does the City of Portland develop the budget every year — and how can community members take part in the process? 

The City's multi-billion dollar budget runs from July 1 to June 30. Budget development for the next fiscal year begins every fall. Here's the process:

View full size image of New fiscal year starts July. Budget Preparation in Fall; Current Service Level Budget and Forecast in Winter; Proposed Budget in Spring; Approved Budget and Adopted Budget by June 30, when the fiscal year ends.

Each year, the City begins by asking a simple question: how much money will we have, and how should we use it?

The City Budget Office starts by estimating how much the City expects to receive and how much it will spend. The Mayor then sets priorities for City services, with a focus on protecting programs that support Portlanders the most—especially people most affected by unfair systems.

With that guidance in hand, City staff work with the City Administrator to develop budget options. From those options, the Mayor creates a Proposed Budget.

By May 5, the Mayor shares the Proposed Budget with City Council. Council reviews it, makes changes where needed, and approves a final budget that reflects both community needs and Council priorities. City Council has the final say, though the Mayor may cast a tie-breaking vote if necessary.

In June, City Council adopts the budget so it's ready to take effect on July 1—when the new fiscal year begins.
After July 1, the City continues to monitor and adjust the budget throughout the following year. This technical process is called a supplemental budget. 

So where do community members fit into all of this? Early in the process, you can share what matters most to you. That might be through public comments, surveys, or budget education events designed to help you understand the choices ahead. Later on, as specific proposals take shape, there are more chances to weigh in—through listening sessions, comment forms, and other opportunities to respond. All of this feedback is shared with City Council and City leadership to help guide their decisions.

Learn about opportunities to get involved or provide input

Community input plays a vital role in shaping the City's budget. Because resources are limited and needs are many, every budget requires thoughtful tradeoffs. Your feedback helps City leaders make informed decisions about the services the City can provide.
Every voice matters in shaping the services, investments, and priorities for the year ahead.

Other resources

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.