This week, Portland City Council adopted the fall technical adjustment ordinance for fiscal year 2025-2026—a routine budget adjustment that aligns the City's budget with updated year-end financial results from the previous fiscal year.
The adopted ordinance adjusts funding across 48 City funds, trues up beginning balances and closes a shortfall in the General Fund caused by lower-than-expected revenues. The adjustments keep the budget accurate, transparent and in compliance with state budget law, which requires the City to maintain a balanced budget.
What is the fall technical adjustment ordinance?
The fall technical adjustment ordinance, also referred to as the Fall TAO, is the first opportunity each fiscal year for Portland City Council to make technical adjustments to the current budget. It's one piece of the broader budget process.
When the City's budget is adopted each June, it is based on estimates for the fiscal year ahead, which runs from July 1 through June 30. By fall, the City has updated year-end financial results and other information. The ordinance makes technical adjustments to replace estimated beginning balances with actual final balances, adjusts appropriation levels in various funds to reflect operational needs, carries forward funding tied to active contracts and agreements, addresses technical corrections and updates—and ensures the budget remains balanced.
What is different about this fall?
For the first time since before the pandemic, the City of Portland entered the fall budget adjustment process with a General Fund shortfall. General Fund discretionary revenues came in below forecast, driven primarily by lower Business License Tax collections. At the same time, one-time federal and pandemic-related resources have ended, and bureau underspending has returned to typical levels.
A shortfall in the fall is unusual. In most years, the City sees some amount of one-time resources available in the fall because revenues exceed expectations or bureaus spend less than anticipated. That was not the case this year.
After updating beginning balances, making required corrections and accounting for contract and policy carryovers, the General Fund needed approximately $18 million in additional adjustments to maintain a balanced fiscal year 2025–2026 budget.
What did City Council adopt this week?
The adopted fall technical adjustment ordinance includes:
- Adjustments across 48 City funds, largely reflecting updated beginning fund balances
- Reconciliation of the General Fund beginning balance with audited fiscal year 2024–2025 results
- Technical corrections, including a required transfer to the General Reserve Fund and the annual transfer of short-term rental revenue to the Housing Investment Fund
- Carryover of funds tied to active contracts such as shelter operations, violence prevention programs, Parks Local Option Levy commitments and Central City planning work
- General Fund resources returned, including a state refund and a correction from the Portland Bureau of Transportation
- Updates to future budgets, including an additional $4.46 million in fiscal year 2026–2027 to rebuild the health fund reserve
- Position adjustments needed to support current-year operations