What is the purpose of a budget?
Budgets serve several important purposes in city governments. Cities use budgets to plan how to use money to achieve strategic goals, to communicate about priorities and investments, and to accurately account for the money.
What makes a good budget process?
The National Advisory Council on State and Local Budgeting defines a good budget process as one that accomplishes the following:
- Incorporates a long-term perspective,
- Establishes linkages to broad organizational goals,
- Focuses budget decisions on results and outcomes,
- Involves and promotes effective communication with stakeholders, and
- Provides incentives to government management and employees.
What are the parts of the City budget process?
The City of Portland’s budget runs as a fiscal year, which is a 12-month period beginning July 1 and ending June 30 the next year. The City is always working on budgets for two fiscal years:
- The current year, the fiscal year the City is in and is monitoring.
- The budget year, the upcoming fiscal year for which the City is developing a budget.
The budget development process, during which the City develops the budget for the upcoming year, has these main phases:
- Budget Preparation;
- Bureau Requested Budgets;
- the Proposed Budget;
- the Approved Budget; and
- the Adopted Budget.
The budget monitoring process, during which the City monitors the current fiscal year budget, has three main phases:
- Fall Budget Monitoring Process (BMP);
- Spring BMP; and
- Over-Expenditure Ordinance.
What laws and policies guide the budget process?
The City's budget must comply with Oregon Local Budget Law and with the City's Comprehensive Financial Management Policies. The Tax Supervising and Conservation Commission (TSCC), a five-member citizen board appointed by the Governor, reviews the budgets of all governmental jurisdictions in Multnomah County. The TSCC, together with the State Department of Revenue, is responsible for ensuring the City’s budget complies with Local Budget Law.
How is the budget structured?
There are two concepts that are important to the City’s budget: General Fund versus Non-General Fund, and one-time versus ongoing funding. In order to fully understand how the City funds its projects and programs, it is important to understand these concepts.
General Fund versus Non-General Fund
The General Fund, also known as "discretionary funds”, is the part of the budget that the Mayor and Council can use to support any programs and services with very few restrictions. The General Fund is funded with revenue sources that do not have restrictions on their use such as certain taxes, fees, etc.
Often referred to as dedicated funds, the non-General funds come from revenues dedicated for a particular purpose, such as grants, donations, or revenues from specific services. For example, building or inspection fees can only be used to support the delivery of those inspection services and the fees collected from park usage may only be used to support park programs.
Many city bureaus fund their programs with a combination of General and non-General funds.
One-time versus Ongoing funding
Under existing City financial policies, ongoing programs like basic police and fire services may not be funded using one-time resources. One-time resources are funds that only available once and will not be available in the future, such as grants. One-time projects are usually completed within one year or may require temporary funding until an ongoing funding source begins.
How can I participate in the City’s budgeting process?
- Monitor the current fiscal year budget spending. The City is currently monitoring the budget for Fiscal Year 2022-23
- Join the upcoming fiscal year budget planning. The City is currently developing the budget for Fiscal Year 2023-24.