Facing a significant funding shortfall, Portland City Council put its stamp on an $8.6 billion balanced budget on Wednesday that delivers key services, supports public safety, addresses unsheltered homelessness and keeps open the city’s parks and community centers.
“We have a balanced budget!” Council President Elana Pirtle-Guiney declared near the end of the session.
Watch the meeting
In a budget session stretching to more than 11 hours, councilors considered a slew of amendments, some of which are still being analyzed by city staff. The overall contours of the budget are clear, however. It will:
- Expand Portland Street Response by adding 14 positions and expanding operating hours.
- Support eight alternative shelter sites that serve more than 800 people.
- Support an increase of 1,500 new overnight shelter beds over last year.
- Increase fees on rideshare services like Uber and Lyft from 65 cents to $2 per ride, generating $10 million to support the Portland Bureau of Transportation.
- Increase fees for city-owned golf courses and downtown parking.
- Reduce dozens of positions from the city’s workforce. (The exact numbers are still being tallied.)
During the Wednesday session, councilors voted to:
- Approve using $1 million from the Portland Police Bureau’s asset forfeiture fund to support evidence-based crime prevention and research on crime prevention strategies.
- Agree to use roughly $1 million from the opioid settlement to support long-term mental health and drug treatment housing in District 1. The opioid settlement requires drug manufacturers and retailers to compensate local, state and tribal governments for their role in the opioid crisis.
- Adjust allocations they made in the prior session to arrive at a balanced budget.
- Support a home-sharing pilot project to match renters with spare rooms in existing homes.
- Reduce staffing in Civic Life and restore proposed cuts to three community programs: Diversity & Civic Leadership, District Coalition Offices and Small Grants.
- Direct the city attorney to analyze the legal implications of having U.S. Immigration and Customs Enforcement facilities in sanctuary cities.
Path to a balanced budget
Facing a funding gap of roughly $150 million, Mayor Keith Wilson proposed a “back to basics” budget in May focused on curbing homelessness, increasing funding for Portland Street Response, strengthening public safety, and keeping parks and community centers open. To balance the budget, Wilson proposed a net reduction of 29.4 positions from the city’s workforce.
The budget shortfall in the General Fund was estimated at $93 million in February. Shortfalls in other funds have pushed the overall gap to roughly $150 million.
The council is slated to vote on formal adoption June 18. Adoption makes the appropriations in the budget legally binding and is the final step in the budget process.
City workforce
Because the amendments did not all specify how many positions would be affected, officials are still tallying the impact on the city’s workforce.
For comparison, the budget proposed by Wilson called for 186.4 positions to be discontinued and 157 positions to be added, for a net loss of 29.4 positions. After the amendments, the exact number of positions discontinued and added remains unclear.
In addition, the number of layoffs may be different, because some positions aren’t filled. Some employees whose positions are discontinued may have the option to apply for vacant positions.
Fiscal background
Portland's budget shortfall was driven by flagging revenues and higher costs.
On the revenue side, Portland’s economy is still recovering from the pandemic. Many downtown buildings struggle with high vacancy rates, pushing down their value and the tax revenue they generate. Parking revenues are down. Tourism has not yet returned to pre-pandemic levels. In addition, the city was able to use one-time resources over the past five years, which funded everything from homeless shelters to gun violence prevention. Some of those one-time resources came from a temporary influx of federal pandemic spending. These funds have now dried up.
Meanwhile, costs are climbing. Inflation has ratcheted up prices for the city, just like it does for consumers. Prices for equipment, materials, services, software, insurance and maintenance have all increased. Over the past 10 years, personnel costs have been rising faster than inflation due to salary increases, health care insurance and retirement benefits. Other factors driving up expenses include legal obligations such as building curb ramps, support for fortifying the levees on the Columbia River and high overtime costs due to a shortage of police officers and firefighters.
Portland is not alone in this predicament. Multnomah County is facing a $16 million budget crunch. Seattle recently closed a $250 million budget gap and San Francisco is looking at a deficit of $1 billion.
Process
The city’s budget process was substantially different this year. City administrator Michael Jordan released draft budget recommendations in February. The city gathered extensive public feedback through a series of listening sessions, culminating in the proposed budget released by Wilson in May. Councilors considered amendments and arrived at an approved budget in May. They amended the budget to arrive at an adopted budget on Wednesday. Formal adoption is scheduled for June 18.
-30-
Related
FY 2025-26 Approved Budget Media FAQ