The City of Portland’s financial challenges – and options to help balance the budget – are coming into clearer focus, according to a memo sent to the Portland City Council today.
In response to requests from the council, City Administrator Michael Jordan and Chief Financial Officer Jonas Biery provided an update on the City’s projected budget gap and a high-level preview of concepts under development to reduce spending.
According to the memo, the budget gap for the financial year that starts July 1 will be significantly larger than the $27 million identified in a recent General Fund Forecast – a likelihood that City leaders have been projecting for months.
To maintain current service levels, the City would need another $40 million to replace expiring one-time resources that have been used to fund programs such as homeless shelters and neighborhood clean-up efforts.
The gap will continue to grow as the city resources staffing and budgets for elected officials’ offices and works to settle active labor negotiations, accommodate rising health care costs and address Portland’s homelessness crisis, which could collectively cost $70 million or more.
All told, the city may need to reduce spending by more than $100 million to cover the gap during the next budget year.
“We inherited an unprecedented and painful budget crisis,” said Mayor Keith Wilson and Council President Elana Pirtle-Guiney in a joint statement. “We are steadfast in our commitment to exploring every option, thinking creatively, and working together as a team to make sure we keep city services moving. It is critical that we approach these decisions with a spirit of collaboration and transparency to ensure our actions are in the best interest of all Portland residents."
Over the past few months, City leaders have been developing concepts to cut costs. The memo provides a high-level preview of potential recommendations that will be released by the end of February for council and community feedback.
Broken down by service area, the memo outlines options in general buckets – from cutting parks programming and hours, to eliminating community safety programs, to reducing the hours for 311.
So far, proposed budget cuts are estimated to eliminate more than 120 staff positions, some of which are vacant. However, existing concepts cover only the initial $27 million gap. With roughly two-thirds of the City’s budget going to personnel, more significant layoffs will need to be considered to offset the growing budget gap, according to the memo.
As the City’s budget process progresses, community input will be invited. Learn more about these opportunities at https://www.portland.gov/budget/join.