PBOT budget overview

How is PBOT funded?

The Portland Bureau of Transportation (PBOT) manages about $21 billion in assets, with an annual budget of approximately $586 million, roughly 9% of the City of Portland’s budget. About 75% of PBOT’s funding comes from restricted sources. These are funds that must be dedicated to specific programs and services such as federal grants for specific projects, permit revenues, and Transportation System Development Charges (TSDCs) that cannot be used for other purposes. This also includes revenue from Fixing Our Streets (the voter-approved 10-cent gas tax) which is dedicated to specific projects and programs.

Less than 2% of PBOT’s resources come directly from taxes paid into the city’s General Fund.

PBOT's budget, explained

Discretionary resources (or General Transportation Revenue) go towards basic maintenance and operations of the transportation system and are only 25% of the bureau’s budget. PBOT has $149 million in discretionary resources, but some of that is allocated to debt payments (such as paying off Portland's portion of the Sellwood Bridge and the Portland-Milwaukie Light Rail line) and other required commitments. 

Our truly discretionary revenue is about $100 million.

General Transportation Revenues (GTR) come from two primary sources: 

• The State Highway Fund which is made up of fuel taxes, DMV fees, and weight mile fees
• Parking revenues which come from on-street meters, permits and citations.

Both of these primary funding sources, however, have baked-in structural issues and limitations:

• Fuel taxes are decreasing over time as cars become more fuel efficient—This is a positive for helping to achieve our carbon reduction goals, but it contributes to our revenue challenges.  
• The State Highway Fund is also controlled by the state legislature, so cities don’t have the ability to influence how much money goes into it or how much money comes out of it to cities.
• Parking rates are set to advance parking management goals, not tied to revenue needs and not indexed to inflation.
• There’s a basic problem with depending on parking revenue – the more successful we are in achieving our multimodal mode shift goals and getting people to drive and park less, the less revenue comes into the bureau.

These challenges have been clear, and growing slowly over time, for quite a while. They are not simple to solve, and Portland is not alone in dealing with them – cities, counties, states and the federal government are all grappling with these issues.

Challenges have become acute

The Covid-19 pandemic exacerbated these underlying revenue challenges and they now present a very urgent problem.  

The pandemic has led to changes in travel behavior that have caused a major decrease in parking revenues. Parking revenues remain significantly below pre-pandemic levels. Additionally, we have seen reductions in Portland vehicle registrations which means unexpected reductions in our share of the State Highway Fund.

Inflation is also part of the challenge. Construction costs have increased more dramatically than others – road construction costs have increased nationally more than 50% since the end of 2020. (The biggest factor in this is materials cost.)

What was previously a growing concern is now a full-on crisis.

Significant budget cuts over the last four years already impact all of PBOT’s work

Between FY 2020-2025 PBOT has cut approximately $42.1 million of General Transportation Revenues-backed expenses.

PBOT has also drawn down all of the $63 million that had been held in reserves

Budget cuts across the board significantly impact assets, safety, equity, and sustainability, and make it harder to deliver on community expectations

The impact of these losses continues to be felt across Portland, slowing down service and reducing the bureau’s ability to invest in safety and maintenance work across the city.

Less General Transportation Revenues (GTR) means less funding for PBOT’s Maintenance Operations, reducing the bureau’s ability to maintain city streets, bridges, and other transportation assets. Less maintenance means these assets will continue to fall into disrepair and will add to Portland’s ever-growing transportation maintenance backlog – the highest in the city – of approximately $6 billion. 

Unless city leaders find a solution, the public will likely see dramatic and visible reductions to transportation service.