Today I released my Proposed Budget for FY 2020-21.
Uncertainty around the financial impacts of the COVID-19 crisis remains high.
The City Budget Office initially forecasted a $75 million reduction in the City’s General Fund revenue for FY 2020-21.
But there’s hopeful news.
We found a way to reduce that gap by nearly 90% by identifying millions in savings from City reserves, set-asides, pulling back on underspending, and pushing pause on a few programs.
This is the result of making difficult but strong financial choices and saving money over the last few years. This is the result of sound fiscal judgement of City Council as a whole.
Because we were prepared, because we spent wisely and saved carefully – despite a radical new COVID-19 reality none of us expected – we were able to protect core city services and uphold our values in my Proposed Budget. We will not have to face the financial free fall that some cities across the country and the world are facing.
Crisis reveals the true character of a city, and what we have discovered during this budget process, is a City budget that will be able to largely withstand the economic blow of this crisis.
My team and I turned over every stone looking for opportunities to close the financial gap without impacting core services to the community and sacrificing our equity and climate action-based values.
Through this budget and additional community resources flowing into help with our COVID-19 response, I am focused on supporting frontline communities who have been hit first, and worst. They are disproportionately people of color. They are struggling families, our houseless neighbors, vulnerable tenants and small business owners. These Portlanders are my top priority in our response and recovery.
Highlights of Proposed Budget
- Invests in organizations and programs to serve undocumented Portlanders.
- Supports work invested in responding to and preventing hate crimes.
- Protects VOZ, the Gateway Center for Domestic Violence, and the Office of Youth Violence Prevention from any cuts.
- Provides resources for important work to get more of Portland’s construction dollars to women- and minority-owned businesses, and to train a diverse workforce.
- Funding for Portland’s Age-Friendly Initiative.
- Allocates new Cannabis Fund resources to support local small businesses, prioritizing minority-owned enterprises.
- Adds a position to work on the City’s GreenFleet transition, ensuring continued progress on this top climate action.
- Funds our contribution to the regional partnership to build a cleaner and greener construction industry.
- Funds new parks and new park amenities that are coming on-line this year across the community, especially in East Portland.
- Funds Portland Parks & Recreation’s work to move toward a financially sustainable future.
- These investments are in addition to protecting and supporting our core city services: public safety, livability, utilities, roads, etc.
Along with providing a platform for fiscal stability, my proposed budget elevates equity and inclusion, supports frontline communities hit hardest by the COVID-19 crisis and protects vulnerable communities by:
- Prioritizing homeless services: provides $6.2 million to continue current funding levels for the Joint Office of Homeless Services and holds them harmless from further cuts in the Fall.
- Providing critical rent assistance: provides $8.4 million of reallocated existing and newly allocated federal grant resources to provide 3-6 months of rent support to 2,100 families.
- Including $455,000 to assist vulnerable individuals and families who may not be eligible for CARES stimulus and unemployment benefits.
- Directing the Bureau of Planning and Sustainability to prioritize and continue critical work to mitigate displacement within their existing resources.
- Including $75,000 in interagency resources to support and enhance tribal liaison work in the Office of Government Relations.
- Reallocating resources within the Bureau of Transportation to fund additional streetlights along 12 miles of poorly lit areas of the High Crash Network.
- Providing $1.6 million to continue critical work making our street corners ADA accessible across the City.
- Directing bureaus to consider how to narrow service level gaps and improve the living conditions for underserved communities first and foremost when putting forward their budgets in the Fall.
To close the large financial gap, however, we had to make some tough decisions. We instituted wage freezes and furlough requirements.
We drew down our contingency fund as well as a variety of reserves and set-asides – money that the City had been responsibly and appropriately saving for critical uses, but money that we can’t afford to leave sitting idle while we’re in a crisis.
We shifted unspent funds from the current fiscal year, that otherwise would’ve been rolled over into next year.
I’ve also called for a 5.6% reduction in General Fund discretionary resources across City bureaus. Different bureaus are burdened by these cuts differently.
To ensure fairness across bureaus I am individually “crediting” bureaus’ budgets for these reductions towards their 5.6% target reduction. Together, these efforts achieve another $19.6 million in savings.
Among the cuts that each Bureau needs to take to meet that target reduction, this budget relies on personnel compensation cuts. In order to avoid additional layoffs, I have asked our labor partners to share the sacrifices that others are already taking.
If we are unable to reach an agreement, Bureaus will be faced with addressing a nearly $9 million General Fund gap with layoffs.
However, I’m confident and hopeful we’ll be able to come to an agreement with our labor partners soon. Those conversations have been promising.
Budget Timeline and Process
The community is invited to take part in a public hearing on Tuesday, May 12, 2020 when City Council will serve as the budget committee to hear public testimony on my proposed budget. The application deadline to testify is Friday, May 8, at 4 p.m. More information on the hearing and public comment sign-up process can be found here.
- City Council action to approve City of Portland Budget – Wednesday, May 20, 2020 (time TBD)
- City Council action to adopt City of Portland Budget – Wednesday, June 10, 2020 (time TBD)
More information and updates on timelines for the budget process can be found here.
Because tax payment deadlines have been delayed, and because the COVID-19 crisis emerged late in the current fiscal year, we won’t have a clear picture of its full financial impact until later this year.
Altogether, my Proposed Budget closes nearly 90% of the expected $75 million gap. We will address the remaining this fall in our annual Fall Budget Monitoring Process (BMP).
The City has regular mid-year budget checkpoints to make corrections based on new information. This is beneficial because when we know the actual size of the revenue reduction in the fall, we will close the rest of the gap in a more thoughtful, accurate, and measured way than is possible right now.
My guidance for the reduction proposals for the fall BMP directs bureaus to protect programs and services:
- With measurable outcomes, and that are performing well.
- That close the gap for underserved communities who have historically received fewer City services.
- That advance our climate, housing stability, community development, and safety goals.
Building a Resilient Portland
The COVID-19 crisis is forcing hard choices, and when we make hard choices, we reveal what matters most. Our world will be permanently changed by this crisis, but I firmly believe in the strength and resilience of our community.
In our response, we have both a responsibility and an opportunity to reimagine our practices and our systems, setting a new foundation that puts fiscal resiliency, equity, the needs of our vulnerable populations and climate action at the front and center of every budget decision we make.
I believe in the strength and resilience of this community. I believe in our City Council. I believe in our public servants who protect and serve frontline communities hit hardest by the COVID-19 pandemic.
I believe that if we are thoughtful and strategic in our decisions about this budget, we will reshape our City to better serve Portlanders.
This was an inequitable society before COVID-19.
And COVID-19 is exacerbating those inequities.
It’s not going to be easy, but we are going to fight with everything we’ve got to make sure those inequities don’t continue.
We are going to get through this.
And we are going to come out stronger.
And we are already showing that we, as a city government, can be cost effective and visionary.
This is our chance to create a more inclusive, equitable, and resilient Portland, working together as one City.