
City officials in Portland are gearing up to tackle a substantial budget deficit for the upcoming fiscal year, which starts on July 1. The projected shortfall is anticipated to exceed $100 million, a significant increase from the previously estimated $27 million outlined in a recent General Fund forecast, as detailed in a memo sent to the city council on Friday.
The budget gap arises from various factors, including the expiration of $40 million in one-time funding that has been essential for programs like homeless shelters and neighborhood cleanup initiatives, according to City Administrator Michael Jordan and Chief Financial Officer Jonas Biery. While initial plans had shielded police and fire services from budget cuts, revised guidance now calls for potential reductions of 5–8% from these departments. An 8% cut could mean a loss of $20.5 million in police funding.
In addition to the anticipated shortfall, Portland is grappling with escalating healthcare costs, ongoing labor negotiations, staffing requirements for elected officials’ offices, and the pressing need to address homelessness. These factors could exacerbate the budget gap by an additional $70 million or more.
To overcome this financial challenge, the city must identify substantial cuts, with about two-thirds of Portland’s budget allocated to personnel expenses. Consequently, layoffs are likely to be a crucial component in balancing the budget. The memo outlines initial proposals for cost reductions, with more details expected in February.
Portland Parks & Recreation is projected to face a $23 million budget cut, which could lead to reductions in summer camps, aquatics programs, and community center operating hours. Maintenance services, including park cleanliness and restroom access, may also be affected. These changes would reduce service availability citywide, particularly during high-demand periods.
Additionally, a $5 million cut to housing and economic development programs is under consideration. Programs at risk include low-income housing assistance, first-time homebuyer down payment support, and eviction legal aid, which could disproportionately impact vulnerable populations facing housing instability. While these budget cut figures are still proposals, no final decisions have been made regarding which services, if any, will be reduced. Fire services may also face a potential $12.6 million cut.